Recent Report Proposes Consumer Financial Data Bill of Rights
As the scope and power of data have increased, recent legislative efforts to improve consumer financial data privacy and security at the state level have sparked a national discussion about what more can be done to ensure consumers are protected.
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An overwhelming 97% of consumers saying they are somewhat or very concerned about their data privacy, according to Gary Sterling. Two researchers at the Harvard Kennedy School of Government’s Mossavar-Rahmani Center are proposing broad recommendations on this topic, including establishing federal legislation to standardize and increase consumer protections for financial data privacy and security.
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In the new report, Harvard researchers Marshall Lux, research fellow at the Center, and Matthew Shackelford, research assistant, lay out the optimal regulatory policy framework to establish the Comprehensive Consumer Financial Data Act (CCFDA) that includes the following:
- Creating the Consumer Financial Data Bill of Rights;
- Harmonizing regulations across state and federal jurisdictions;
- Recognizing the treatment of data as the property of consumers; and
- Designating the government as the party responsible for protecting those rights.
What’s more, the report suggests ways to simplify the existing regulations to reduce business frictions and foster innovation for privacy and security-focused technologies and financial products.
“Consumer financial data privacy and security are essential for the protection of consumers and the continued functioning of the US financial system. The optimal solution is to pursue comprehensive federal legislation that incorporates prior federal rules on financial data and significantly simplifies the regulatory approach for financial data protection,” said Marshall Lux, research fellow, Harvard Kennedy School of Government’s Mossavar-Rahmani Center. “We strongly recommend that the US Congress undertake the process necessary to realize the vision of the CCFDA for the betterment of American consumers, businesses and society over the long-term.”
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