- The CFPB finalized a rule establishing a process for recognizing open banking standards and outlined qualifications for entities to become recognized standard-setting bodies (Final Rule).
- Under the Final Rule, standard-setting organizations can issue standards that companies can use to comply with the CFPB’s upcoming Personal Financial Data Rights Rule (Data Rights Rule). This rule aims to promote open and decentralized banking by requiring banking institutions to make consumer financial data accessible to consumers and authorized third parties.
- Organizations seeking to be recognized as a standard setter by the CFPB must meet certain criteria, including openness, transparency, balanced decision-making, consensus-based standards development, and adherence to documented due process and appeals procedures. The Final Rule details the application process, including a step-by-step guide, and sets a maximum recognition period of five years, after which re-application is required. The CFPB also retains authority to revoke or modify recognition if necessary.
- We previously reported on the CFPB’s request for public comment, which was issued in connection with the proposed Data Rights Rule.