CFPB Permits Financial Data Exchange to Set Open Banking Standards

The Consumer Financial Protection Bureau (CFPB) has recognized Financial Data Exchange (FDX) as a standard-setting body, allowing it to issue standards that companies can use to help them comply with the CFPB’s regulations.

According to a Wednesday (Jan. 8) news release, the CFPB is making this move under the Personal Financial Data Rights rule, which was first released in October. Per this rule, financial institutions, credit card issuers and other financial providers must unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free, according to the release.

“Today’s order recognizes FDX as an industry standard-setting body for five years,” the CFPB wrote in the release. “The CFPB continues to evaluate other applications for recognition.”

The release noted that the FDX is a standard-setting organization, operating in the U.S. and Canada. It has over 200 member organizations, including 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.

Also on Wednesday, PYMNTS reported that the CFPB sued Experian, alleging that the consumer reporting agency had unlawfully failed to properly investigate consumer disputes and included incorrect information on credit reports.

The bureau said that in allegedly doing so, the company had violated the Fair Credit Reporting Act and the Consumer Financial Protection Act, according to the report.

“When consumers disputed errors on their credit reports, Experian conducted sham investigations rather than properly reviewing the disputes as required by federal law,” CFPB Director Rohit Chopra said in the release.

In an emailed statement to PYMNTS, Experian said the suit was meritless and that it planned to defend its legal position.

“We take our commitment to meeting the needs of consumers and adhering to all our regulatory obligations seriously,” the statement said. “We take great steps to ensure we investigate every consumer dispute thoroughly and go above and beyond the requirements of the law. We take strong exception to the substance and the tone of the CFPB’s accusations.”