A new rule on personal financial data rights – also known as “open banking” — has been proposed by the federal consumer financial protection agency, the agency posted Thursday on a Federal Register website.
The proposal is scheduled to be published in the Federal Register Friday.
The Consumer Financial Protection Bureau (CFPB) issued the proposed rule implementing section 1033 of the Consumer Financial Protection Act (CFPA) of 2010, according to the reports. If made final, the proposal would replace a rule adopted late last year by the consumer bureau. However, 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.”
Personal Financial Data Rights Reconsideration
Leave a Reply