WASHINGTON — Rohit Chopra, director of the Consumer Financial Protection bureau, urged lawmakers to consider open banking legislation, including measures that would protect consumers' financial data.
Chopra, speaking in his second day of testimony in Congress at a hearing of the House Financial Services Committee Thursday, said that he's discussed the issue with lawmakers on both sides of the aisle.
"In my discussions with members on both sides of the aisle, there's clear interest in doing more to protect privacy," he said in opening remarks, separate from his prepared testimony that the House published.
Chopra also changed his prepared testimony to include a line about "tech giants" increasingly entering the financial services marketplace and "harvesting personal data."
The CFPB has been active on the issue of open banking and data privacy in the last month. Last week, the bureau
The proposal would require that consumers be made aware of where their data is held and how it is used, sparking a nuanced debate about whether consumers should be given the option to "opt in" or "opt out" of having their data used for secondary purposes.
The bureau is also
"Around the world, digital data brokers have proliferated," Chopra said. "Right now, data brokers compile dossiers on Americans that can be easily purchased by scammers and stalkers, as well as by state and non-state actors in countries of concern."
Chopra urged lawmakers to move forward with legislation that would codify some of these data protections into law.
"The CFPB is actively monitoring developments in the market, and we are eager to work with all of you to put into place stronger protections against abuse and misuse of data," Chopra said. "We also believe there are opportunities to advance legislation to accelerate open and decentralized banking in our country."
In his push for data privacy legislation, Chopra has found an unlikely ally in House Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C. McHenry's data privacy bill, introduced a year ago, shares many similarities with the data privacy measures in the CFPB 1033 proposal.
While McHenry in his opening statement at the hearing heavily criticized Chopra's handling of the CFPB, he took his time to ask Chopra substantive questions on what legislation the House could pass that would help data privacy efforts. Specifically, he asked Chopra how he would update Gramm-Leach-Bliley, a 1999 piece of legislation that requires financial institutions to explain their information privacy practices to consumers.
Chopra said that Congress should update the rule to include new restrictions on how customers give permission for their data to be used.
"I think we should accept that the notice that we get all the time is not really effective in having meaningful control," he said.
