Copyright Everett Herald
By Nansen Malin / For The Herald When I opened my floral design business several years ago, I never imagined how much technology would shape the way I do business. Like many small business owners, I’ve learned that keeping up with change is essential to staying connected with customers. From managing online orders to accepting payments through apps like Square, Venmo and CashApp, technology has made it easier for people to shop locally and for my business to keep growing. The invisible infrastructure that powers these apps is the open banking framework. The framework lets financial services apps connect directly to bank accounts to move money and access financial information using go-betweens called data brokers. While they help connect apps to bank accounts, these brokers often take more than they should because they’re currently allowed to operate without any regulation, putting people’s security at risk. It was welcome news to hear that the Consumer Financial Protection Bureau started working on a rule to rein in data brokers in 2024, but that rule has been challenged in court. After pressure from the crypto industry, the Trump administration decided to move forward with its own rulemaking process, so now is the time to come together to support a rule that protects consumers and small businesses. The real issue here is control. Right now, the current lack of regulation allows data brokers to have control of data, instead of consumers. That’s unacceptable. When I connect my business account to a payment app, I’m authorizing the data broker to access my data, but what they’re actually doing goes far beyond what I agreed to. Many of them have built business models that revolve around exploiting this consent and using people’s data for their own financial gain. The data brokers are so unscrupulous that a large bank recently reported billions of data requests in just one month this year and only a small percentage of those requests were initiated by consumers. This means that while I’m assembling flower bouquets or while customers are browsing my shop for flowers, data brokers can access our financial data and sell it without us ever finding out. That’s not what we sign up for when we use an open banking system. As if that wasn’t bad enough, the data brokers’ behavior creates an environment that is ripe for fraud. Transactions routed through data brokers already have a 69 percent higher chance of fraud. On top of that, the brokers engage in practices taht include “screen scraping,” which allows them to collect sensitive information like passwords from a user’s computer screen. The CFPB’s open banking rule can fix this by putting real limits in place. We need a rule that gives consumers control over their financial data. With this rule, the CFPB has an opportunity to protect people’s most sensitive data by banning the practice of screen scraping. The CFPB should also ban data brokers from selling the data they are entrusted with. Just as importantly, the CFPB has a chance to establish strong security standards that data brokers must follow. Open banking can only make our lives easier if it’s safe for all to use. That’s why I’m urging Washington’s federal lawmakers to push the CFPB for the implementation of a strong open banking rule that reins in data brokers and gives control back to people. Nansen Malin is a parent, grandparent and school board member who splits her time between Mukilteo and southwest Washington. She advises business, families and influencers on the use of social media, payment apps and issues around safety for minors. Contact herr @nansen on X.com.
