Eric Lapin

Open banking coming to digital wallets? https://lnkd.in/e2aFawgd The Consumer Financial Protection Bureau (CFPB) swung for the fences today, issuing the final version of Rule 1033 on personal financial data rights. The scope is much wider than anticipated—covering not just bank accounts, but also data in payment apps and digital wallets. As the CFPB notes, digital wallets now play a key role in our financial lives, managing payments from credit cards, prepaid accounts, and checking accounts all in one place. This means Rule 1033 applies broadly to digital wallets and payment apps that facilitate payments from covered accounts, even when they involve pass-through payments from other institutions. Why does this matter? Because it opens up financial data for AI to analyze and learn from consumer spending patterns—helping people make smarter financial decisions. The inclusion of digital wallets is a game changer, reflecting how many of us actually manage their finances today. Some say this data is available today and the regulation is unnecessary - and it is through providers like Plaid and others, but at a cost. The digital wallets are mostly closed today, with little or no access to the data they have. #CFPB #Rule1033 #DigitalWallets #FinancialData #AI #ConsumerRights #Fintech #PersonalFinance #DataRights #openbanking #smartoffers #dfinitiv

6

1 Comment

🚦Big mortgage tech news: ICE Mortgage Technology is sunsetting legacy Encompass integrations. In an email sent to vendors and lenders on Tuesday, the mortgage tech giant said Encompass SDK (Software Development Kit) with its gazillions of plug-ins would sunset on October 31, 2025. Everybody's gonna have to migrate over to Encompass Partner Connect, ICE's more modern cloud-based API platform. Overall, I think this is likely to be well received by many lenders, who will see faster speeds, improved security and smoother integration with vendors on the newer platform. As for the vendors (and a not insignificant number of lenders), well, that's a bit more complicated. If the lender or solutions provider has already made the switch or is native to the API-based platform, they're in good shape. But tons of vendors and lenders have 15-year-old custom code that is not going to work on Encompass EPC. They'll need to invest significant resources to redo their code and make the jump. For vendors that means they likely won't be able to deliver the same level of service and handle lender requests, putting them at a competitive disadvantage, Matthew VanFossen, CMB told me in an interview. Newsflash: Programmers aren't cheap, and the new code might need to be in a new language to work on the more modern platform. Sounds messy! In the end, a lot of lenders in the coming months are going to be assessing their tech stacks and asking vendors if they have any SDK. It could be a big factor when contracts are being renegotiated.

108

43 Comments

For those of us waiting for the release of 1033, it appears we have some insight over what will be included. While the Consumer Financial Protection Bureau (CFPB) plans to release its final open banking rule today, details were provided in advance to American Banker. Here's a summary: The CFPB is releasing its final open banking rule, expanding its scope to include payment apps and other financial products. The rule, named after Section 1033 of Dodd-Frank, requires banks to safely share financial data on various accounts and products, including Apple Pay, Google Pay, PayPal, Zelle, and Venmo. It aims to increase competition, enhance consumer choice, and establish strong data security and privacy standards. Key aspects of the rule include prohibiting data harvesting, allowing some secondary uses of consumer-authorized data, and extending the compliance period for large banks to April 1, 2026. The CFPB emphasizes that consumers have the right to know what data is collected, where it's stored, with whom it's shared, and to revoke access at any time. The rule is expected to encourage the adoption of secure APIs and potentially reshape how consumers use their personal financial data. My thoughts: This final open banking rule will likely significantly impact banks by requiring them to safely share a broader range of financial data, including payment app information, with third parties. While this may increase competition and consumer choice, it also presents challenges for banks in terms of data security, potential liability for third-party breaches, and the need to implement costly oversight measures for Fintech companies accessing consumer data. If banks are to stay ahead of the curve, banks should focus on partnering with those Fintechs that have robust API infrastructures while enhancing their data security measures. Additionally, banks could consider partnering with Fintech companies to create innovative products and services that leverage open banking capabilities, potentially turning this regulatory challenge into a competitive advantage. #banking #1033 #CFPB #bankingindustry #payments #creditunions #fintech #financialistitutions

4

1 Comment

No - thats not how a legal interpretation of 1033 reads - it reads that you have to give the information to the member/consumer. Doesn't the member already own the data in a credit union? Opening up APIs to every and all fintechs is not just going to lead to mergers... its going to lead to the largest data breaches in HISTORY. We have to think differently - and to do that we can look to the past.... Just like Amazon and Google weren't built on Web1 Bulletin Board Systems... the financial institutions of the future wont be built on Web2 API technology. In the words of Steve Jobs. Think Differently. Thats all it takes.

