CUNA, NAFCU to CFPB: Stop the Rulemaking ‘Rush’

Officials with NAFCU and CUNA filed a letter with the CFPB Friday asking the Bureau to lengthen the notice of proposed rulemaking (NPRM) comment period for its personal financial data rights rule from 60 to at least 90 days. The two organizations said the shorter timeline puts smaller institutions at a disadvantage and the 60-day period appears to not follow any logic as laid out in previous rulemaking.

The proposed rule, which was announced on Oct. 19 by the CFPB, would implement a section of the Dodd-Frank Act requiring financial institutions to share certain specific consumer financial data with third parties if the consumer asks for it.

The rule would apply to credit unions, banks, card issuers and other “payment facilitation providers” to hand over the financial data of consumers or members to a third party. CFPB Director Rohit Chopra said he believes the proposed rule would “give consumers the power to walk away from bad service and choose the financial institutions that offer the best products and prices.”

In Friday’s letter filed with the CFPB, CUNA and NAFCU said, “CFPB has provided at least 90 days for notice and comment at previous points in their 1033 rulemaking process. Pursuing a notice and comment period that is less than 90 days creates a concerning divergence from CFPB’s established practices on the 1033 rulemaking. Further, the unique role of the NPRM within the agency rulemaking process necessitates due consideration to the time allotted to the public to provide comment on the agency’s formal plan to accomplish its goals on a specific regulatory topic beyond that provided during other points in the rulemaking process.”

The letter added, “Unlike other aspects of the rulemaking process, the NPRM is the primary opportunity for industry and members of the public to convey their views on the specific proposals put forth by the agency for full consideration by the agency in the finalization of the rulemaking.”

The letter pointed to the shorter 60-day timeline as a disadvantage to smaller organizations covered by the rule and said that the final rulemaking could adopt requirements that would ultimately disadvantage those organizations.

The letter stated, “Further, a rush to finalize this 1033 rulemaking, especially after the CFPB has pursued such a deliberate process up to this point, would invite scrutiny and potential future revisions, ultimately creating confusion for consumers and businesses, as well as additional compliance costs.”

“[T]he implementation of Dodd-Frank Sec. 1033 is far too important to financial institutions, fintechs, companies and consumers to rush this rulemaking process at this crucial juncture,” CUNA and NAFCU stated.