Federal regulators are moving to tighten rules governing how much money financial intermediators like banks and credit card companies make from their customers.
They are also moving to create new financial products, known as “disclosures” that are not covered by existing rules.
The Securities and Exchange Commission will require financial intermediers to file disclosures with the SEC, and the Consumer Financial Protection Bureau will begin a process of regulating the disclosure of consumer information.
The move comes after a series of events this year, including the death of a former chief of the SEC’s division overseeing financial services, and new revelations about the industry.
The regulator said it will require more disclosures and make the disclosures publicly available, though it won’t require them to be publicly available online.
The agency said the process could take two to three months, but that it would likely be completed in January or February.
The agency will require all financial intermediations to disclose the following types of information: Information that identifies an individual; the name and address of the person; information about the financial institution; information concerning the relationship between the financial intermediary and the person or entity the financial transaction is between; and any other information that is relevant to the consumer’s or the person’s ability to access, understand, and manage the product or service(s).
The disclosures will be posted online at www.sec.gov and will be subject to a three-day notice period, the agency said.
Under current regulations, financial intermediists are required to provide information about customers, such as their name and email address, when they make a payment, as well as when they sell a product or a service, the commission said.
But the agency also said that the information can be used to identify customers and may include information about how the person makes a purchase or pays for services.
The SEC said in a statement that the new rules would give consumers greater control over how their financial information is used, and that they would require financial institutions to publicly disclose their customers’ names and contact information.
“We will also provide the Commission with an opportunity to consider new disclosures to better protect consumers, including in the case of products or services that may not be subject, under existing law, to disclosure under the Commodity Exchange Act,” the agency’s statement said.
The bureau has issued new rules since the SECs death in February that will expand the kinds of information that can be disclosed and what information is required.
Earlier this year the commission expanded the definition of “disclosure” to include any information the financial intermediary provides to consumers or to third parties.
In a report last month, the bureau said that while the rulemaking process could be lengthy, it would ultimately result in greater transparency for consumers.
“By requiring financial intermediation disclosures to be posted on their websites, the Commission will give consumers a greater understanding of what information financial intermediars provide to consumers, as it will provide consumers with a clearer picture of how they are using the information they collect to make financial decisions, as opposed to what they do with it,” the report said.