CFPB Launches Public Comment Process for Open Banking Standard Setter Recognition

On September 24, the Consumer Financial Protection Bureau (CFPB or Bureau) announced a significant development in its efforts to implement open banking rules in the United States. The Bureau has initiated a public comment process for the first application from an organization seeking recognition as an open banking standard-setter.

In our previous post, we discussed the CFPB’s final rule issued in June 2024, which outlined the qualifications for becoming a recognized industry standard setter body (Standard Setter Rule). These bodies will play a pivotal role in issuing standards for companies to comply under the forthcoming Personal Financial Data Rights Rule under Section 1033 of the Consumer Financial Protection Act (Section 1033 Rule).

The CFPB’s Standard Setter Rule identifies five key attributes that standard setters must demonstrate to gain recognition:

• Openness: The process must be open to all interested parties, including public interest groups, app developers, and financial firms.
• Transparency: Procedures must be transparent and publicly available.
• Balanced decision-making: No single special interest should dominate the process. The decision-making power to set standards must be balanced across all interested parties, including consumer and other public interest groups.
• Consensus: Standards development must proceed by consensus, with fair consideration of comments and objections.
• Due process and appeals: The body must use documented, publicly available policies and procedures, including adequate notice of meetings, time for review, and an impartial appeals process.

According to the Bureau, these attributes are designed to ensure that the standard-setting process is inclusive, transparent, and fair, ultimately leading to the development of effective open banking standards that serve the interests of all stakeholders, especially consumers. In furtherance of that goal, the Standard Setter Rule also states that when an organization applies for recognition, the CFPB may publish the application and seek public input. This process is designed to enable stakeholders who believe the application is deficient in some respect to bring such evidence to the CFPB’s attention. In response to comments, or to the CFPB’s own analysis, applicants may choose to adjust applications before final resolution.

The Bureau is now seeking public comment on the first application for recognition as an open banking standard-setter, submitted by the Financial Data Exchange (FDX). To review the FDX application and submit comments, visit the CFPB’s Application for Open Banking Standard Setter Recognition website. Other applications published for public comment will also be posted at the same location. We will continue to follow and report on these developments.