Financial inclusion

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FDATA North America Responds to Banking Trade Associations’ Petition Urging CFPB Supervision of Data Recipients

Contact: Kerrie Rushton, (202) 365-6338, [email protected] 

August 2, 2022, Washington, DC -In response to the recent petition from several banking trade associations urging the Consumer Financial Protection Bureau to supervise both data aggregators and data recipients, FDATA is releasing the following statement:

“FDATA and its members have long advocated for the CFPB to supervise data aggregators as part of its 1033 rulemaking. The joint trades petition, however, calls for the Bureau to supervise aggregators and data recipients. This would require the Bureau to supervise thousands of additional entities — including scores of community banks and credit unions that are today acting as data recipients but are currently exempt from CFPB supervision.

FDATA continues to believe that the most appropriate path for the Bureau to oversee the consumer-permissioned data spec is to supervise aggregators and to promulgate third-party guidance laying out the CFPB’s expectations for the aggregators’ clients: the data recipients.”

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FDATA North America Submits Comments to Canada’s OSFI on Draft Guideline B-10: Third Party Risk Management

Contact: Kerrie Rushton, (202) 365-6338, [email protected] 

June 29, 2022, Washington, DC -The Financial Data and Technology Association of North America today submitted comments in response to Canada’s Office of the Superintendent of Financial Institutions’ (OSFI) public consultation on Draft Guideline B-10: Third Party Risk Management.

The comment letter focused on the interplay between this draft consultation and the concurrent development of Canada’s open banking framework, particularly the importance of clearly distinguishing third-party providers from open banking providers that will be accredited under the new OB system. 

The letter also stressed that since it is OSFI’s mandate to keep FRFIs and, by extension, Canada’s financial system, safe, sound, and secure, it is critical to distinguish third-party providers who directly work with Federally Regulated Financial Institutions (FRFIs), from providers serving consumers whose only relationship with a FRFI is accessing data about that consumer to provide the customer with the benefit of their product or service. For example, an FRFI may have a relationship with the data aggregator who is performing the function of data portability on behalf of that customer, but it most likely does not have a relationship with that budgeting application, and therefore could not reasonably oversee or be responsible for its operations. 

The letter also expressed appreciation for OSFI’s clarification provided by a footnote at the end of the consultation, which recognizes that this draft guideline is not intended to impede the establishment of open banking, but stressed that this footnote alone does not satisfactorily address the need to ensure coordination of accreditation for open banking providers. We therefore suggested to OSFI that the most appropriate amendment to address this critically important issue would be to make unambiguously clear that accredited open banking providers under Canada’s open banking system are exempt from OSFI’s third-party risk management framework.

We also urged OSFI to create a specific carveout from B-10 for all accredited open banking providers under Canada’s open banking framework as part of this consultation, and before the new open banking system is implemented. 

A copy of the letter is available here: FDATA NA Submission to OSFI on Draft Guidance B.10

ABOUT FDATA NORTH AMERICA
FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances.

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGO, Codat, Direct ID, Envestnet Yodlee, EQ Bank, Experian, finansystech, Fiserv, Flinks, Hank Payments, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, RocketMortgage, SaltEdge, Trustly, ValidiFI, Vaultree, VoPay, Wealthica, Xero, and others.

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FDATA North America Responds to CFPB Request for Information (RFI) on ‘Junk Fees’

Contact: Kerrie Rushton, (202) 365-6338, [email protected] 

April 8, 2022, Washington, DC – The Financial Data and Technology Association (FDATA) of North America submitted a comment letter today to the Consumer Financial Protection Bureau (CFPB) in response to its Request for Information (“RFI”) regarding fees assessed by financial services companies. FDATA used this opportunity to once again urge the CFPB to finalize a regulation under Section 1033 of the Dodd-Frank Act, an action which would create a long-overdue consumer data right in the United States. 

The letter states that FDATA believes the most practical remedy to reducing predatory fees in the financial ecosystem is to implement an open finance regime in the United States, stressing that “the center of such a framework must be an unambiguous and legally binding customer financial data right, which would ensure that consumers and small businesses could easily shop for financial services and products among scores of potential providers in an open, transparent marketplace.”

The lack of a customer financial data right in the United States reduces competition in data-driven financial services, artificially stifles consumer choice and creates an environment in which fees charged to end users may stay stagnant – or even increase – over time. To tackle these thorny challenges, FDATA North America once again encouraged the CFPB to utilize the authority vested in it under Section 1033 of the Dodd-Frank Act to promulgate, by rule, a customer financial data right that will “spur greater financial services innovation and competition, lower fees, and improve financial access and inclusion.” 

To further demonstrate how a consumer data right could help address the issues raised in the RFI, the letter makes note of CFPB Director Rohit Chopra’s remarks during a press call regarding overdraft fees in December of last year, where he astutely noted that “If America can shift to an open banking infrastructure, it will be harder for banks to trap customers into an account for the purpose of fee harvesting.” 

