What Do Data Rights Mean for EBT?
EBT accounts used for public benefits serve the same purpose as checking and debit accounts. But for 41M+ American households, thin margins put a premium on budgeting and planning.
Here's what's at stake for SNAP households and other government benefits recipients in the Consumer Financial Protection Bureau's forthcoming Personal Financial Data Rights Rule.
DECEMBER 6, 2023
With its proposed rule on Personal Financial Data Rights, the Consumer Financial Protection Bureau (CFPB) is putting consumers in charge. Once in effect, the rule guarantees consumers legal rights to access their data. They will enjoy new, strong protections for data security, with the ability to revoke data access and require data deletion on demand. However, the draft rule excludes Electronic Benefits Transfer (EBT) accounts used for government benefits like SNAP and TANF. Without these rights, over 41 million of the most economically disadvantaged consumers will have to wait for future rulemaking to ensure control over and reliable access to their data.
If enacted, this rule – thirteen years in the making – allows consumers to electronically access their covered account balances and transaction histories anytime. They will have the freedom to transfer their financial data from banks to fintech companies and other third-party service providers. Third-party providers will be banned from selling consumer data or using it to market other products. And, third parties will face a one-year time limit on consumer-permissioned data access, after which consumers must grant an extension.
Account data, including balances and transaction history, form the foundation of household financial management. Enabling consumers to control where they see this data empowers them to more easily budget and plan. The CFPB’s rule will tear down artificial barriers separating this information across various types of accounts like checking, savings, credit cards, and digital wallets. Doing so will give consumers holistic views of their spending, saving, and debt – while adding critical new protections to keep their data secure and protected from misuse and abuse.
For low-income households, EBT accounts used for public benefits serve the same purpose as checking and debit accounts. They’re the mechanism through which households perform daily transactions, like grocery shopping. Similar to many low-dollar bank and debit card accounts, EBT accounts are typically spent down to $0 each month. These households’ thin margins put a premium on budgeting and planning and make it essential to know their balance to the penny and to the minute.
In CFPB director Rohit Chopra’s words, the proposed rule gives consumers “the power to walk away from bad service and choose the financial institutions that offer the best products and prices.” But the current proposal says: “The CFPB is considering whether to add EBT-related data to the final rule, or whether to reach EBT cards in a subsequent rulemaking.” If EBT accounts are not included in the forthcoming rule, government benefits recipients will lack the power granted to other consumers. Moreover, lacking guaranteed access to more detailed historical data — critical for identifying out-of-state or unrecognized transactions — places them at greater risk of undetected benefits theft.
“Being able to regularly check my EBT balance…has helped me plan for my list of groceries I can get from the store…I was able to tell my card was fraudulently used when I checked my daily balance…” — Sara, California
Consumers like Sara need the improved data access and consumer protections the CFPB is offering. The CFPB should not wait for some future rulemaking (that may never arrive) to give equal treatment to vulnerable consumers. The time to provide these critical rights and protections is now.
With less than a month to go in the public comment period, join us in advocating for the inclusion of EBT accounts in the final Personal Financial Data Rights rule. The CFPB is collecting public input until December 29. To read more on the issue, check out the first and second installments of our blog series. To share questions, feedback, or to find out how you can help, reach out to Propel’s policy director, Justin King (email@example.com).