Fintech associations call for CFPB to finalize the open banking rule

A coalition of fintech trade associations is urging the Consumer Financial Protection Bureau (CFPB) to finalize a strong open banking rule that protects consumers’ rights to their financial data.

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The CFPB’s open banking rule seeks to give consumers greater rights, privacy, and security over their personal financial data. The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free. It will allow consumers to more easily switch providers, fueling competition and consumer choice. The CFPB also said the rule will help lower prices on loans and improve customer service.

In a letter to the CFPB, the coalition urged the CFPB to take two specific actions on the open banking rule:

• Uphold Established Definition of “Representative.” The CFPB defines a “consumer” as “an individual or an agent, trustee, or representative acting on behalf of an individual.” The coalition called on the Bureau to uphold the established definition of “representative” that allows consumers to share their data with third-party services of their choosing. “Narrowing the definition to only fiduciaries, as the banks argue, would not align with the intent of the statute and significantly hamper the way open banking functions today,” the coalition argued in the letter. A restrictive interpretation could force consumers to “manually download and upload their financial data to use the apps and services of their choice – a clunky and insecure process that defeats the purpose of open banking.”
• Preserve the Prohibition on Data Access Fees: The coalition opposes allowing big banks to charge fees for consumer data access, noting that the statutory language is clear: banks “shall make available” consumer financial data “upon request,” not upon charging a fee. “This isn’t a suggestion or a service that banks can charge for – it’s a legal requirement,” the letter states. “Allowing banks to charge fees would let them pass their everyday operating costs onto consumers and competitors, which would undermine competition and consumer choice.”

The coalition consists of the Financial Technology Association, American Fintech Council, Blockchain Association, Crypto Council for Innovation, Financial Data and Technology Association, National Association of Convenience Stores, National Grocers Association, and National Retail Federation.

“Over 100 million Americans rely on open banking to access affordable, easy-to-use tools that help them take control of their financial lives and manage their businesses,” the coalition wrote. “These include digital payment apps, investment platforms, cryptocurrency wallets, and AI-powered financial assistants.”

The coalition argued that strong open banking policies put the United States on par with leading economies, including the United Kingdom, Singapore, Brazil, India, Japan, Canada, and the European Union.