The Consumer Financial Protection Bureau (CFPB) made a small move with big potential today. The U.S. agency issued an advanced notice of proposed rulemaking (ANPR) that requests information from the public on how consumers’ access to their financial records should be regulated.
The CFPB is asking “all interested parties” to comment on how the agency develops regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records.
This ANPR is the first step in creating formal regulation in the U.S. around open banking. This explicit regulation around structured data access is something that the E.U. has had in place via PSD2 for nearly three years.
The open banking environment in the U.S. is slightly hostile at the moment. This is partially because of the number of stakeholders involved. Consumers want to be able to use their financial data across a multitude of third party platforms, third party fintechs want to create compelling services to help individuals manage their finances, banks want to keep their consumers’ information secure, and data access providers are in the business of opening up the data.
Over the past few years, there have been multiple instances of large banks clashing with data access providers. Unfortunately, when banks shut out data access companies, the main loser is the end consumer, who usually ends up frustrated that their bank won’t connect to their favorite new fintech app. Banks would argue, however, that they are protecting the consumer from unnecessary risk.
Today’s move by the CFPB is a monumental step because once regulation is formalized in the U.S., all players will work from a standardized approach.
If you’re interested in submitting your thoughts to the CFPB, you can do so via the Federal eRulemaking Portal at https://www.regulations.gov or you can email 2020-ANPR-1033@cfpb.gov. Include Docket No. CFPB-2020-0034 or RIN 3170-AA78 in the subject line.
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