Ninth Wave’s Post

Happy New Year! As we kick off 2025, here’s another wave of discussion—and some fear, uncertainty, and doubt—around Open Banking. This article offers interesting commentary on the CFPB’s Open Banking initiatives and the Financial Data Transparency Act. I’d love to hear your thoughts, questions, or comments on Open Banking progress. Personally, I don’t see this as a technical challenge—it’s not. The real hurdle lies in navigating the political dynamics among the many stakeholders, each with differing interests. It’s time to cut through the bureaucracy and move forward with the technical solutions that are already in place. Open Banking is a win-win: it’s good for banks and even better for their account holders. Let’s make progress together! #OpenBanking #FinancialDataTransparency #CFPB #BankingSolutions 🏦💡

And, as expected, the Consumer Financial Protection Bureau's 1033 open banking final rule was issued this morning! As one of my former CFPB colleagues commented last week, 1033 on 1022! It's been a long time coming, but we now have a final rule. More to come (and, as the CFPB notes, additional rules to address more products, services, and use cases are on the docket). #cfpb #openbanking #financialservices #financialinstitutions #regulatorycompliance #fintech #fintechs #fintechinnovation #data #consumerprotection #consumerfinance #consumerfinancialservices #banking #banks https://lnkd.in/e_AEmJc8

CFPB finalized a new rule that requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free. Compliance with the rule will be implemented in phases, with larger financial institutions subject to the rule sooner than smaller ones. Financial institutions will be required to comply based on their size; the largest institutions will have to comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030. Certain small banks and credit unions are not subject to this rule.

The CFPB's Final 1033 Rule seeks to open banking to consumers--it answers some questions and leaves many unanswered including its potential for anticompetitive effects. My Morgan, Lewis & Bockius LLP colleagues David Monteiro, Richard S. Taffet, Michelle Park Chiu, Michael Cumming, and Jordy Hur and I run through the key takeaways. Read our summary - first in a series.

🚨 BREAKING NEWS 🚨 The CFPB has finalized a rule mandating financial institutions to unlock and transfer individuals' financial data to another provider upon request, free of charge. This move brings the U.S. closer to a competitive, safe, and reliable "open banking" system. This significant step activates Section 1033 of the Consumer Financial Protection Act, enacted by Congress in 2010. By boosting competition and giving consumers more freedom to switch providers, the CFPB notes that this rule will lead to improved products, lower prices, and enhanced customer service in the financial sector. Implementation will proceed gradually, with full compliance expected by 2030. Learn more: [CFPB Rule](https://lnkd.in/eHbhitkT)

📣 Heads up to our financial institution followers 📣 Today, the Consumer Financial Protection Bureau (CFPB) finalized its rule on Personal Financial Data Rights. The final rule requires financial institutions, credit card issuers, and other financial providers to “unlock” an individual’s personal financial data and transfer it to an authorized third party at the consumer’s request for free. Compliance with the regulation will be implemented in phases beginning April 1, 2026. According to statements made by the CFPB, the final rule activates Section 1033 of the Consumer Financial Protection Act, a dormant legal authority enacted by Congress in 2010. While this is not the first rule that CFPB has issued to open the door to “open banking,” the CFPB views this as the first significant rule.  Check out their press release here: https://lnkd.in/g5X7UnXU

The CFPB predicts that 1033 will simplify Consumers switch to providers with superior rates and services. By fueling competition and consumer choice, the rule will help lower prices on loans and improve customer service across payments, credit, and banking markets.

#CFPB issues it’s long-awaited rule on open banking today. From the press release: “The rules will boost competition by giving people more freedom to switch banks or providers and shop around for the best deal. This increased choice will incentivize financial institutions to offer improved products that help them attract new customers and retain old customers.” “Compliance with the rule will be implemented in phases, with larger providers subject to the rule sooner than smaller ones. Financial firms will be required to comply based on their size; the largest institutions will have to comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030. Certain small banks and credit unions are not subject to this rule.” https://lnkd.in/eRxpSWM9

Open banking regulation has now officially come to the United States. Published just this morning, the U.S. Consumer Financial Protection Bureau has dropped their final Personal Financial Data Rights rule, their answer to open banking. There's going to be lots to digest here, but what immediately jumps out is the considerable changes to the financial institution tiering and respective compliance timelines, especially for the largest banks. Whereas the first two tiers were previously given 6 months and 12 month respectively to comply, the final rule extends that to April 2026 for the first tier and April 2027 for the second; however, the thresholds for the size of bank covered by each tier have changed considerably as well, so the comparison is not exactly direct. Also of note, institutions with less than 850M in total assets seem to no longer have a compliance date attached to them. Below is a breakdown of the old tiers and timelines versus the new ones. Old Tiers and Timelines: - Tier 1 (>500B): April, 2025 (6m) - Tier 2 (>50B): Oct, 2025 (12m) - Tier 3 (>850M): April, 2027 (2.5y) - Tier 4 (<850M): Oct, 2028 (4y) New Tiers and Timelines: - Tier 1 (>250B): April 1, 2026 - Tier 2 (>10B): April 1, 2027 - Tier 3 (>3B) April 1, 2028 - Tier 4 (>1.5B): April 1, 2029 - Tier 5 (>850M): April 1, 2030 Important links: Press Release: https://lnkd.in/gVuKCuxA. Final Rule (38 pages): https://lnkd.in/gqSB62JS Associated Notice (594 pages): https://lnkd.in/gZgWrEEz Time to get to work! #openbanking #openfinance #cfpb #usa

Featured in Bloomberg Law: Mike G. Silver, partner at Husch Blackwell, discusses what’s next for the CFPB's open banking rule. Mike notes that all sides likely are in favor of some regulation, but “the sticking point is how far those guardrails should go.” He also highlights the potential for the CFPB to pause litigation under new leadership as the open banking system continues to evolve. Read the article: https://lnkd.in/gjfwFWJF #OpenBanking #FinancialRegulation #CFPB