Biden executive order addresses bank mergers, portability of customer data

In a sweeping executive order signed Friday, July 9, President Joe Biden set forth a number of measures aimed at restricting anti-competitive practices. Those most relevant to the banking and financial technology industries included enhanced scrutiny on bank mergers and user control over customer data.

Why should we care?
A wave of consolidation in the banking industry is a likely motivator for the administration to keep a closer eye on mergers. The executive order encourages the Justice Department, the Federal Reserve, 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.” In addition to tighter controls on mergers, the administration appears to be interested in giving consumers more control over their data. By way of illustration, the administration, through the executive order, is encouraging the Consumer Financial Protection Bureau (CFPB) to issue rules allowing customers to download their banking data and take it with them. The likely rationale for this move is to prevent unauthorized access to consumer financial data and make it easier for consumers to explicitly grant consent to third parties to access their financial data. In October, the CFPB issued an advance notice of proposed rulemaking (ANPR) addressing Section 1033 of the Dodd-Frank Act, a law that gives consumers the right to access their financial information. In a statement, data aggregator MX applauded the administration’s move. “We would like all Americans, regardless of where they choose to bank, make payments, or borrow, to have access to modern connectivity that safeguards their data and their deposits,” Jane Barratt, Chief Advocacy Officer at MX, said. “This means secure access to all of their financial data, and the ability to share it with providers of their choice, ensuring the best solutions for them and their families.”