CFPB Warns Big Banks, Don’t Mess With Open Banking

The CFPB tells big companies about their attempts to control open banking standards. As the Consumer Financial Protection Bureau gets ready to adopt a rule about personal data rights, it has warned that it will not let big banks change open banking standards to help themselves.

The White House has been pushing the CFPB to formalize a law that Congress passed in 2010 but was never used. This law gives people the right to control their personal financial data.

The bureau says that a new rule on personal data rights, which will be finalized next year, can help speed up the move to open banking, boost competition, and protect financial privacy.

In a blog post, Rohit Chopra, the head of the Consumer Financial Protection Bureau (CFPB), says that the agency will not “micromanage” open banking and that many of the details will be taken care of by setting standards outside of it.

However: “To thrive, standard-setting organisations must not skew to the interests of the largest players in the market. They must reflect the full range of relevant interests — consumers and firms, incumbents and challengers, and large and small actors.

In consumer finance, powerful firms have sometimes looked to manage emerging technologies through utilities, networks, or standard setting organisations skewed to their interests – or even owned by them.

Control of the open banking system by such players threatens competition and the consumer’s control of their own financial affairs.

While the CFPB intends for the market to play a significant role in developing and maintaining open banking standards, it will pay close attention to any attempts to limit consumers’ exercise of their data rights, particularly where such attempts proceed from coordinated efforts by dominant firms.”