Interviewer: Well, at this event, one of the most critical debates is who controls your financial data and who gets paid when it moves. Well, the CFPB is currently rewriting its landmark section 1033 open banking rule after a court injunction leaving banks then tax and consumers in regulatory limbo. Well joining me this morning to break down the stakes is Steve Baum's executive director of FDatta, the trade association, advocating for consumer permission data access. Good morning. Great to have you here. Thank you so much for joining me today.
Steve: Thanks for having me.
Interviewer: Well, here we are in Las Vegas for Money 2020 USA. So first of all, when it comes to 1033 for the viewers out there who may not be familiar, can you walk us through what's happening right now?
Steve: Sure. So no matter what third party app, tool, product, service you use, crypto, uh, personal financial management tool, pay by bank, it relies on your ability to access data held somewhere else, usually, but not always at a financial institution. The CFPB was given the authority by Congress back in 2010 to write a regulation that said that data belongs to you, it's yours, you can share it. The Biden era CFPB finalized a rule that would have said that's your data for free. It has to move through secure channels. And as you mentioned, Remy, there was a court injunction in Kentucky last year that blocked that rule. And so the CFPB is now kind of rethinking all of this, and in the midst of that, the industry is trying to figure out how to work around that lack of regulatory clarity.
Interviewer: And of course, we're all concerned about consumer protection as well as data, but one of the fiercest fights is over data access fees. So can you explain what's happening with fees?
Steve: Sure, so the, the original language of the Dodd-Frank Act said at the consumer's request, the CFPB originally interpreted that to say no fees, and fees were prohibited. With that injunction now, there are at least a couple of large financial institutions that have started to push in the market for fees as part of their data access agreements. The view of FDAta and our members is that that's an anti-competitive move, that that's the cost of doing business if you're a financial institution. It's no different than a requirement to send a paper statement in the mail every month to a consumer. And it's not a surprise that what that would do is increase the prices of tools, products and services that compete directly with some of those tools that banks themselves offer. Unfortunately, in the absence of clarity from regulators, it's really about leverage in the marketplace and large financial institutions hold consumer data. There's no alternative. If I have an account with Bank A, FinTech can't go to Bank B and get my data, and so there's really no leverage in those negotiations.
Interviewer: And while I have you here, I do wanna expand on this and get your perspective on the regulatory timeline, which is in flux right now. What do we need to see?
Steve: Well, we need to see a clear signal about where this is all going to go. So, the CFPB has been saying they're going to repropose this rule for over 1 year now. It was submitted to the White House for review, where it's currently still sitting. That was more than 2 months ago. We're still waiting on a CFP director to be confirmed by Congress. That seems like probably the gating mechanism before we can see something. It's unclear exactly when he'll be confirmed. But even if the CFPB publishes a proposed rule, it is just that, it's a proposed rule, so it's a signal, but it's not enforceable yet. So we're probably at least 6 months or a year before we see a final rule, and the contours of that final rule are obviously very important for any third party service in the marketplace.
Interviewer: Well, you're joining me here in the final quarter of 2026, and it always seems as though we're counting down to a catalyst, and there's been plenty of uncertainty when it comes to the regulatory front in 2026, and you mentioned your expected timeline here, but one thing that we know is gathering speed and is unfolding. Our very eyes is a technology that all of us use, and that is artificial intelligence. So of course we're concerned about the role of agentic AI, and I understand you're speaking on a panel. So can you give us a sneak peek?
Steve: Sure, happy to do it, Rami. So look, agents have a lot of potential and there's a lot of data privacy and data security concerns alongside them. It's not unlike how uh fintech really started in the US back in the late 90s, which was the technology erupted. It was relying on screen scraping, which was using a credential to get access to your information cause there was no other way to do it. And then all those tools proliferated. The regulatory structure kind of evolved 20 years after the market started or 15 years after the market started. I think that's where we are right now with Agentic tools and with AI. It's really important as a fundamental building block of artificial intelligence and agentic tools in FinTech that a 1033 rule be in place, because again, all of the tools, whatever they do, if you have an agent, it has to access your data held somewhere else. What 1033 is fundamentally about is how should that access be provided, at what cost, with what data privacy and data security requirements, and then it puts obligations on the third party, in this case an agent. To meet certain requirements to make sure that your data is safe. So there's a lot of work to do, but let's face it, these tools are going to come to market whether or not the regulations keep pace.
Interviewer: Yeah, and speaking of which, on the ground here in Las Vegas at Money 2020, we know there are a lot of financial institutions as well as tech firms, and we are hearing about Agentec AI and the role in financial services as well as the role they play in digital assets. So there are a lot of concerns and As earnings season unfolds, we heard from the big banks last week and we'll be hearing from some of the hyper scalers this week, but not surprisingly, some of the financial institutions, the big banks are talking about the limits that they're placing in terms of agentic AI. So when we're talking about innovation at a place like Money 2020, where does the United States stand? And do you think some of the uncertainty Actually hampering innovation.
Steve: I think the United States is the most innovative market in financial services in the world, and that's in spite of, not because of a regulatory structure. Consumers vote with their fingers, and we're seeing that in the agentic world right now, but we are coming up on an environment where the lack of regulatory clarity is constraining kind of a future state and planning purposes, and so. Data is active in Canada as well. Canada is moving forward with rules for not only read access but write access for agents. They're doing that legislatively. There's legislation in parliament that was approved earlier this year. And so in the midst of all of the partisanship in Washington DC, one of the things that's lost is There are a lot of really important, perhaps not as sexy issues like this that need to get solved. The solution can't be that incumbents just block access. That's not the right answer, that that hampers innovation. It also blocks consumers from using tools that can help them meaningfully financially. Are there risks that have to be addressed? Absolutely. But that's a role for government and fundamentally, I mean, that's what 1033 provides a building block for. It doesn't solve all of those questions, but at least starts that conversation in a way that gives some assurance on data privacy and data security.
Interviewer: And finally, before I let you go, we have about 60 seconds here, and you mentioned the consumer. So for all of the viewers watching right now from the nation's airport gates, hotel lounges, as well as business lounges, what would you say to them in terms of what they can expect heading into the new year?
Steve: Well, I think they can expect some political turmoil if we can kind of read the. Leaves on what might have to be happening in the election. But on a regulatory front, not much is going to change. The administration is still going to be in place. We will see a 1033 rule, I hope, next year. And I hope that that gives some clarity to incumbents and new entrants that at least allows for some of that leverage in the market to be more even in a way that can allow for innovation to continue in the US.
Interviewer: Well, Steve, I really appreciate your time today. Thank you so much for joining us here at Money 2020. Thanks.
Steve: Thank you.
