The Consumer Financial Protection Bureau last month proposed a final rule to usher the era of open banking into the U.S.

With the results of the presidential election last week, though, it remains to be seen how final the rule might be. The day the CFPB introduced the agency’s approach, bank trade groups sued to stop it.

Open banking is a concept, already at work in Europe, that gives consumers more control over their own personal financial data, with the prospect of shifting account information from one financial institution to another. Open banking is intended to let U.S. consumers more easily switch from one bank account to another, or from one credit card provider to another, to suit their interests, presumably increasing industry competition, CFPB Director Rohit Chopra has said.

The opportunity to initiate the new open banking environment was permitted under Section 1033 of the Dodd-Frank Act. It says “a consumer financial services provider must make available to a consumer information in the control or possession of the provider concerning the consumer financial product or service that the consumer obtained from the provider.”

The banking, payments and fintech industries have been engaged for years now with regulators on setting up a framework for the new open banking realm. With the Trump administration taking over from President Joe Biden in January, the professionals in the industry are already thinking about how their current work on the open banking front will morph in response to a likely change in leadership at the CFPB. 

What organization will set the industry standards for open banking has been an important part of the discussion. So far, the frontrunner for the role is FDX, short for Financial Data Exchange, an industry association and nonprofit.

Banking and payments technology services provider Jack Henry is one company that has contributed to an industry effort to craft open banking standards, giving the financial institutions it caters to will be significantly impacted. The company’s head of engineering, Chad Killingsworth, spoke with Payments Dive last week about Jack Henry’s involvement and his views on FDX’s role and next steps under the Trump administration.

Editor’s note: This interview has been edited for clarity and brevity.

PAYMENTS DIVE: What has Jack Henry’s involvement with the open banking effort, and industry development of standards under 1033, looked like?

CHAD KILLINGSWORTH: Jack Henry has been working on open banking on behalf of our financial institutions for more than five years. So, all of our institutions are well-prepared and well on the way there. ... Most of the technical aspects are already in place, even though none of Jack Henry's financial institutions would be required to be compliant for 2½ years.

Can the industry move forward with its open banking collaboration regardless of what happens with the CFPB’s open banking rule?

So, the threat of 1033, all the way back to the Dodd-Frank Act, when it was passed, has kind of pushed the industry to collaborate and participate in really positive ways. The Financial Data Exchange as an organization helping to set standards of interoperability is a really positive thing. ... I'm of the opinion that the regulation should be as minimal as possible, just encouraging the industry to go this way. Some of the players do take the forcing function of regulatory compliance to kind of get over the line, but there's quite a number of integrators who are helping already. So, I see this as successful, regardless of what happens, finally, with the regulation.

Is the industry intent on having multiple standard-setting bodies, so more than just FDX, and why might that be more beneficial?

From a regulatory perspective, you don't want to squash innovation and because you're requiring compliance, more standard-setting bodies means more ways to be compliant. But from an implementation standpoint, most people don't want to deal with more than one standard. That's OK, because generally, at that point, you're going to have a, for lack of a better term, a bake-off: May the best standard win. I don't necessarily think multiple standard-setting organizations is a problem. I just think most of the industry is going to end up using one, and there's just going to be pressure to get to the one.

So, will FDX be the standard-setter?

FDX is the de facto standard-setting body, whether it’s named so, or not, by the CFPB at this point. If the CFPB were to fail to say, FDX is a standard-setting organization, that would effectively just cause a lot of chaos. There's no other place where we're all collaborating like that, so we'd be starting from scratch, and that would set the whole concept back by years and years.

Are there any other ways this could unfold under the new administration?

The other option would be, and this will depend on what happens in the next few years, to leave the regulation pretty high-level and nebulous, kind of like it is now, and just allow the industry to select its own standard-setting organizations and not officially bless one at all.