The Financial Data Exchange (FDX) has been recognized as a standard setting body under the Consumer Financial Protection Bureau’s (CFPB) Personal Financial Data Rights rule.
The Personal Financial Data Rights rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.
An industry standard setting body can issue standards that companies can use to help them comply with the CFPB’s rule.
The order of recognition for Financial Data Exchange is the first to be issued under the rule. FDX is recognized as an industry standard-setting body for five years.
FDX is a standard-setting organization, operating in the United States and Canada, with over 200 member organizations. The member organizations include depository and non-depository commercial entities; data providers and data recipients; data aggregators; service providers to open banking participants; trade and industry organizations; and other non-commercial members, including consumer groups.
FDX’s primary purpose is to develop, improve and maintain a common, interoperable standard for secure consumer and business access to financial records.
The approval of FDX’s application was subject to several conditions, including:
• Ban on “pay-to-play” and other conflicts of interest: The approval order ensures that FDX will develop standards to promote open banking without regard to sponsorships or other financial incentives to give certain market players secret information or any other advantage. FDX needs to ensure that the organization and its staff do not have any side arrangements that skew its financial incentives toward particular players in the industry.
• Mandatory reporting on market adoption: The approval order would require FDX to report to the CFPB on market use of its consensus standards and/or maintain a publicly available resource where companies can disclose their use of standards as well as any certifications of adherence to standards.
• Transparency and availability of standards: The approval order requires FDX to make freely available to the public any consensus standards that it adopts and maintains, subject to reasonable safeguards, and to ensure that non-members have the same access as members do. FDX must also make publicly available information about its standards development and issuance processes.
The CFPB continues to evaluate other applications for recognition.