The letter also shared information on the successful implementation of open finance regimes in other countries which demonstrate the wide-ranging economic and consumer benefits that can be delivered by a final 1033 rule. A copy of the letter is here: FDATA CFPB Junk Fee RFI Letter April 2022

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances.

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGO, Codat, Direct ID, Envestnet Yodlee, EQ Bank, Experian, finansystech, Fiserv, Flinks, Hank Payments, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, RocketMortgage, SaltEdge, Trustly, ValidiFI, Vaultree, VoPay, Wealthica, Xero, and others.

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FDATA NA and Paytechs of Canada Release Landmark Survey on Canadian Consumer and Small Business Attitudes Toward Financial Sector and Open Banking

Contact: Steve Boms ([email protected]); Alex Vronces ([email protected])

April 4, 2022, Toronto and Washington, DC: More than half of Canadians feel stress when interacting with Canada’s financial services sector and believe they would benefit from increased competition and transparency in the financial services market, according to a landmark survey commissioned by FDATA North America and Paytechs of Canada. The findings indicate this is especially true among women, young people, and new Canadians. Among the biggest sources of dissatisfaction are high fees and a lack of choice.

The findings are derived from two surveys conducted by Pollara Strategic Insights. One was of a randomly-selected sample of 2,001 Canadians 18 years of age or older. The other was of a randomly-selected sample of 600 Canadian small business owners. In each, respondents were asked about their experiences with Canada’s financial services sector. 

“As the government advances critically important initiatives to modernize Canada’s financial services market, including open banking and payment modernization, the voices of consumers and small businesses must be at the center of the conversation,” said Steve Boms, Executive Director of FDATA North America. “These first-of-their-kind surveys clearly demonstrate Canadians’ hunger for a more competitive, transparent, and innovative Canadian financial system.” 

“At a macro level, we’ve long known that the Canadian financial services sector isn’t as productive as it could be because of barriers to competition and innovation, which is part of the reason why the government is modernizing its approach to financial sector policy,” said Alex Vronces, executive director of Paytechs of Canada. “These surveys shine a light on the often-neglected human cost of less competition and innovation for consumers and businesses.”

“The survey findings show that navigating the financial services sector is a stressful experience for about half of Canadians and small business owners.” said Dan Arnold, Chief Strategy Officer at Pollara. “So it is not surprising that both audiences see the potential benefits that reforms to the sector could bring.”

Key Findings:

  • About half of Canadians (52%) and small business owners (51%) feel stress when interacting with the financial services sector. Those who operate larger small businesses (10+ employees) are significantly more stressed (72%). Moreover, the majority (54%) of these larger small business owners feel the amount of time they spend dealing with the financial services sector is getting in the way of them actually running and growing their business, twice the overall level among small business owners (26%). Immigrant small business owners are more likely to be stressed by their interactions with the sector.
  • Over two-thirds of Canadians believe more competition in the financial services sector would lead to a greater choice in products (70%) and lower financial services fees (67%). Moreover, small business owners are over four times more likely to agree than disagree with the sentiment that Canadian small businesses would benefit from increased competition in the financial services sector (64% vs. 14%).
  • Among specific changes tested, Canadians are most likely to feel they would personally benefit from easier ways to “shop around” to get the best possible rate (75% would benefit), easier ways to transfer money quickly and securely (73%), and tools that help make personalized investment decisions (69%). 
  • Among specific changes tested, small business owners are most likely to feel they would benefit from easier ways to “shop around” to get the best possible rate (73% would benefit), better ways to transfer funds between different accounts (68%), and alternatives to credit cards with lower interchange fees for merchants (62%). 
  • There is widespread agreement among the users of Non-Bank FinTech Apps that they are easy to use (91%), have lower fees (82%), and help save money (73%).

To access the full survey data, click here.

For media enquiries or interviews, please contact:

Steven Boms

Executive Director, FDATA North America

[email protected]

Alex Vronces

Executive Director, Paytechs of Canada

[email protected]

About FDATA North America

FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based financial tools to better manage their finances.

About Paytechs of Canada

Paytechs of Canada is a not-for-profit association that provides a harmonized voice for technology companies that move money. Our mission is to make Canada’s financial sector more competitive and innovative, without compromising its safety and soundness. Serving millions of Canadians on a daily basis, our membership includes payment processors, financial technology companies, and financial institutions, among others.

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FDATA North America Applauds Choice for Canadian Open Banking Lead

Contact: Kerrie Rushton, (202) 365-6338, [email protected] 

March 22, 2022, Washington, DC – The Financial Data and Technology Association (FDATA) of North America today issued a statement following the announcement that Abraham Tachjian will serve as Canada’s Open Banking Lead. In its August 2021 report, the Minister of Finance’s Advisory Committee on Open Banking recommended the appointment of an Open Banking Lead who would report to the Associate Minister of Finance Canada as a critical first step in the delivery of open banking in Canada.

Executive Director Steve Boms said:

“Today represents an important step forward in Canada’s efforts to deliver open banking by 2023. We are encouraged by this action and look forward to working with Open Banking lead Tachjian to ensure a competitive, customer-centric open banking ecosystem in Canada that boosts financial access and inclusion.

