CDD, USPIRG, NCLC Urge Treasury Department to Consider Privacy Protections for Online Market Lending

“Among the most challenging issues confronting consumers and other borrowers are new threats to their privacy and the ability to control how data are collected and used by online financial services companies,” CDD and USPIRG said in joint comments. Online lenders and financial service companies can use an array of big data-driven digital applications to “tap into the explosive growth of online, social and internal data to make better customer decisions,” they said. Given the lack of privacy protections online for American consumers, with their data freely gathered across devices by data brokers and many others, and the increasing expenditure of the financial services industry to use this information for actionable purposes, a key challenge for the Treasury Department is to propose a national consumer and small-business framework to protect privacy for online lending and related credit and lending sectors, CDD and USPIRG said. In its comments, the National Consumer Law Center expressed concern about the use of data in ways that are “potentially inconsistent with the protections of the Fair Credit Reporting Act, privacy rights and fair lending laws.” NCLC said it shared the privacy concerns other groups raised about the impact targeted advertising has on Americans, especially since most don’t know their personal data is used to “shape the offers they receive and the prices they pay online,” and particularly since lead generators gather data about potential borrowers and sell it to the highest bidder. In the payday loan market, that data can sometimes include sensitive financial information such as Social Security numbers and bank account numbers, NCLC said.