Minnesotans Deserve Financial Technology That Protects Their Privacy

Minnesotans should never have to choose between convenience and security.

By State Representative John Huot

Most Minnesotans don’t think twice before opening apps like Robinhood, Acorns, or Venmo to transfer money, split a bill, or invest a few spare dollars. These tools have made managing our finances faster and more convenient than ever before. But behind that convenience lies a system most people have never heard of—open banking—and it’s quietly putting consumers’ privacy and financial security at risk.

Open banking allows consumers to connect their bank accounts to financial apps through third-party data brokers, known as aggregators. These companies handle the flow of financial information between banks and apps, making the technology work. But without clear guardrails, aggregators have been allowed to collect, store, and even sell far more of our financial data than most of us ever agreed to share.

As a state legislator and a member of the Commerce Finance and Policy Committee, I see this as part of a broader challenge we face in protecting Minnesotans from hidden risks in the digital economy. Our state is home to innovators, small business owners, and families who use these tools to manage their money responsibly. They deserve financial technology that helps them, not one that quietly profits from their personal information.

At the heart of this issue is a simple question: Who controls your financial data—you or the aggregators that collect it? Right now, too often, the answer is the aggregators. And that must change.

When Minnesotans connect an app to their bank account, they expect their data will be used only for that purpose. What they don’t realize is that many data brokers harvest much more information than they need—tracking account balances, spending patterns, and transaction histories—and then use that information to build profit-generating products of their own.

Because these middlemen face few limits, financial institutions are now seeing billions of data requests every month. Many of them are automated and not initiated by the consumer. Each unnecessary request creates more exposure, more risk, and more opportunities for fraud. Those risks are not theoretical. Transactions routed through aggregators are 69% more likely to involve fraud than direct bank transactions.

Some companies even use “screen scraping” techniques, which means they log in with a user’s credentials and copy everything visible on the screen. This gives them access to entire account histories and sensitive information that no consumer ever intended to share.

Minnesotans should never have to choose between convenience and security. That’s why it’s critical that policymakers aim to set strong national standards for how aggregators handle consumer data and it’s critical that consumer protection—not corporate convenience—remains the focus. Any regulation on open banking should enforce security standards, limit data access and retention and ban cross-selling data.

Minnesotans pride themselves on fairness, accountability, and trust. We believe in innovation that improves lives, not systems that take advantage of consumers in the fine print. Strong, sensible open banking rules will protect our families, our small businesses, and our financial system from exploitation without explicit consent.

Thankfully, the Consumer Financial Protection Bureau (CFPB) is taking action and has begun the rulemaking process around open banking regulation. Now is the time to act. CFPB and our leaders in Congress should do whatever it takes to make sure the next era of financial innovation reflects Minnesota’s values—innovation guided by integrity, and technology that works for people.

John Huot represents District 56B in the Minnesota House of Representatives.