Last week, the Consumer Financial Protection Bureau (CFPB) issued proposed rules implementing Section 1033 of the Dodd-Frank Act. In the words of the bureau, the rules are intended to “jumpstart competition and accelerate the shift to open banking.”
“With the right consumer protections in place, a shift toward open and decentralized banking can supercharge competition, improve financial products and services, and discourage junk fees,” said CFPB Director Rohit Chopra. “We are proposing a rule to give consumers the power to walk away from bad service and choose financial institutions that offer the best products and prices.”
The rules provide a framework for customers to make “more portable” their financial data to access better customer service, pricing and other benefits.
“There is a certain amount of irony in the bureau touting the 1033 rules as a move towards decentralized banking,” said IBAT President and CEO Christopher Williston. “The American banking system is the most decentralized in the world because of local community banking. Almost every action in the history of the bureau has undermined this decentralization and encouraged more consolidation, resulting in fewer banks, further away from consumers.”
With the rules having just been issued at the end of last week, the IBAT team is actively reviewing them now. IBAT will provide members with an update containing suggestions for comment letters well before the comment deadline.