U.S. Introduces New Open Banking Regulations

The key elements of the U.S. open banking regulation include: 1. Consumer control over their data: Consumers in the U.S. will have the right to instruct financial institutions to share their personal data with other banks, fintechs, and payment providers. This data includes transaction history, account balances, and details necessary for payments, promoting a smoother experience and encouraging consumers to seek better rates and services. 2. Free access to data: The rule prohibits financial institutions from charging for sharing customer data, ensuring that consumers can exercise their new rights without financial barriers. 3. Protection of data privacy and security: The regulation establishes that third parties may only use the data for the services requested by the consumer, preventing unauthorized uses for marketing or other unrelated purposes. This aspect is crucial to addressing the privacy concerns raised by critics of the rule. 4. Phased implementation: The largest institutions must comply with the new rule by April 2026, while smaller institutions will have until April 2030. This gradual implementation is intended to give smaller players more time to adapt to the significant changes in data management and privacy. According to the CFPB, this rule brings the U.S. banking system closer to competitive, secure, and transparent models, such as those observed in other advanced economies. CFPB Director Rohit Chopra compared the impact of this rule to the mobile number portability law, which allowed consumers to switch carriers without losing their phone number. Similarly, this open banking rule will provide consumers with greater freedom and ability to choose better financial service providers. However, reactions from market participants have been mixed. Fintech companies and data aggregators praised the rule for promoting innovation and the secure transfer of data, while traditional banks expressed concern about data security and the potential risks of allowing third parties to access sensitive consumer information. Some banking groups argue that the rule could expose consumers to data breaches or unauthorized uses, while others criticize the CFPB's legal authority to impose such broad access to financial data. Although this regulation is specific to the U.S., its indirect effects could be felt internationally, particularly by Mexican companies with connections to U.S. financial institutions or multinational clients operating in both countries. As the open banking framework promotes easier access to and transfer of data, companies and individuals in Mexico that interact with U.S. financial institutions could experience indirect effects, especially when it comes to cross-border banking services. Mexico has been pursuing a similar vision toward open banking since the approval of the Fintech Law in 2018. This law laid the groundwork for open banking in Mexico, requiring financial institutions to share customer data with third parties through secure APIs (Application Programming Interfaces). However, despite being a regulatory pioneer in Latin America, Mexico has not yet fully implemented its open banking framework, which could provide significant benefits for both consumers and businesses. The potential benefits of open banking in Mexico are considerable. If implemented effectively, open banking could improve financial inclusion, increase competition, and enhance the quality of the financial products available to consumers. As the Mexican financial system becomes more integrated with global trends, the experience of countries such as the U.S. could offer valuable insights for the future development of Mexico's open banking ecosystem. If your company operates in Mexico and interacts with U.S. financial institutions, or if you are interested in understanding how open banking may affect your company's operations or compliance obligations, our team of experts is here to provide the legal support and guidance you need. To review the CFPB press release, click here. To review the full content of the Resolution, click here. For any questions or additional information, please contact our experts: Luis Burgueño, Partner:+52 (55) 5258 1003 | lburgueno@vwys.com.mx Max Morales, Associate:+52 (55) 5258 1014 | mmorales@vwys.com.mx

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