CFPB to “hover” as open banking evolves

The Consumer Financial Protection Bureau is on track to issue its proposal on open banking by October, the agency’s director, Rohit Chopra, told the House Financial Services Committee June 21. 

That matches a timetable the White House’s Office of Management and Budget released June 20 — a day after Chopra published a post making clear that dominant companies will not have leeway to dictate the terms of open banking. 

The rule won’t be finalized until next year, but the CFPB will ask for public comment.  

Chopra said in October the CFPB intends to create a policy that will allow consumers to transfer their account histories to a new bank or credit card company. That means they won’t have to start from scratch with a new record of their financial history, which may come in handy for taxes, disputes with merchants, or insurers. 

Chopra warned that “the agency must not micromanage,” but he expects the CFPB to “hover” as banking evolves. 

“While the CFPB intends for the market to play a significant role in developing and maintaining open banking standards, it will pay close attention to any attempts to limit consumers’ exercise of their data rights, particularly where such attempts proceed from coordinated efforts by dominant firms,” Chopra said. 

Many of the details in open banking will be handled through standard-setting outside of the agency, Chopra said.  

In his comments to the House panel, Chopra said he “want[s] to make sure that standards are giving the ability for consumers and all market participants … to switch.”  

The CFPB’s approach to open banking elicited some early support from the corporate world.