“Consumers and small businesses also should be pleased with this forward momentum. Around the world, open banking regimes have led to greater financial access and competition, lower pricing, improved financial outcomes. Canadian consumers have increasingly moved toward digital financial services, particularly throughout the pandemic. Today’s announcement is a meaningful step towards the realization of an innovative, customer-centric financial services system in Canada.”

In a letter to Freeland sent in early November 2021, FDATA said the Open Banking Lead should be responsible for working with industry to create the policy and governance standards under which open finance can be delivered in early 2023 as set forth in the report.

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances.

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGo, Codat, Brian J. Costello, Direct ID, Envestnet Yodlee, EQ Bank, Experian, finansystech, Fiserv, Flinks, Hank Payments, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, RocketMortgage, SaltEdge, Trustly, ValidiFI, Vaultree, VoPay, Wealthica, Xero, and others.

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Member Spotlight: TransUnion

TransUnion has been on the cutting edge of consumer data technology for more than half a century and is one of the world’s leading global information and insights companies. TransUnion serves consumers in more than 30 countries on five continents. In the United States alone, more than 166 million people have received free access to their credit information through TransUnion or its partners.

Information for good is TransUnion’s mission and the company is focused on using data to enhance financial inclusion. Helping individuals who too often have been left behind by traditional systems, the company’s alternative data assets can help create a more complete picture of a consumer’s risk profile. To date through trended and alternative financial data, TransUnion has helped 35 million credit invisible or credit-disadvantaged people gain greater access to credit. If scaled, the company estimates that the inclusion of alternative financial data could help an additional 60 million people gain access to credit.

TransUnion has long been an advocate for the use of alternative financial data. The company’s President & CEO, Chris Cartwright remarked “If alternative data is widely captured on credit reports and used by lenders in credit underwriting, the benefits would cascade across generations and all corners of America.” Because of that “more families would be able to flourish in the financial ecosystem, constructing legacies of prosperity they can pass along to their children,” he added.

As financial institutions look for new ways to support financial inclusion, TransUnion remains committed to doing their part to create a better future and more fair society. They recognize this important work is just beginning and their goal will be met once equity and credit access is an integral part of an economy where no American is left behind.

For more information on TransUnion, please visit www.transunion.com

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FDATA North America Congratulates Chopra on Confirmation, Calls for Speedy Action on Open Finance Regulation

 

Contact: Kerrie Rushton, (202) 365-6338, [email protected] 

September 30, 2021, Washington, DC – The Financial Data and Technology Association (FDATA) of North America today issued a statement following the successful Senate confirmation for Rohit Chopra to be director of the Consumer Financial Protection Bureau:

“We congratulate Mr. Chopra on his confirmation and are eager to work with him and CFPB staff to advance an open finance regime in the United States. Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act authorizes the CFPB to establish by regulation a consumer financial services data right in the United States. The Obama administration recognized a customer’s inherent right to their financial data, and so did the Trump administration. President Biden’s recent competition executive order similarly called for the CFPB to quickly issue a regulation honoring Section 1033. Now that Chopra is confirmed, that work can — and must — move forward.

“With nations across the world moving toward open banking, U.S. policymakers must work quickly to implement a customer-centric, 21st century financial services marketplace that boosts competition, better protects consumers, and helps improve financial inclusion.”

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances.

Members include air (Alliance for Innovative Regulation), APImetrics, Basis Theory, Betterment, BillGo, Codat, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fiserv, Flinks, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Rocket Mortgage, SaltEdge, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

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FDATA North America: White House EO Will Help Individuals, Families and Small Businesses Recovering From Pandemic

Contact: Kerrie Rushton, (202) 365-6338, [email protected]

July 9, 2021, Washington, DC – The Financial Data and Technology Association (FDATA) of North America today issued a statement following the release of President Joe Biden’s Executive Order on financial competition. In the order, the president directs the Consumer Financial Protection Bureau (CFPB) to issue a regulation that would allow bank customers to have access to, and share, their own financial data. FDATA North America Executive Director Steve Boms said:

“Today’s Executive Order represents a significant step forward for consumers and small business towards an open finance regime in the United States. Coming out of a pandemic and recession, a CFPB rule will improve financial inclusion, enhance customers’ access to affordable credit, and help families and businesses improve their financial wellbeing.

This order also will help create a customer-centric, 21st century financial services marketplace that boosts competition. Major markets around the world have implemented or are designing open finance regimes. U.S. consumers must not be left behind and, today, the White House is one step closer to making sure that they are not. FDATA North America and its members are eager to work with the CFPB and the Biden administration to implement this incredibly important regulation.”

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances.

Members include: air (Alliance for Innovative Regulation), APImetrics, Betterment, BillGO, Codat, Direct ID, Envestnet Yodlee, EQ Bank, Experian, Fiserv, Flinks, Interac, Intuit, Inverite, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, SaltEdge, Trustly, ValidiFI, VoPay, Wealthica, Xero, and others.

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