Clifford Chance

Overview Of The CFPB's Open Banking Proposal

December 22, 2023

On October 19, 2023, the Consumer Financial Protection Bureau issued a proposal on Personal Financial Data Rights (Proposed Rule), which implements section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1033) and accelerates a shift to open banking in the United States. This is a meaningful development as the United States catches up to other jurisdictions around the world, including e.g., Europe and Australia, where open banking regulations came into force in 2019.  Comments to the Proposed Rule are accepted through December 29, 2023, and the CFPB intends to finalize the regulation by Fall 2024.

The Proposed Rule, similar to other open banking regulations, sets out a framework to govern consumer access to financial data through Application Programming Interfaces and outlines related requirements for financial institutions and other actors who handle such data.  Central to the Proposed Rule are the themes of consumer consent and control over financial data; stringent security measures for covered data in transit and at rest; standardized, secure and interoperable APIs; broader competition and innovation within the financial sector; and regulatory oversight to ensure appropriate management of opportunities and risks.

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