CFPB approves Financial Data Exchange as first “standard setting body” under new US open banking rule
The Consumer Financial Protection Bureau (CFPB) has officially recognised Financial Data Exchange Inc (FDX) as a “standard setting body” under the new Personal Financial Data Rights rule.
CFPB approvals FDX as “standard setting body”
Introduced in October, the rule requires banks, credit card companies and other financial services providers to let their customers transfer their personal financial data to another provider, free of charge.
FDX operates as a non-profit organisation seeking to “develop, improve and maintain a common, interoperable standard for secure consumer and business access to financial records” across the US and Canada, according to the CFPB’s approval order.
Comprising over 200 members, including depository and non-depository commercial entities, data providers, consumer groups and open banking providers, the organisation first submitted its approval application to the regulator in September.
With its application the first to be approved under the new rule, FDX must now comply with a five-point expectation for a standard setting body as previously outlined by the CFPB in June.
These include ensuring an open process that ensures broad participation, maintaining transparency, and balancing decision-making power across all stakeholders, including consumer groups.
Standards must be developed through consensus, with fair consideration of all feedback. Additionally, FDX must follow clear, documented procedures with proper notice of meetings, time for review, and an impartial appeals process.
FDX prepared for the approval with the appointment of Kevin Feltes, former head of partnerships and strategy for connected banking at JP Morgan Chase, as CEO in November.
When announcing Feltes’ appointment, FDX also hinted at its intention to secure a position within the open banking framework being developed by Canada’s Department of Finance, which is expected to arrive later this year.
