MBA Comment Letter Asks Level Playing Field on Consumer Access to Financial Records

The Mortgage Bankers Association submitted a comment letter Thursday to the Consumer Financial Protection Bureau, asking that a Bureau proposal on consumer access to financial records provide a level playing field for all authorized data users and promotes consumer awareness in the ways that data are accessed and used.

The letter to Acting CFPB Director Dave Uejio also asks that the proposal supports industry efforts to establish Application Programming Interface-based access standards “that facilitate consumer-authorized data sharing in a manner that is technology-neutral, secure and otherwise consistent with the data access rights established by Section 1033 of the Dodd-Frank Act.”

The Advance Notice of Proposed Rulemaking, submitted last October, asked how the Bureau might most efficiently and effectively develop regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records. The ANPR seeks comments and information on costs and benefits of consumer data access; competitive incentives; standard-setting; access scope; consumer control and privacy; and data security and accuracy.

In MBA’s comments, MBA Senior Vice President of Residential Policy and Member Engagement Pete Mills said the Association shares the Bureau’s view on the importance of the authorized data access ecosystem to the consumer financial services market.

“While not perfect, the existing consumer authorized data access ecosystem, which has evolved without prescriptive regulations, is largely effective,” Mills wrote. “We believe this experience should guide the Bureau’s efforts to implement Section 1033.”

MBA urged the Bureau to support ongoing, stakeholder-led efforts to develop universal API-based data access standards, provided these standards ensure all authorized third parties have equal access to data.

MBA noted for the housing finance industry, technologies that allow businesses to rapidly access and assess consumer financial information have created substantial consumer benefits.

“From a process standpoint, streamlined access to consumer financial data allows for faster and more reliable verification of borrower income and assets for underwriting,” MBA said. “Greater automation of the underwriting process has improved the efficiency of the loan production process, reducing costs and making for a more convenient consumer experience.”

Along with process improvements, MBA noted the ability to aggregate consumer financial data provides insights that translate into more accurate risk pricing, which can reduce costs to consumers. “Further, this data facilitates the development of innovative algorithmic underwriting models that have the potential to use non-traditional data sources or newly discovered data relationships to increase access to credit for currently underserved borrowers,” the letter said. “By making consumer financial data exportable, these technologies allow existing financial service providers and innovative new business models to serve new markets, which benefits consumers by increasing competition.”

To maximize the potential to expand availability and affordability of mortgage credit, MBA encouraged the Bureau to implement Section 1033 in a way that:

• fosters competition by creating a level playing field for all authorized data users;

• promotes consumer awareness concerning the way data is accessed and used; and

• supports industry efforts to establish API-based access standards that facilitate consumer-authorized data sharing in a manner that is technology-neutral, secure and otherwise consistent with the data access rights established by Section 1033.

MBA also recommended the Bureau work with stakeholders, including relevant regulators, “to make clear how these provisions apply to consumer authorized data sharing transactions involving data aggregators.”

“These and other gaps in the data security and privacy framework have the potential to undermine consumer confidence in data sharing,” MBA said.