Registration and Regulation Considered
Web aggregation is among the most recent financial services developments. Web aggregators collect an individual’s financial account information from a variety of web sites and enable the individual to view and manage it all at a single site. Current estimates are that from 100,000 to over 1 million people in the United States use web aggregators to access both financial information such as bank and brokerage accounts and nonfinancial information such as frequent flyer miles.
Star Systems, a leading electronic payments network, recently posted an excellent white paper on web aggregators. Star Systems, Web Aggregation: A Snapshot (Aug. 2000). Web aggregators are sometimes pejoratively referred to as “screen scrapers.” Strictly speaking, however, only aggregators that function without the permission of the underlying financial institutions are screen scrapers; some aggregators have direct feeds from the institutions where the information originates. Both arrangements have their disadvantages, and both arrangements put the customer at risk with respect to the aggregated financial information. Historically (which, in this context, means “in earlier months”), financial institutions have actively resisted aggregators, and some periodically change their web interfaces for the express purpose of defeating screen scrapers. More recently, however, some large financial institutions have themselves begun offering web aggregation services to their online account holders.
The legal status of web aggregators is largely uncertain. The Federal Reserve in June requested comments by August 31 on the application to web aggregators of its Regulation E on electronic fund transfers. 65 Fed. Reg. 40061, 40064 (June 22, 2000). The Federal Trade Commission has stated that web aggregators are financial institutions subject to the privacy rules of the Gramm-Leach-Bliley Act. 65 Fed. Reg. 33646, 33655 (May 12, 2000).
The Star Systems white paper may be accessed in PDF format from http://www.star-system.com/news-corpresearch.html
Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to firstname.lastname@example.org
Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.
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