NEW FRAMEWORK EXPECTED TO IMPROVE TRANSPARENCY AND GIVE CONSUMERS MORE CONTROL OVER THEIR FINANCIAL INFORMATION
The CFPB announced it will issue an interim rule governing open banking, aimed at improving transparency and consumer control over financial data.
The U.S. Consumer Financial Protection Bureau (CFPB) will issue an interim rule on open banking, marking one of the most significant steps yet toward modernizing how Americans share, control and authorize the use of their financial data. The announcement comes as global financial systems increasingly adopt open-banking models to promote competition and innovation.
Open banking allows consumers to safely grant third-party apps — such as budgeting tools, lending platforms and payment services — access to their financial information. The CFPB says the upcoming rule will seek to standardize data-sharing practices, strengthen privacy protections and ensure consumers can easily switch financial providers without losing access to their historical data.
Officials say the interim rule will also address concerns around data security, requiring stronger authentication standards and clearer disclosures about how information is stored, used or shared. The framework aims to reduce reliance on screen-scraping technology, encouraging a shift toward secure API-based data exchanges.
Financial institutions, consumer advocates and fintech companies have been closely watching the regulatory process, as the new rule could reshape competition between traditional banks and digital platforms. Some banks have pushed for phased implementation, while fintech firms favor more rapid adoption to accelerate financial-product innovation.
The CFPB stressed that public feedback will play a central role in refining the rule before it becomes final. Stakeholders will be able to submit comments once the interim rule is published in the Federal Register.
The new framework is expected to be a cornerstone of U.S. financial-data modernization efforts and could influence future digital-banking legislation.
