Biden’s Executive Order: Laying the Foundation for Open Banking

Last week, President Joe Biden issued an executive order that included a list of objectives across a plethora of industries intended to improve competition. The White House describes the sweeping order as, “decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses.” 

The order includes 72 initiatives aimed at tackling monopolization and it includes objectives to help lower prescription drug prices, make changing jobs easier, empower farmers, and more. It also includes an important section on Banking and Consumer Finance. The section includes language to increase the difficulty of bank mergers and allow customers to regain control of their financial data from banks. Specifically, the Executive Order Fact Sheet encourages: 

  • The DOJ and the agencies responsible for Banking (the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency) to update guidelines on banking mergers to provide more robust scrutiny of mergers.

  • The Consumer Financial Protection Bureau (CFPB) to issue rules allowing customers to download their banking data and take it with them.

 

This Executive Order represents a tremendous step forward for the Open Banking and Open Finance movement in the United States. Open Banking adoption in the US has historically lagged behind due to obstacles such as technology fragmentation, a lack of regulation, and an inconsistent data framework. Although the Executive Order doesn’t provide prescriptive regulation for the Banking industry, it does align with a core tenet of Open Banking: give the consumer control of their financial data. 

For companies looking to provide solutions that improve the experience of consumers via Open Banking, the Executive Order helps open the door to a competitive landscape, heightening awareness and encouraging innovation. At Trustly, we remain committed to the principles of Open Data and Open Finance and we are excited to see how this Executive Order helps foster a more convenient and transparent banking experience for US consumers. 

Craig McDonald, Chief Business Officer at Trustly explains, “We are excited and encouraged by the Executive Order coming out of the White House last week. A more inclusive landscape for Open Banking is good news for the consumer who wants to take control of their own financial data and enjoy the benefits of an interoperable and accessible ecosystem of financial tools."