CFPB Publishes First Application From Potential Open Banking Standard-Setter

The Consumer Financial Protection Bureau (CFPB) is inviting public comments on the first application from an organization seeking recognition as an open banking standard-setter.

The application from Financial Data Exchange (FDX) has been published by the CFPB and the comment deadline is Oct. 16, according to a press release and notice issued Tuesday (Sept. 24) by the regulator.

“Standard-setters can develop standards that will help ensure a safe, secure, reliable and competitive open banking framework,” the release said.

The five key qualifications for becoming a recognized standard-setting body are openness, transparency, balanced decision-making, consensus, and due process and appeals, per the release.

“Your input is crucial in evaluating whether FDX is equipped to develop fair and effective open banking standards that serve the interests of all stakeholders, especially consumers,” the release said.

In its application, FDX said that as a technical standards setting organization for sharing permissioned financial data in the United States and Canada, it shares the CFPB’s goals for financial technical standards.

“Through the development, adoption and constant improvement of the FDX API … FDX and its diverse membership have made significant progress transitioning from credential-based ‘screen scraping’ to the FDX API, with over 94 million consumer accounts using the FDX API as of Fall 2024,” the company wrote in its application. “Through contributions from its members, FDX has constantly improved the FDX API in order to keep up with industry trends and technological improvements.”

The CFPB’s proposed rule dubbed “Rule 1033” or “Section 1033” is at the center of the U.S. regulations and standards that give a roadmap to how financial data is permissioned by consumers and shared with financial services providers, giving shape to open banking in the country, PYMNTS reported Sept. 17.

The regulator has said that the processes on standard settings should be “open to all interested parties, including public interest groups, app developers, and a broad range of financial firms with a stake in open banking.”

Nearly 46% of U.S. adults express strong interest in using open banking payments, though only 11% have used these payments in the past year, according to the PYMNTS Intelligence and Trustly collaboration, “Consumer Sentiment About Open Banking Payments.”