CFPB approves Financial Data Exchange to issue open banking standards

The CFPB has announced its recognition of Financial Data Exchange, Inc. (FDX) as a standard-setting body under the CFPB’s Personal Financial Data Rights rule. The order of recognition is the first to be issued under the rule. The Personal Financial Data Rights rule, which was released in October 2024, 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. The CFPB established a formal application process outlining the qualifications to become a recognized industry standard setting body, which can issue standards that companies can use to help them comply with the CFPB’s rule.

The CFPB's order of recognition, valid for five years, includes conditions, such as:

• A ban on "pay-to-play" and other conflicts of interest
• Mandatory reporting on market adoption
• Transparency and availability of standards

The CFPB also issued updated procedures for how companies can request special regulatory treatment, such as a no-action letter. The procedures seek to increase transparency and reduce favoritism for individual companies.

• Updated Policy Statement on No-Action Letters
• Updated Policy Statement on Compliance Assistance Sandbox Approvals