In light of the Consumer Financial Protection Bureau’s (CFPB) decision to eliminate its open banking rule, the American Fintech Council (AFC) is urging the regulator to safeguard consumers’ rights to access and share their financial data.
The CFPB had only recently established the Personal Financial Data Rights final rule, granting Americans the ability to instruct their banks to share financial data with third-party providers. However, with a new administration in place by May, the agency petitioned a court to rescind the 1033 open banking rule.
This shift has been welcomed by some in the traditional financial sector, allowing banks to express concerns over potential liabilities regarding data breaches and the ability to charge for data access.
In response, the AFC has emphasized the importance of maintaining consumers’ rights to access and share their data, prohibiting data access fees, and ensuring that the United States maintains its leadership in open banking.
Fees are a significant concern for the fintech industry. For instance, Plaid recently agreed to pay JPMorgan for access to customer data after the bank claimed aggregator firms were overwhelming its systems with excessive requests.
Phil Goldfeder, CEO of ADC, stated, “Consumers have a right to control their own financial data and use it to access the financial tools that work best for them. Imposing fees on consumer data is a direct threat to responsible innovation, competition, and the millions of Americans who rely on responsible fintech tools to manage their finances each day.”
The AFC’s comments reflect similar sentiments expressed by the Financial Technology Association, which characterized the decision to abolish the rule as a “handout to Wall Street banks.”