Senate Banking Committee Sends Letter to Yellen on Collection, Use of Consumer Data

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On June 7, Sen. Sherrod Brown (D-OH), Chair of the Senate Committee on Banking, Housing, and Urban Affairs, sent a letter to Treasury Secretary Janet Yellen to request a review by the Financial Stability Oversight Council of financial institutions’ consumer data activities and their potential threat to U.S. financial stability and security. The letter raised concerns that this information may be sold to third-party purchasers or data brokers who compile it with personal data collected from other sources often associated with advertising and exploited for other uses. The Committee also raised concerns that such data could be used for nefarious purposes including “glean[ing] consumers’ tolerance for price hikes, or using certain people’s spending patterns to target them for blackmail or ransomware.” 

Putting it Into Practice: Consumer data activities will surely be a large focus of Wall Street oversight hearings slated for September where a number of large and regional banks will testify before the Committee. As Capitol Hill spotlights these issues, companies should use this as a reminder to conduct data inventories to assess whether they collect or disclose data sets that are subject to any federal and state regulations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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