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Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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CFPB Recognizes FDX as U.S. Open Banking Standards Leader
Open Banking | Jan 9, 2025
Image: Freepik
FDX Earns CFPB Approval to Establish Secure Open Banking Standards in the U.S.
The Consumer Financial Protection Bureau (CFPB) has officially recognized the Financial Data Exchange (FDX) as a standard-setting body for open banking in the United States. This allows FDX to develop and maintain American standards for customers to securely share their financial data with authorized third parties. This data sharing aims to bolster competition and innovation in financial services by furnishing consumers with more choices and better control over their financial data.
CFPB's Personal Financial Data Rights Rule
In October 2024, the CFPB introduced the Personal Financial Data Rights rule that requires financial institutions to give consumers FREE access to their personal financial data along with the ability to transfer it to other (third party) providers upon request. To advance this initiative, the CFPB regulator setup a process to recognize standard-setting bodies that can create guidelines for secure and efficient data sharing. FDX is the first recognized standard-setting body under this new rule.
FDX's Role and Conditions
FDX is a non-profit operating in the U.S. and Canada with over 200 members including banks, fintech companies, data aggregators, and consumer groups. Its core mission is to develop a common, interoperable standard for secure consumer and business access to financial data records.
See: Canada’s Open Banking Journey: Interview with Steve Boms, Executive Director Financial Data and Technology Association – North America “FDATA”
The CFPB's recognition of FDX as a standard-setting body is valid for 5 years with the following conditions:
- FDX must avoid deals that give unfair advantages to certain companies to ensure standards are created without bias.
- FDX must track and share updates on how its standards are being used and provide public tools for companies to show they follow the rules.
- FDX must make its standards available to everyone for free with equal access including members and non-members.
Industry Perspectives
The recognition of FDX has garnered support from various industry stakeholders including the American Bankers Association who noted that FDXs API data format is already used to connect over 94 million consumer accounts and is available at no cost for parties that sign the FDX API License Agreement.
See: Open Banking in Canada Delayed to 2026, Favours Banks Over Innovation
Kevin Feltes, FDX CEO:
“This recognition provides helpful clarity to the market at a critical time. Many firms are running fast to come into compliance with the CFPB’s recent Open Banking regulation and give customers more control over their financial data. The recognition underscores FDX’s position as a leading forum for companies and nonprofits from across the financial ecosystem to collaborate on interoperable methods for secure, consumer-permissioned data sharing,”
Outlook
FDX's recognition opens the doors for fintech innovation and more choice and better services for consumers, and increased collaboration across the financial sector. The result? Consumers gain greater control, businesses unlock innovation, and the industry moves toward a more interconnected future.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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