The US Consumer Financial Protection Bureau (CFPB) has recognised Financial Data Exchange (FDX) as the first Open Banking standard setting body in the country.

FDX says that its primary purpose is to develop, improve and maintain a common and interoperable standard for secure consumer and business access to financial records.

The move, which recognises the organisation as an industry standard setting body for five years, comes after the Bureau released its Personal Financial Data Rights rule in October 2024.

The new rule 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.

The CFPB also established a formal application process outlining the qualifications to become a recognised industry standard setting body, which can issue standards that companies can use to help them comply with the new rule.

In June 2024, it finalised a rule outlining the qualifications to become a recognised industry standard setting body: openness, transparency, balanced decision-making, consensus, and due process and appeals.

FDX, which operates in both the US and Canada, has more than 200 member organisations, which include 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, like consumer groups.

The Bureau received the application for recognition from the organisation in September 2024.

It has approved the application subject to several conditions, which include a ban on “pay-to-play” and other conflicts of interest.

The CFPB said that the approval order ensures 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.

"FDX would need to ensure that the organisation and its staff do not have any side arrangements that skew its financial incentives toward particular players in the industry," continued the independent government agency.

The order also requires FDX to report on market use of its consensus standards and/or 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.

Additionally, FDX must also make any consensus standards that it adopts freely available to the public.

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