McHenry calls CFPB data privacy rule ‘a promising step forward’

House Financial Services Chair Patrick McHenry (R-N.C.) reacted favorably to the Consumer Financial Protection Bureau’s (CFPB) announcement finalizing its rule implementing Sec. 1033 of the Dodd-Frank Act.

The lawmaker compared the rule to previous legislative efforts aimed at protecting consumers’ personal information in a statement the same day as the rule’s release (Oct. 22).

“The CFPB’s final 1033 rule is a promising step forward to protect Americans’ financial data privacy,” McHenry said. “As Republicans have said for years, Americans should have greater control over their sensitive financial data. Consumers should know where their data is going, how it’s used, and be able to terminate collection of their data by certain firms. This rule is similar to Republicans’ Data Privacy Act.”

McHenry, who has been critical of CFPB Director Rohit Chopra on multiple occasions, praised the director for addressing concerns expressed by some legislators about certain restrictions on consumer data use.

“Director Chopra also listened to some of our concerns regarding unreasonable restrictions on the secondary use of consumer data,” McHenry said. “This is progress for American innovation and consumers, but we can’t stop here. Congress must build on the bipartisan consensus regarding financial data privacy.”

McHenry submitted a comment letter on the CFPB’s notice of proposed rulemaking on data privacy in December last year, stating he appreciated the rule’s intent to empower consumers to have more control over their personal financial data and account for advances in technology in a way that aligns with industry innovation.

“Technological advances in our financial system have produced products and services that benefit consumers in numerous ways. Many of these products and services are predicated on accessing consumer data. Yet our statutes, regulations, and guidance have not kept pace with technology. The Gramm Leach Bliley Act (GLBA) has not been updated substantively in more than 20 years and Sec. 1033 was enacted more than a decade ago. It is time that Congress and the executive branch act to ensure our data privacy and security laws empower and protect consumers consistent with innovation.”

He expressed concerns that there might be unintended consequences to consumers and the financial industry in general from the rule’s “unreasonable” restrictions on secondary use of consumer data.

He asserted the protections described in the rule should be made permanent by passing H.R. 1165, the Data Privacy Act, which McHenry introduced in February last year, proposing to modernize GLBA in ways that would “put Americans back in control of their sensitive financial data — without stifling innovation.”