Recent/upcoming developments… The CFPB has submitted a proposed rule implementing Sec. 1033 of Dodd Frank to the White House Office of Information and Regulatory Affairs (OIRA) for review.  This is the last stage in the process prior to the proposal being issued and implies it could be released in a matter of weeks or even days.  The so-called “open banking” rule implements Dodd Frank’s requirement that banks and card issuers make customer data available to third parties (e.g., fintechs, data aggregators).  Banks successfully sued the Biden CFPB to stop issuance of their version of the rule.  Banks objected to the Biden rule’s prohibition on charging third parties for access to customer data and had concerns about the potential liability they might incur from providing data access.

Our outlook… It is generally expected that the CFPB’s rule will enable banks to charge access fees, but the fintech industry is already implying that they will object to this.  The proposal will be subject to a multi-month comment period after which the CFPB will revise and finalize it.  The conflict over access fees and potentially other parts of the rule will likely delay finalization into mid-next year.

Watch for these developments… We are watching for the reaction of the banking and fintech industry to the proposal, both in order to assess how compromise might be reached on issues such as access fees and bank liability.  If no clear path to compromise emerges on these issues, then once finalized, the rule will likely be subject to legal challenge and a subsequent delay in implementation.