Rachel Kiernan’s Post

The CFPB's Open Banking proposal is facing debate on issues like banks' ability to charge fees and control data access shared with fintechs. Banks advocate for the option to charge fees to fintechs for accessing customer data to recover costs, while fintechs argue that such fees would impede customer data accessibility. The proposal, aligned with Section 1033 of the Dodd-Frank Act, enables consumers to share financial data with third-party apps without banks imposing fees. Industry groups, including the American Bankers Association, have raised concerns about fees, risk management, and restrictions on secondary data use. The CFPB is currently reviewing stakeholder comments as it progresses towards finalizing the rule in 2024. #OpenBanking #CFPB #FinancialRegulation

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), proposed an open banking rule to empower small banks and fintechs to compete with larger institutions by giving consumers control over their financial data. The rule, known as the 1033 rule, aims to lower switching costs for consumers and foster competition by enabling them to share their data with other financial institutions. However, PNC CEO Bill Demchak argued that the rule could harm small banks, as larger ones with better technology would attract customers. Experts are divided on the potential impact. While some believe the rule could level the playing field, others, like David Silberman, argue that consumer loyalty and the friction of switching accounts may limit its effect. Meanwhile, small banks see both opportunities and risks, particularly around the costs of compliance. Ultimately, those with the best customer experience and technology, regardless of size, are expected to thrive. I would love to hear your thoughts. #banking #bankingindustry #doddfrank #openbanking #financialindustry #1033 https://lnkd.in/gN9dxU3K

Interesting angle by Vast Bank's Chris Lewis in American Banker on the CFPB's new open banking regulation. He argues the new rules will "kill community banks with kindness" by exempting banks with assets less than $850 million from compliance. It's a reversal of the the classic libertarian argument: Regulation tends to erect barriers to free competition by creating high compliance costs, forcing smaller companies to leave the market. The CFPB seems to subscribe to this argument by exempting smaller banks from the technology costs of their version of OB. Lewis contrarily thinks not compelling smaller banks relegates them to the "sidelines of innovation." And suggests incentives / subsidies to help them make the technological leap towards OB. Which makes me wonder how not forcing, but also not preventing (!), smaller banks to invest in open banking, can be said to actively kill them. I agree with his diagnosis that any bank disregarding OB will likely become uncompetitive mid-term. Shouldn't that be enough motivation to move? Giving small banks the freedom to perhaps build a more nimble OB stack with minimal compliance costs seems to me regulatory best practice to ensure a competitive banking system. #openbanking #cfpb #section1033

🌊 🌊🌊🌊 USBanking Unleashed: Pay by Bank’s US Surge 🌊 🌊🌊 The US financial sector is on the cusp of a significant transformation. Open banking is paving the way for innovative payment solutions, with Pay by Bank at the forefront. As we move towards a more connected financial ecosystem, let's explore the potential impact of this shift. 🌊 🌊 Open banking is revolutionizing finance, offering **secure transaction access** and fostering new services. #OpenBanking #FinancialRevolution 🌊 🌊 Pay by Bank is gaining traction, promising **real-time payments** and challenging traditional methods. #PayByBank #PaymentEvolution 🌊 🌊 The US is catching up with global trends, as major banks and merchants start to recognize open banking's benefits. #BankingTrends #FintechInnovation 🌊 🌊 Regulatory support is on the horizon, with the CFPB set to enforce uniform bank data access by 2025. #RegulatorySupport #CPFB This evolution in banking is not just about technology; it's about shaping a future where financial control and freedom are in the hands of the consumer. As we anticipate regulatory changes, the industry's landscape is poised for a remarkable shift. The tide is indeed turning, and it's an exciting time to be part of this financial renaissance. 🌊 🌊 🌊 🌊 🌊 🌊 🌊 🌊 🌊 🌊 #OpenBanking #FinancialDemocratization #InnovativePayments #ConsumerEmpowerment #FintechFuture https://lnkd.in/gRzXkewe

📢 Big news from the CFPB today 📢 The US will join the UK and Europe in rolling out Open Banking, with new rules announced this week by the Consumer Financial Protection Bureau (CFPB). The long-awaited move will make it easier for consumers to switch between financial services providers, with new regulations governing data sharing between fintechs and traditional banks, according to Stephen Williams, Qorbis CEO. "These new regulations place consumers at the center of financial services. Open banking gives users control over their data, delivering greater security and privacy protection. We're excited to see these changes result in a better banking experience for American citizens, with access to more competitive rates and a wider range of financial products and services." https://lnkd.in/d89zvSWc #openbanking #americanbanking #banking #cfpb

The American Fintech Council has addressed the CFPB's Open Banking proposal, expressing both appreciation for their efforts and concerns about several aspects. The AFC highlighted issues such as the rulemaking's scope and coverage, limitations on data providers and third parties, the framework for recognizing industry standards, and reauthorization requirements. Emphasizing their commitment to consumers' rights, the AFC's letter included specific recommendations to enhance the initiative and tackle the identified issues. #OpenBanking #FintechRegulation #ConsumerRights

The Consumer Financial Protection Bureau has announced its much-anticipated plans to shepherd the adoption of open banking in the United States. Third-party financial companies are the driving force behind the open-banking model. However, regulators, including the CFPB, have expressed ongoing concerns about the growing dependence on fintech companies that aren’t required to comply with conventional banking regulations. Read more: https://ow.ly/ug5q50TSQ41 #CFPB #payments #openbanking #regulations #instantpayments

We published this blog in 2022, hoping change was just around the corner. It feels like the industry has been in complete stasis since then, largely due to a lack of progress from regulators (despite creation of a Joint Regulatory Oversight Committee). Thankfully, today Open Banking has FINALLY kicked of a full project on VRP - funded equally by banks and TPPs. The only blocker now is clarity from regulators - and a long overdue response from the Payment Systems Regulator to its December 2023 consultation on expanding variable recurring payments. #progress #openbanking #VRP

The concept of Open Banking in the U.S. has gradually evolved, shifting from a voluntary framework to a regulatory mandate, following in the footsteps of the EU and UK where similar standards have been required for years. It will be interesting to see how Open Banking continues to develop in the U.S. and whether it will align more closely with European frameworks in the future. https://lnkd.in/g4YzJ7dG #fintech #apis #USA #CFPB