CFPB to Announce Major Open Banking Proposed Rule

Consumer Financial Protection Bureau (CFPB) to Release Major New Proposed Rule on Thursday October 19

Cequence’s contacts in Washington D.C. indicate that the Consumer Financial Protection Bureau (CFPB) will publish their major rule on Dodd-Frank Section 1033 (Open Banking / Open Finance) Thursday, October 19, 2023. The rule is expected to be a key milestone in Open Banking / Open Finance to the U.S. clarifying requirements around API-based access to data. Many banks and other regulated entities have been waiting for this rule before investing heavily in their API security strategy. This rule is expected to resolve much of this uncertainty, enabling organizations to start safely pursuing their API strategy in earnest. The CFPB is just the latest to comment on the topic of APIs; the U.S. Treasury (2018) and the FFIEC (2021) both released guidance related to APIs and acknowledged their importance in secure data sharing.

Our intelligence projects the following timeline:

• Q4 2023 release of Proposed Rule Making and open comment period.
• Q1 2024 comment period closes.
• Q2 2024 release Final Rule. Implementation Period begins.
• TBD 2025 Enforcement Period begins.

As the foundation of inter-organizational financial communications, API security is critical. The new CFPB guidance on Dodd-Frank Section 1033 will bring about an Open Finance API building boom, and participating organizations must consider best practices in API architecture and security up front. Financial services organizations are 300 times as likely as other companies to be targeted by a cyberattack,¹ and cybercrime costs these organizations 42% more than other vertical markets.² Due to their desirable assets, financial organizations experience attacks at a high rate that can lead to theft of funds or sensitive data. Learn more about API protection at financial institutions.

Read our analysis of the rule and check out our webinar with open banking expert Don Cardinal to learn more about the CFPB rule, why it matters, and the action items and deadlines you need to know to prepare your business.