USA LAW AND PRACTICE Contributed by: Margo H.K. Tank, Michael Fluhr, Era Anagnosti, Kristin Boggiano, David Stier, Liz S. M. Caires, Adam Dubin, Emily Honsa Hicks, Kathleen Birrane and Chezelle McDade, DLA Piper LLP
The Act also defines what entities may issue a pay - ment stablecoin and sets various requirements for such issuers. The Act provides a three-year transi - tion period, after which compliance is required before digital asset service providers may sell payment sta - blecoins to persons in the USA.
• approaches to fee assessment to defray a covered entity’s costs in responding to a customer request; • the threat and cost-benefit pictures for data secu - rity associated with Dodd-Frank compliance; and • data privacy issues associated such compliance. CFPB indicated its intent to issue an interim final rule, but has not yet done so. 11.2 Concerns Raised by Open Banking As part of permitting access to the accounts and data of banking customers, financial institutions, fintechs, and third-party data aggregation platforms providing open banking services enter into contracts to address the risks and responsibilities associated with data security and privacy. Covered issues include: • technical processes and requirements to access accounts, data and services; • scope of access; • authenticating account holders; • elimination or restriction of “screen scraping” by data aggregators; • data transmission, accuracy and protection; • distribution of risk for loss and damages; • “pass through” terms for account holders and third parties; • delivering notices and disclosures to account hold - ers; • record retention requirements; and • security reviews and audits. 12. Fraud 12.1 Elements of Fraud Generally, claimants may demonstrate fraud if they establish: • a material false statement; • knowledge that the statement was false when it was made; • reliance on the false statement by the victim; and • damages resulting from the victim’s reliance on the false statement. In certain circumstances, an omission of a material fact may also support a fraud claim.
11. Open Banking 11.1 Regulation of Open Banking
Open banking allows third-party developers to access financial data in traditional banking systems through APIs mandating standardised data formats and secure communication protocols. The APIs facilitate the secure exchange of financial information between banks and authorised fintechs – effectively decentral - ising financial services. In 2025, banking trade groups sued CFPB immedi - ately after its release of the “Personal Financial Data Rights” rule, also known as the “Open Banking” rule, to curtail screen scraping. The rule would have: • enabled consumers to access and share their personal financial data with third-party providers securely and without charge; • enabled covered entities – eg, financial institutions, credit card issuers, and digital wallet providers – to provide consumers and authorised third parties with access to specified consumer financial data upon request; and • established privacy and security protections, limit - ing third parties’ use of the data they receive to the purposes expressly authorised by the consumer. A federal court issued preliminary relief delaying the rule’s effective/compliance dates while the case pro - ceeds. Under the Trump administration, CFPB repealed the rulemaking and, in August 2025, issued an Advance Notice of Proposed Rulemaking soliciting comments on a new open banking rule. CFPB listed four areas for comment: • who may serve as a consumer “representative”;
978 CHAMBERS.COM
Powered by FlippingBook