American Fintech Council Identifies Hurdles in CFPB Open Banking Proposal


The American Fintech Council (AFC) has submitted its response to the Client Monetary Safety Bureau (CFPB) on its open banking proposal. 

The CFPB proposed a change on private monetary knowledge rights implementing Part 1033 of the Dodd-Frank Act. It has acknowledged that it goals to finalise the rule in 2024, formally establishing customers’ proper to regulate and securely share their monetary knowledge and accelerating open banking in the USA.

“Many market members have already sought to develop applied sciences and requirements to facilitate client entry to non-public monetary knowledge,” wrote the CFPB of their introduction to the rulemaking. “The CFPB intends to speed up the shift to a extra open and decentralized system via the issuance of a ultimate rule.”

“Our members are setting the usual for the accountable use of client knowledge and utilising innovation to extend competitors within the monetary providers trade to enhance entry significantly to households traditionally underserved,” stated Phil Goldfeder, chief govt officer of AFC. “Thanks to Director Chopra and the staff on the CFPB for permitting us to collaborate on this historic effort. We sit up for our continued partnership on this and plenty of different proposals.”

“AFC helps the targets of the Proposed Rulemaking to codify customers’ rights to entry and management their monetary knowledge, in addition to advance competitors via a broader vary of markets as a result of availability and transferability of this knowledge by customers.” wrote Ian P. Moloney, SVP, head of coverage and regulatory affairs, in AFC’s latest letter to the CFPB. “AFC, and its members strongly help customers’ rights to make their very own selections relating to their knowledge and to grant entry to knowledge suppliers that they deem useful.”

Hurdles forward

The AFC applauded the CFPB for the trouble of their almost 300-page proposal. Nonetheless, it additionally recognized some vital considerations relating to the

  • Scope and protection of the proposed rulemaking
  • Limitations imposed on knowledge suppliers and third events relating to the suitable use of client knowledge
  • Framework for establishing and recognising standard-setting our bodies as issuers of certified trade requirements for client knowledge
  • Reauthorisation necessities

Along with figuring out the considerations, AFC supplied particular suggestions on how the Bureau might treatment these points. Consequently, it’ll strengthen the initiative. Particularly, AFC famous the significance of making certain that CFPB doesn’t unnecessarily limit the authentic use of client knowledge in a fashion that limits the providing of accountable, progressive services and products to the detriment of customers.

“AFC and its members search to make sure a aggressive, consumer-protected open banking ecosystem,” concluded Moloney within the AFC submission. “The CFPB, via its Proposed Rulemaking, has the chance to make sure that the US open banking ecosystem successfully meets its underlying targets of making certain client entry to their knowledge and bettering competitors within the monetary providers trade, whereas additionally persevering with to satisfy the company’s mission as designated beneath the Dodd-Frank Act.”

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