US agency announces rule making for open banking in late 2020

The Consumer Financial Protection Bureau (CFPB) announced that it plans to issue an advance notice of proposed rulemaking (ANPR) later this year on consumer-authorized access to financial records. The announcement follows a symposium the CFPB earlier this year on the topic, which included experts from consumer groups, fintechs, trade associations, financial institutions and data aggregators.

The purpose of a symposium held earlier this year was to hear from stakeholders and to review the CFPB’s approach to consumer-authorized third-party access to financial records, which has been largely identifying and promoting consumer interests — in access, control, security, privacy, and other areas — and allowing the market to develop without direct regulatory intervention. The ANPR will seek information that will help the CFPB understand and address competing perspectives.

The ANPR will allow the CFPB to:

  • Solicit stakeholder input on ways that the Bureau might effectively and efficiently implement the financial access rights described in Section 1033 of the Dodd-Frank Act. Different market participants have helped authorized data access become more secure, effective, and subject to consumer control. The CFPB expects these trends to continue, but also sees indications that some emerging market practices may not reflect the access rights described in Section 1033.
  • Seek information regarding the possible scope of data that might be made subject to protected access as well as information that might bear on other terms of access, such as those relating to security, privacy, effective consumer control over access and accessed data, and accountability for data errors and unauthorized access.
  • Inquire into whether — and if so, how — issues of regulatory uncertainty with respect to Section 1033 and its interaction with other statutes within the CFPB’s jurisdiction, such as the Fair Credit Reporting Act, may be impacting this market to the potential detriment of consumers; and seek information that may help resolve such uncertainty.

In 2010, Congress authorized the CFPB under Section 1033 of the Dodd-Frank Act to help ensure that consumers have access to and the ability to leverage the data in their records. Since enactment of Section 1033, the extent to which financial institutions, data aggregators and fintechs are using consumer-authorized access to provide new products and services to millions of American consumers has grown in scope and scale.

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