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Financial Fintechs Reminded of Data Protection Duties, CFPB Warns

The bureau states nonbank fintechs must adhere to the requirements of the Gramm-Leach-Bliley Act.

Entrance to the Consumer Financial Protection Bureau, Washington, D.C. Entrance to the Consumer Financial Protection Bureau, Washington, D.C. (Source: Shutterstock)

The CFPB released a nine-page circular Thursday warning fintechs working in the financial space of their duties to maintain data security safeguards and standards as ordered by the Gramm-Leach-Bliley Act. If fintechs do not follow these standards, they may be in violation of the Consumer Financial Protection Act’s (CFPA) prohibition on unfair, deceptive or abusive acts and practices.

Thursday’s circular appeared to be another warning by the bureau to fintechs that despite their nonbank status and lack of financial regulatory oversight, fintechs will be monitored by the CFPB for unfair or abusive practices as it relates to shoddy cybersecurity policies.

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Michael Ogden

Michael Ogden

Editor-in-Chief for CU Times.

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