14

"Now, FusionIQ is bidding to integrate wealth management into the increasingly popular payment method. FIQ Wallet lets users invest their earnings directly from their payment wallets without the need to transfer funds to traditional bank accounts, reducing fees and simplifying the process. By keeping money within the wallet and allowing it to grow through investments, FIQ Wallet increases the “stickiness” of digital wallets, leading to higher user engagement." Excellent coverage of our FIQ Wallet launch in Finextra. If you're looking to expand your wallet services to increase user engagement and adoption, let's talk about how FIQ Wallet can seamlessly integrate sophisticated wealth management capabilities, including goals-based digital advice and self-directed investing directly into your wallet. You can learn more about FIQ Wallet here: https://lnkd.in/gAp7bF-B Read the full analysis of FIQ Wallet by the Finextra editorial team here: https://lnkd.in/dS7RhNf5 #digitalwallets #wealthtech #payments #digitalleadership #fintech

13

8 Comments

Consumer Financial Protection Bureau (CFPB) subjecting large payment apps to the same supervision and regulation as banks, what specific areas will the CFPB monitor, and how might payment apps respond to these new regulations? Areas the CFPB Will Monitor: Privacy and Surveillance: The CFPB will ensure that large payment apps comply with regulations  regarding data collection and sharing. Consumers must be able to opt-out of certain data practices and be informed about how their data is used. Errors and Fraud: The CFPB will monitor how payment apps handle transaction disputes and fraud. Apps must manage disputes internally rather than shifting them to banks or credit card companies. Debanking: The CFPB will oversee how payment apps handle account closures and freezes. Ensuring that consumers do not face unexpected disruptions in their ability to make or receive payments is a priority. How Payment Apps Might Respond: Compliance Enhancements: Payment apps will have to pul their socks and invest in improving their compliance frameworks to meet the new regulatory requirements. This includes better data privacy measures, robust fraud detection systems, and efficient dispute resolution processes. Operational Adjustments: Companies may need to adjust their operational procedures to handle disputes internally and avoid relying on external financial institutions. This could involve upgrading their customer service capabilities and dispute management systems. Lobbying and Legal Challenges: Big Tech companies might lobby against the new regulations, arguing that they are overly burdensome or unnecessary. Legal challenges could also arise, potentially delaying the implementation of the rules. In my opinion this approach can be implemented by the regional and local regulatory bodies such as #Central #banks The regional  and local regulators could adapt similar regulatory measures to oversee large payment apps in the region. Establishing a Regulatory Framework: Developing a comprehensive regulatory framework specifically for payment apps. Defining clear guidelines and standards for data security, consumer protection, and compliance. Creating a Dedicated Oversight Body: Establishing a dedicated department within the governing body to monitor and regulate payment apps. Implementing Compliance Requirements: Requiring payment apps to adhere to AML, KYC, and other financial regulations. Mandating regular audits and reporting to ensure compliance. Promoting Transparency and Consumer Rights: Ensuring payment apps provide transparent information to consumers about their services. Protecting consumer rights by enforcing fair practices and efficient dispute resolution mechanisms. By adopting these measures, the local regulator can ensure that payment apps operate in a secure, transparent, and consumer-friendly manner, similar to the objectives of the CFPB. #CFPB Central Bank of Oman Mala'a #payments #privacy #Surveillance #Debanking #Compliance

24

1 Comment

Fair lending is very important to the lenders we speak with Conductiv. Key to this is "explainability". The ability for a lender to simply and clearly explain how the data and AI they use in lending supports equity in lending. Conductiv offers a straightforward approach to this and is delighted to be working with lenders of all kinds to help support fair lending, #deeplending, and #equityinlending. #finance #lending #tech

10

We are super excited to announce a beta release of our new ACH fraud model built specifically for the unique needs of software platforms ⚡ It automatically scores incoming ACH charges via Stripe Connect for their likelihood of return, empowering software platforms to reduce fraud losses and lower unauthorized ACH return rates. 🙌 ACH continues to be a popular method of payment 💸 especially for large ticket transactions such as contractor/construction payments. However, over 30% of businesses have experienced fraud when accepting ACH payments even though it's cheaper to accept. 😮 "Friendly fraud" in ACH continues to be a huge issue for platforms and merchants on Stripe Connect. While ACH is popular among merchants given it's lower cost, platforms struggle with the economics of ACH especially when fraud threatens to take away a huge portion of their revenue 🤔 Our new ACH fraud model is setup to automatically score the ACH charges for our platform customers on Stripe and vet potentially high risk transactions with an additional review in our Fuzio platform. 🤝 With the early success of this model, we are excited to open up the beta for other platforms 🎯 For more, read the announcement in the comments section 👇

