The Consumer Financial Protection Bureau (CFPB) has appointed Financial Data Exchange (FDX) as the first approved standard-setting body for its newly unveiled open banking framework. This recognition aligns with the CFPB’s Personal Financial Data Rights rule, introduced in October, which mandates that financial institutions, credit card issuers, and similar providers unlock consumer financial data and transfer it to other providers upon request, free of charge.
To streamline implementation, the CFPB created a formal application process to identify qualified industry standard-setting bodies capable of issuing compliance guidelines for the new rule. With over 200 members, FDX has been recognized for its efforts to create and maintain a common, secure, and interoperable standard for accessing financial data.
FDX’s approval comes with specific conditions aimed at ensuring fair and transparent standard-setting processes. The CFPB has explicitly stated its intention to prevent dominance by major financial institutions, warning that it will not endorse any organization favoring select industry players. Among the conditions are bans on “pay-to-play” practices, mandatory reporting on market adoption rates, and provisions to ensure FDX’s consensus standards are publicly available and equally accessible to members and non-members alike.
The move towards open banking, however, is not without opposition. In October, The Bank Policy Institute and the Kentucky Bankers Association challenged the CFPB in court, claiming the agency exceeded its regulatory authority by introducing the new rules.
FDX’s role under the CFPB framework will be instrumental in shaping the future of open banking by providing standardized and equitable guidelines for data sharing, while maintaining a focus on consumer rights and market integrity.