CFPB plans open banking rule in 2023 | Bank Automation News

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LAS VEGAS — The Consumer Financial Protection Bureau (CFPB) is planning to propose a new rule in 2023 requiring financial institutions to share consumer data upon consumers’ requests, CFPB Director Rohit Chopra said Tuesday at Money 20/20 in Las Vegas.

As more financial institutions adopt open banking and data-sharing becomes the norm, a new rule surrounding the open banking space has been on the horizon.

“First, we expect to propose requiring financial institutions offering deposit accounts, credit cards, digital wallets, prepaid cards and other transaction accounts to set up secure methods, like APIs, for data-sharing,” Chopra said.

“We will be looking at a number of ways to stop incumbent institutions from improperly restricting access when consumers seek to control and share their data,” he added.

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The CFPB is also “exploring safeguards to prevent excessive control or monopolization by one or even a handful of firms,” Chopra said, noting, “It’s critical that no one ‘owns’ critical infrastructure.”

Rulemaking process

The rulemaking process begins this week and the CFPB will publicly release a discussion guide that seeks feedback on the proposed rule from small banks, Chopra said.

“Through that process, we’ll hear from small banks and financial companies who will be providers of the data, as well as the small banks and financial companies who will ingest the data,” he said.

Based on the responses, the CFPB will publish a report and inform the proposed rule, which is planned for issuance in late 2023 to be finalized by 2024, Chopra added.

“The rule will be able to facilitate new approaches to underwriting, payment services, personal financial management, income verification, account switching and comparison shopping,” he said.

Go to Publisher: Bank Automation News
Author: Whitney McDonald