20

1 Comment

Today, we urged the Consumer Financial Protection Bureau to withdraw its larger participant rule for digital #payments. It’s not clear what problem this rule is solving. Payment companies are well-regulated at the state and federal levels, and consumers are having positive experiences with them. In fact, fintech apps rank among the most popular financial brands. According to the CFPB’s annual complaints database, out of 1.3 million complaints last year, only 1% were regarding money transfer and payment services—a category that experienced one of the lowest complaints growth year over year. The final rule is deeply flawed, failing to define a market or identify specific risks to consumers and conflating diverse uses and products into a one-size-fits-all approach. It will lead to less competition, fewer services, and higher prices. Instead of layering regulation simply for the sake of regulation, we should follow the lead of other major economies and work to integrate leading payment companies into the national payment infrastructure. Learn more ➡ https://lnkd.in/eD2xi6md

11

1 Comment

Digital Innovation Drives Loan Quality Kevin Kauffman, SVP and Head of Single-Family Seller Engagement at Freddie Mac, notes: "The common thread among best-in-class lenders for reducing loan origination costs is leveraging digital capabilities." Despite market-related challenges, many tech-forward lending institutions continue to increase their technological investments to stay competitive. This shift acknowledges the benefits of mortgage process optimization. Executives across the industry emphasize a significant push towards digitalization and technology adoption.

2

1 Comment

We’ve reached a critical point in the #privatestudentloan space. Large lenders are exiting the industry, product innovation has slowed, and schools and students have fewer options than ever. But the cost of college continues to rise, and financial aid and other means of paying for college are not always enough. With our deep industry knowledge and expertise, collaborative and flexible approach, and data-driven insights, Monogram has set out to close this gap and change the dynamic of the traditional private student loan. Here’s how: https://lnkd.in/eumbptr4

24

New trends are constantly developing in the#FinTech space. With new developments brings more QA requirements... take a look at this article to see if you are ahead of the curve and how you can incorporate these trends into your business... #qa #fintech #finance #qualityassurance #quality #developments https://lnkd.in/ewWauq8z

1

How should lenders think about AI today? Join Rick Roque, Suha Zehl, CMB®, AMP, CCP, CPM, Paul Gigliotti, David Kawata and Eric Prue as they discuss what lenders will be able to expect from AI in the short-term, middle and long term - and how exactly you can utilize and implement these technologies. Don't get left behind! September 13th at 10:00 - join the discussion! https://lnkd.in/eRUyYQ5U

13

1 Comment

ICYMI: Vice Capital Markets has integrated the Fannie Mae® Mission Score API into our trading portal, allowing current clients to take advantage of pricing and best execution decisions to improve gain-on-sale. Read more about it here: https://lnkd.in/dZTMre3a #mortgage #capitalmarkets #hedgeadvisory #hedging #secondarymarket #affordablelending

15

1 Comment

🚨 Big Tech under the microscope @The Consumer Financial Protection Bureau (CFPB) is now supervising major payment platforms like #ApplePay, Google Pay, and PayPal – targeting those handling 50M+ transactions annually. 💬 CFPB Director Rohit Chopra calls it a necessity in today’s evolving landscape, stating: “Digital payments have gone from novelty to necessity, and our oversight must reflect this reality.” ✅ What’s changing? Platforms face the same scrutiny as #banks. Focus on #privacy, #fraud prevention, and consumer #protection. 🤔 The debate: Banks support levelling the playing field. #Fintech leaders warn of less competition and higher costs. With 13B+ transactions processed annually by these apps, the stakes couldn’t be higher. Will #regulation safeguard users or stifle #innovation? 👉 Read more on #Bobsguide: https://lnkd.in/eD3b9gQw #DigitalPayments #FintechNews #BigTech #FinancialRegulation

1

How will mortgage lenders, vendors and LOs be affected by ICE Mortgage Technology sunsetting its legacy SDK technology in favor of its more modern API-based data architecture? ICE Mortgage Technology's President Tim Bowler and SVP of Engineering Troy Tomas joined me on a podcast late last week to answer questions about the transition. Give it a listen. I will also have a more detailed follow-up story next week, which will focus on workflow changes, latency (speed), costs for lenders/vendors & much more. https://lnkd.in/eGbcjcyG

18

3 Comments