The Credit Union National Administration (CUNA) is urging the Consumer Financial Protection Bureau (CFPB) to exclude financial institutions from its definition of “data broker.”
The recommendation comes in response to a request for information recently issued by the CFPB on data brokers. In its comments, CUNA said that the inherent sensitivity of consumer financial data highlights the need to ensure it is handled appropriately and securely.
“Credit unions utilize consumer information and third-party relationships to confirm applicants and account holders to prevent synthetic identity fraud,” CUNA’s comment letter reads. “Information gained from third-party relationships is critical for credit unions preventing money laundering, the financing of terrorism, and carrying out bank secrecy act compliance including customer identification and beneficial ownership requirements.”
Specifically, CUNA said that the CFPB should explicitly exclude financial institutions from the definition of data brokers, as the use of this definition in the future would cause significant harm and confusion. The bureau should also clearly differentiate participation in a data sharing regime under Dodd-Frank’s section 1033 from qualification as a data broker under any future rulemaking. Finally, CUNA said CFPB should ensure a data broker rulemaking does not interfere with financial institutions’ core operations and member service.
“Our members’ ability to utilize consumer information to carry out these functions is essential and required by law,” the letter stated. “As the Bureau considers any potential rulemaking following this RFI, it must recognize the stringent regulation, supervision, and examination that governs financial institutions’ critical use of consumer data to execute core operations and member services.”