CFPB recognises FDX as standards-setting body under new US Open Banking rule

Financial Data Exchange (FDX) has been officially recognised as a standard-setting body in the US by the Consumer Financial Protection Bureau (CFPB) under its Personal Financial Data Rights rule.

The CFPB issued an order yesterday (8 January) that recognises FDX as an industry standard-setting body for five years – the first to be issued under the new rule.

FDX is a standard-setting organisation, operating in the US and Canada and has more than 200 member organisations, including depository and non-depository commercial entities, data providers and data recipients, data aggregators, service providers to Open Banking participants, trade and industry organisations, and other non-commercial members, including consumer groups.

“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,” said Kevin Feltes, chief executive officer of FDX.

“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.”

FDX applied to be recognised as a standard-setting body in September 2024, after the CFPB established a formal application process outlining the qualifications required to become an official body responsible for issuing standards that companies can use to help them comply with the CFPB’s rule.

The CFPB published the application from FDX for public comment later that same month.

FDX’s application has been approved by the CFPB subject to a number of conditions, the first of which is a ban on “pay-to-play” and other conflicts of interest, ensuring 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”.

This includes ensuring that its employees do not have any “side arrangements” that “skew its financial incentives towards particular players in the industry”, the CFPB said.

The approval order also requires FDX to report to the CFPB on market use of its consensus standards and to potentially maintain a publicly-available resource “where companies can disclose their use of standards as well as any certifications of adherence to standards, for the benefit of Open Banking participants, regulators, and the public”.

Finally, FDX will be expected 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.

Franklin Garrigues (TD Bank), co-chair of the FDX board of directors, said: “Since its founding, FDX has incorporated input from many diverse parties into our consensus-driven process for defining standards.

“We remain deeply committed to being open, transparent, and balanced in alignment with the conditions the CFPB has described. And, we’re eager to continue welcoming new voices to the table.”

“This recognition is a key milestone that FDX has been working toward in our ongoing journey to promote reliable, safe data sharing as the Open Finance ecosystem continues to grow,” added Jane Barratt (MX), co-chair of the FDX board.

In addition to the order, the CFPB released updated procedures for how companies can request special regulatory treatment, such as through “no-action letters”.

The revised procedures are intended to increase transparency and reduce favouritism for individual companies.

The Personal Financial Data Rights rule was finalised by the CFPB in October last year, and 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.

Financial firms will have to comply based on their size, with the largest institutions given a compliance deadline of April 1, 2026.

Further reading: Open Banking in the US – a new era of consumer-centric innovations?