Privacy protections for financial information in many states lags behind safeguards in other sectors of the economy, according a recent Consumer Financial Protection Bureau (CFPB) report.
The report examines federal and state-level privacy protections for consumers’ financial data and whether consumer financial data is sufficiently protected.
Between January 2018 and July 2024, 18 states passed laws giving consumers greater control over and access to their data, and reduced the collection of unneeded data. The laws included exemptions regarding federal regulations for financial data and financial products and services, meaning consumers do not have privacy rights to protect the information collected and/or shared by these exempted institutions.
States generally have authority to go beyond the federal rules.
“Consumers should have meaningful choice and an expectation of privacy about how their financial data is used, but large companies are increasingly harvesting and monetizing this sensitive data in mysterious ways,” CFPB Director Rohit Chopra said. “Given the exemptions in state law when it comes to this personal data, consumers lack fundamental protections for their financial privacy.”
States should ensure citizens are protected in instances where federal law currently has gaps or may be ineffective, the CFPB said.
The report also found existing protections for financial data have limits.