The American Fintech Council (AFC), the industry association representing both responsible fintech companies and innovative banks, has filed an amicus brief in favour of the new rule introduced by the Consumer Financial Protection Bureau (CFPB) in the Forcht Bank, N.A. et. al. v. Consumer Financial Protection Bureau, et. al. case.
In October 2024, CFPB finalised its rule on the open banking ecosystem, which was intended to strengthen data security and improve competition in the market by making it simple for consumers to switch providers. However, a coalition of financial institutions, led by the Bank Policy Institute, the Kentucky Bankers Association, and Forcht Bank, believed the new rule put consumers’ data at risk and sued the CFPB.
Nine months later, the AFC has now gotten involved in the case, supporting the recently filed motion for summary judgement by the Financial Technology Association, an intervenor in the case that is now defending the rule in court as it looks to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy.
In the brief, AFC urges the court to affirm the rule’s interpretation of the term ‘consumer’ to include certain authorised third parties, allowing them to access financial data with clear consumer permission. AFC also supports the final rule’s clarity around data security and third-party risk management, as well as its allowance for the development of consensus-based technical standards. AFC further argues that the decision not to create new liability rules, and to not directly supervise all third parties, was a reasonable, pragmatic approach within the CFPB’s legal authority.
In addition, AFC offers a distinct middle-ground perspective, providing valuable insight for the court in evaluating the competing motions for summary judgment. AFC represents a diverse group of smaller banks, credit unions, and fintech companies that support open banking innovation and rely on fintech partnerships to compete. This composition allows AFC to present a different view on the CFPB’s rules, reflecting the practical realities faced by smaller financial institutions and responsible fintech companies seeking to innovate and compete in the financial services marketplace.
“AFC brings a unique perspective to this case and the issues raised by the parties that would benefit the court in construing the competing Motions for Summary Judgment pending before it,” wrote AFC in their brief.
Creating a safe way to access financial data
“The CFPB’s open banking rule is a meaningful step forward that empowers consumers and enables innovation,” said Phil Goldfeder, CEO of the American Fintech Council. “Although we still have concern with certain provisions, the rule ensures that consumers have safe, reliable access to their financial data while providing clear expectations for financial institutions and third-party providers. Upholding it is critical for the continued evolution of secure, competitive, and inclusive financial services.”
“The open banking rule offers clear guidance without overreach,” said Ian P. Moloney, SVP and head of policy and regulatory affairs at AFC. “Consumers deserve tools that help them manage their financial lives, and responsible fintech companies deserve regulatory certainty. This rule delivers both, and we’re proud to support it.”
