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The Consumer Financial Protection Bureau said Thursday U.S. open-banking standards will be developed under the aegis of Financial Data Exchange Inc., a standards-setting body.
The CFPB recognized FDX as the standard-setting body under the bureau’s Personal Financial Data Rights rule. The final version of that rule was released in October, but has met challenges, notably a lawsuit filed by the Bank Policy Institute and the Kentucky Bankers Association.
In 2022, the CFPB outlined how it might regulate data sharing. FDX will have a five-year term as the standards body for the rule.
The rule will require financial institutions, credit card issuers, and other financial-service providers to share data at a consumer’s direction with companies offering competing products. As a result, consumers will be able to access, or authorize third-party access to, such data as transaction information, account balances. information needed to initiate payments, upcoming bill payments, and basic account-verification data. Financial-services providers will be required to make such information available free of charge to consumers.
“Today, FDX already has an API technical standard that is used to facilitate secure data sharing for over 94 million consumer accounts in North America, with adoption continuing to grow,” Kevin Feltes, FDX chief executive, says in a statement to Digital Transactions News. FDX has developed its own code for financial-data sharing.
“In the wake of the CFPB’s final Rulemaking in October 2024, FDX is in the process of updating its standards to more fully align and support compliance with relevant portions of the 1033 Rulemaking. FDX is aiming to issue a consensus standard data format relevant to 1033 compliance in early 2025,” Feltes says.
FDX submitted its application for the standards-setting role in September. The Digital Governance Standards Institute, an Ottawa, Ontario-based organization, also applied, according to the CFPB. FDX’s origins date back to 2017 as a grassroots effort among financial institutions, fintechs, and data aggregators. The group was formalized as an organization in 2018 when it became a subsidiary of the Financial Services Information Sharing and Analysis Center, a Reston, Va.-based nonprofit.
Among the conditions for approving FDX are a ban on “pay-to-play” and other conflict-of-interest issues, mandatory reporting on market adoption, and transparency and a commitment to making the standards available to members and nonmembers of FDX. FDX has more than 200 member organizations.
