WASHINGTON—A long-awaited U.S. "open banking" rule that could dramatically boost consumer finance competition and increase Americans' access to financial services is being held up by privacy concerns, according to five people with knowledge of the matter, Reuters reported.
The Consumer Financial Protection Bureau rule would allow consumers to easily share their financial data with third-parties. The move would remove a key obstacle to switching service providers that might offer lower fees, Reuters reported.
The White House in July 2021 urged the CFPB to get moving on an open banking rule as part of a broader competition push, while fintech companies and lawmakers are also pressing the agency to hurry up, two sources told Reuters.
Such advocates say open banking will make it easier for non-banks like technology companies to compete with traditional financial institutions, lowering costs and boosting millions of Americans' access to financial services, Reuters stated.
‘Grappling’ With Issue
“But the CFPB is grappling with how to handle consumer privacy and data protection issues created by the rule, the five sources said over the past month on condition of anonymity to discuss the nonpublic process,” Reuters said.
Reuters further reported that CFPB Director Rohit Chopra's concerns focus in part on how Big Tech companies may use the data, given criticism that these companies have a record of exploiting personal consumer data to entrench their services.
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