Last week, the Consumer Financial Protection Bureau (CFPB) received dozens of comments on a proposed rule that could give consumers more control over their financial data. This rulemaking on open banking presents a rare opportunity for bi-partisan agreement, and may determine the pace of innovation for the financial services industry.
The term open banking describes the technology and services that enable consumers to share their financial data across institutions. If you send money using Venmo, use Acorns to automatically save money, obtain a mortgage through Rocket Mortgage, or manage your retirement savings through Wealthfront, you are using open banking technology in the background. In fact, virtually all of today’s most popular financial applications rely on open banking technology, and many traditional financial services do, too, from Charles Schwab to Fannie Mae.
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