This article has been revised to reflect the Aug. 22 publication of an advance notice of proposed rulemaking, or ANPR.
A new rule on personal financial data rights – also known as “open banking” – is contemplated in an advance notice of proposed rulemaking (ANPR) from the federal consumer financial protection agency, according to a Federal Register notice.
The Consumer Financial Protection Bureau (CFPB) issued the ANPR related to section 1033 of the Consumer Financial Protection Act (CFPA) of 2010. An eventual proposed rule could replace a rule adopted late last year by the consumer bureau. On July 29, a federal court stayed the rule after legal challenges were raised, and the bureau said it would pursue a new rulemaking. The agency said it would aim to substantially revise the rule and provide further justification.
Section 1033 of the CFPA requires the bureau to issue a rule on standards for sharing consumer financial data. Last October, the bureau adopted a final rule mandating that banks and other financial institutions provide consumers with the ability to access and transfer their financial data to authorized third parties at no cost. However, the 1033 rule faced immediate legal challenges, with banks and their state associations, among others, arguing that it compromised consumer privacy and data security.
When adopted, the bureau asserted the rule – dubbed the Personal Financial Data Rights Rule (also known as “open banking” or the “1033 rule”) – would ensure that consumers could access and share data associated with bank accounts, credit cards, mobile wallets, payment apps, and other financial products.
In January, the bureau recognized the first standard-setting group for “open banking.” The group, Financial Data Exchange (FDX). Under the rule, banks, credit card issuers, and other financial providers were required to “unlock” an individual’s personal financial data and transfer it to another provider at the consumer’s request for free. FDX’s role was to “develop, improve and maintain a common, interoperable standard for secure consumer and business access to financial records.”
The ANPR is out for a public comment period that ends Oct. 21.
Federal Register notice of ANPR: Personal Financial Data Rights Reconsideration