The Consumer Financial Protection Bureau today issued a partial final rule establishing the qualifications that organizations must meet to become recognized standard-setting bodies under the bureau’s proposed financial data-sharing regulation, which would implement Section 1033 of the Dodd-Frank Act. According to the bureau, standard-setting bodies must display openness, transparency, balanced decision making, consensus, and due process and appeals. Under the partial final rule, the public may have the opportunity to provide input on applications, as advocated by the American Bankers Association.
The CFPB is currently in the process of finalizing the remaining portions of its proposed rulemaking to address electronic access to financial data by consumers and their agents. As part of the upcoming implementation, the CFPB expects to allow companies to use technical standards developed by standard-setting organizations recognized by the bureau. “Today’s rule kicks off the process for standard-setting organizations to seek formal recognition,” the CFPB said.
The rule also includes a mechanism for the CFPB to revoke the recognition of standard setters and a maximum recognition duration of five years, after which recognized standard setters will have to apply for re-recognition, according to the bureau. It also contains a “step-by-step” guide on the process to receive CFPB recognition, including contingent recognition with feedback from the bureau on necessary changes. There are also provisions on how loss of recognized status will be treated, a situation flagged by ABA.
