Consumer Financial Protection Bureau Director Rohit Chopra released an update today on the bureau’s Personal Financial Data Rights rule-sharing based on his remarks given March 13 at the Financial Data Exchange Global Summit in Washington, D.C.
Chopra discussed at the FDX event how the bureau is identifying standard-setting organizations.
FDX, a financial services consortium, has standards in place about how consumer data should be shared via APIs to ensure security and authentication, according to the FDX website.
At the summit, FDX announced it now has 76 million consumers using its FDX API, Don Cardinal, managing director of FDX, said on March 12 at the event.
The Personal Financial Data Rights Rule will require financial institutions to share consumer data upon request from the consumer, according to the CFPB’s Oct. 19, 2023, proposal.
“Before we finalize the Personal Financial Data Rights rule this fall, we intend to codify what attributes standard-setting organizations must demonstrate to be recognized under the rule,” he said.
Once those standard-setting organizations are selected, compliance will be easier to recognize, he said. Standard-setting organizations will “prevent large incumbents from rigging standards in their favor.”
The proposed open banking regulation will help level the playing field among smaller financial institutions and large incumbents, Joshua Jordan, digital engagement director at Jack Henry, told Bank Automation News.
According to the CFPB, standard-setting organizations should:
- Be balanced so that no single group dominates decision-making;
- Have a funding structure that does not suggest favoritism; and
- Prioritize considerations of consumer privacy interests.
“If we’re unable to identify standard-setting organizations, we will be prepared to step in with more detailed guidance,” Chopra said in his remarks.
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