Yes, the CFPB announced that the definition of a key rule concerning Section 1033 of the Dodd-Frank Act was going to be revisited. They also have halted enforcement of any rules, which has banks basically self-regulating. Even if enforcement lacks teeth, it doesn't make the actions permissible.
That said, from my conversations with those who contributed to both the CFPB 500 page decision and the FI's 50 page lawsuit, it seems that all recognize *something* needs to and will be done. However, no entities have stepped forward to try and re-write the rule.
You have the FTA calling the recent change of course " a handout to Wall Street banks, who are trying to limit competition and debank Americans from digital financial services". Bank lobbying groups are pleased with the "unlawful" rule being "set aside" going on to state:
"Banks have already made it possible for hundreds of millions of Americans to safely access and share their data – the current rule undermines and disrupts that ecosystem to the benefit of tech companies looking to profit even further from consumers’ data."
Banks are liable to sandbag any government ruling until they can stand up their own system -- similar to what happened with RTP and FedNow last decade. The challenge is that the US has thousands of financial institutions. Even if the big 10-20 which own the EWS or TCH consortiums put forward a new standard, it remains unlikely that the (very) long tail of smaller banks will fall in line absent a government ruling.
Great article. I've never understood the open banking thing because of how quickly it can get so complex and expensive. In Australia the banks spent a fortune on open banking and constantly have to meet new regulatory demands - yet there are very low (if any) benefits accruing to customers.
The benefits are more to the ecosystem (better data, new business models) with the customer benefits coming as new use cases (pay by bank) or better services. But you're right, there isn't much changing on the day to day customer experience.
I thought the CFPB open banking framework was rejected by the current administration. Any idea if they're coming up with new regulations?
Yes, the CFPB announced that the definition of a key rule concerning Section 1033 of the Dodd-Frank Act was going to be revisited. They also have halted enforcement of any rules, which has banks basically self-regulating. Even if enforcement lacks teeth, it doesn't make the actions permissible.
That said, from my conversations with those who contributed to both the CFPB 500 page decision and the FI's 50 page lawsuit, it seems that all recognize *something* needs to and will be done. However, no entities have stepped forward to try and re-write the rule.
You have the FTA calling the recent change of course " a handout to Wall Street banks, who are trying to limit competition and debank Americans from digital financial services". Bank lobbying groups are pleased with the "unlawful" rule being "set aside" going on to state:
"Banks have already made it possible for hundreds of millions of Americans to safely access and share their data – the current rule undermines and disrupts that ecosystem to the benefit of tech companies looking to profit even further from consumers’ data."
Banks are liable to sandbag any government ruling until they can stand up their own system -- similar to what happened with RTP and FedNow last decade. The challenge is that the US has thousands of financial institutions. Even if the big 10-20 which own the EWS or TCH consortiums put forward a new standard, it remains unlikely that the (very) long tail of smaller banks will fall in line absent a government ruling.
Great article. I've never understood the open banking thing because of how quickly it can get so complex and expensive. In Australia the banks spent a fortune on open banking and constantly have to meet new regulatory demands - yet there are very low (if any) benefits accruing to customers.
The benefits are more to the ecosystem (better data, new business models) with the customer benefits coming as new use cases (pay by bank) or better services. But you're right, there isn't much changing on the day to day customer experience.