Industry Win: Judge blocks CFPB open banking rule while new rulemaking is pursued

“Credit unions across the country are grateful for the U.S District Court’s decision to block the 1033 rule while new rulemaking is underway, providing clarity to those struggling with compliance uncertainty. The rule as currently written places excessive burdens, unfair risk allocation, potential market distortion, and risk management issues on the plates of credit unions who are already overburdened by other regulatory requirements. We are encouraged by the court’s decision as well as the CFPB’s willingness to remedy the flawed PFDR rule and await new guidance once released.” - America’s Credit Unions Director of Innovation and Technology Andrew Morris

America’s Credit Unions previous outlined concerns with the Bureau’s current personal financial data rights (PFDR) rule due to its burdensome, inequitable, and risky implementation. In response to an advanced notice of proposed rulemaking seeking feedback on revisions to its PFDR rule, the organization outlined several recommendations to alleviate the regulatory burden:

• Allow reasonable fees for third-party data access;
• Remove overly granular application programming interface specifications;
• Limit categories of covered data;
• Establish of a clear allocation of liability to third parties who mishandle covered data or abuse their consumers’ trust;
• Adopt safe harbors for data providers relying on third-party security representations;
• Establish centralized accreditation and whitelisting of third parties by the CFPB;
• Extend implementation deadlines, specifically for smaller credit unions.