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CFPB Expected To Query Tech Giants Over Financial Data Handling

Big tech companies in the U.S. are expected to receive a request for information packet from Rohit Chopra, the new director of the Consumer Financial Protection Bureau, Reuters reported on Thursday (Oct. 21), citing two sources with insider information.

Facebook, Amazon and Alphabet’s Google will each receive a 55-page questionnaire about how information on consumers is collected, used, and stored, the sources said. Other tech companies are also expected to get query packets, including PayPal and Square.

See also: Senate Narrowly Confirms Rohit Chopra as Consumer Watchdog Boss

The information request is part of a wider scope intended to protect consumers and their data as well as ensure adequate competition in the consumer financial services space. It also comes just weeks after Chopra was named the new director of the watchdog agency.

“The regulator’s questions will pay special attention to what it is firms are collecting, how they’re collecting it and what they’re using it for,” one of the sources told Reuters.

Chopra, a former Democratic commissioner at the Federal Trade Commission, was confirmed by the Senate last month and has a reputation for being tough on tech companies. He also was instrumental in the creation of the CFPB a decade ago with Sen. Elizabeth Warren.

Read more: Biden’s Banking Order Backs Data Accessibility, but the Portability Debate Remains Unsettled

The CFPB was launched to oversee financial firms, protect consumers and squash problems before they become major issues — like the 2008 mortgage crisis.

President Joe Biden in July suggested that the CFPB issue Dodd-Frank Act regulations, which would enable consumers to more easily share and transfer their banking information with other financial institutions or third-party FinTechs.

The CFPB started developing new mandates last year that would encompass consumer privacy and liability concerning data breaches. The new rules would also outline how much data can be collected and shared in open banking.

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Last month the U.S. House Committee on Financial Services FinTech Task Force convened with testimony by experts in the sector. Finicity CEO Steven Smith testified, and maintained that open banking has been a game-changer as far as data collection and privacy.

Open banking puts consent into the hands of consumers, thereby giving them the power to decide where their data is shared and what details will be available.

Data privacy is about consent, Smith said, and as long as people can provide “clear and explicit consent,” they will be in control of where their data is used and for what purpose.

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