WASHINGTON –U.S. Senator John Boozman (R-AR) today welcomed the news that the Financial Industry Regulatory Authority (FINRA) shelved a proposed regulation that carried serious privacy issues for the general public.
FINRA’s Comprehensive Automated Risk Data System (CARDS) proposed to collect customer brokerage account activity, balances and holdings for 110 million American investors in a central database. The proposal carried with it serious privacy implications for investors and increased regulatory costs and burdens for the industry.
“This regulation was troublesome from the start,” Boozman said. “The security concerns are obvious to everyone involved as the proposal endangers extremely sensitive investor data. And with a price tag over half a billion dollars, it would put a wet blanket on the industry without a real, robust cost-benefit analysis to support it.”
In written testimony before the House Financial Services Capital Markets Subcommittee, FINRA Chairman Richard Ketchum said, “We will not move ahead with the present form of the proposal and will not move forward with an amended version until we conclude that the concerns raised in the comments have been addressed.”
Boozman, who serves as Chairman of the Senate Appropriations Subcommittee on Financial Services and General Government, said this is the right approach to protect both investor privacy and ensure that the industry is not unduly burdened with another poorly drafted mandate.
“This proposal was universally opposed from the start, and it was wise of FINRA to listen to the concerns that resulted from this misguided regulation,” Boozman said. “Departments and agencies across Washington could benefit by following the same approach. The Obama Administration, like none other in recent times, is abusing the regulatory process. Too many of these proposed mandates, like the CARDS proposal, are poorly-thought out and carry major unintended consequences for those impacted by them. Washington must take a step back from the big government approach to problem-solving as it is only creating additional difficulties for the American people.”