CFPB's Open Banking Rule Aims to Enhance Payment Innovation and Data Security

The new rule mandates data sharing among financial institutions, aiming to increase competition and consumer control over financial data.

The Consumer Financial Protection Bureau's (CFPB) open banking rule requires banks to share consumer financial data with third parties, promoting competition and innovation in payment methods.
Critics argue the rule lacks clarity and imposes burdens on banks without adequately addressing security concerns, potentially complicating its implementation.
The rule grants consumers more control over their data, allowing them to know what data is collected and shared, and to revoke access at any time.
While the rule prohibits screen scraping, it mandates secure data sharing interfaces, which could limit the practice in many scenarios.
The regulation aims to enhance data privacy and security by applying existing standards from the Federal Trade Commission and prudential regulators.