CFPB Report Identifies Areas for Improvement in State Data Privacy Laws

Regulatory Developments

CFPB Report Identifies Areas for Improvement in State Data Privacy Laws
On November 12, the CFPB released a report that examines protections for consumers’ financial data under state privacy laws. All major state privacy laws passed to date exempt financial institutions, financial data, or both, if they are subject to the Gramm-Leach-Bliley Act or Fair Credit Reporting Act. This, according to the CFPB, may leave gaps in the protection of consumer financial data. The CFPB recommends that state policymakers assess where federal law currently has gaps or may be ineffective and consider removing or narrowing state law exemptions to ensure that consumer financial data is protected.

“Absent action to beef up federal privacy protections, states will need to take further action to guard against intrusive surveillance and improper monetization of our most sensitive personal financial data.”

— Rohit Chopra, CFPB Director

FDIC Launches New Tool to Boost Minority Banking Opportunities
On November 5, the FDIC announced the launch of the Minority Banking Opportunity Explorer, an online tool designed to help financial institutions, investors, and other groups identify neighborhoods that could benefit from banking services.

This new tool, which was introduced at the FDIC’s Minority Depository Institutions Subcommittee meeting on November 6, 2024, aims to promote the creation of new minority depository institutions (MDIs) and support the growth of existing ones by identifying potential business opportunities and new branch locations.

Federal Reserve Invites Comment on a Report for the Adoption of a Global ICS
On November 13, the Federal Reserve and Treasury Department released a joint report on the adoption of a global ICS. The ICS is a pending proposal by the International Association of Insurance Supervisors to implement a quantitative capital standard for large international insurance groups, developed in response to the 2008 global financial crisis. In their report, the agencies summarize the potential impact of the ICS on the US insurance market. The report notes that, while the ICS would be non-binding, it could create competitive disadvantages for insurers for whom a uniform standard does not adequately measure their capital. The report states that many state regulators are considering an alternative to the ICS based more on the relevant circumstances of a given state’s insurance market and more in line with the current approach by most states to insurance capital requirements.

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