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Consumer Financial Protection Bureau Director Rohit ChopraBloomberg News WASHINGTON — Consumer Financial Protection Bureau Director Rohit Chopra framed the vocal opposition to the bureau's newly finalized open banking rule as an attempt by financial firms to maintain their dominant position over consumers and smaller competitors.  The bureau issued the final 1033 rule — named for the section of the Dodd-Frank Act requiring the bureau to establish rules allowing bank customers greater control over their financial data — on Monday, capping a yearslong effort to establish so-called open banking in the United States. Banks and banking trade organizations decried the final rule, which they said would compel banks to share sensitive consumer data with unvetted third parties. The Bank Policy Institute, which represents the largest banks, joined a handful of other plaintiffs in filing a lawsuit against the rule on Tuesday.Chopra framed the opposition to the rule as an attempt by entrenched business interests to retain their dominant position over consumers' financial data, and, by extension, to use that data as a profit center. He added that there is considerable support in the broader business community for the open banking rule."I think a lot of incumbents are wanting to hold on to consumer data and exploit it for themselves," Chopra told reporters following an appearance at the DC Fintech Week conference Wednesday. "I'm not going to comment on any lawsuit, but we have very broad support from industry players who know that the long-term interest of our system is best served by robust competition and data protection for the digital age."Chopra said during his remarks at the conference that one of the fundamental problems with the way financial data is shared now is that consumers effectively have to agree to broad and at times onerous data-sharing agreements in exchange for the services they seek, even if those agreements entail tracking consumers' activities in ways that can cost them down the road."We know that a lot of firms are looking to use our financial data to engage in surveillance-based pricing," Chopra said. "One of the problems is that disclosures and other click-through contracts have turned into mush, and instead of being clear about what is happening, instead we see fine print that, number one, no one reads, and two, when you read it, all it says is, 'We'll do whatever the hell we damn please, as long as it's legal.'"Chopra said the bureau's ongoing work to develop additional rules for data aggregators under the Fair Credit Reporting Act will tie in with the open banking rule to create a more consumer-friendly and competitive online environment. "I think people want their data used for the purpose that they intended, and they don't want a bait and switch, and that's why we're going to continue also with some additional rulemaking under the Fair Credit Reporting Act to make sure that all these data brokers that are collecting information about us are adhering to some reasonable standards on transparency, accuracy and privacy," Chopra said.Chopra added in his remarks after the conference that the disclosure requirements — which were established in the 1999 Gramm-Leach-Bliley Act — could benefit from a more comprehensive update from Congress, and said that the bureau is in conversation with lawmakers who are interested in pursuing a more robust data disclosure framework."There's broad support for enshrining more privacy protections when it comes to financial privacy. I think there's an agreement that that notice, annual privacy notice isn't enough," Chopra said. "There's broader issues when it comes to financial privacy. We do not really discuss who we're working with, but there's a lot of interest and we're always providing advice to those who want to advance this, and there's certainly a strong appetite on both sides of the aisle."When asked for comment on the bank lawsuit against the open banking rule, Chopra said he had few details to share."I haven't read their complaint," Chopra said. "And I don't know if they've read our rule."

While the mortgage industry ramps up investments in artificial intelligence, new research shows lenders are facing a trust gap among a majority of consumers when the technology plays a significant role.Approximately 60% of recent home buyers said a company's use of AI within the loan process would drive them to a different mortgage lender, according to research conducted by digital point-of-sale technology provider Cloudvirga. Consumer apprehension toward artificial intelligence appears despite overall satisfaction, especially among new home buyers, in technology trends that streamline mortgage operations today. "Our survey results reinforce the growing consensus that home buyers are becoming increasingly tech-savvy and expect the mortgage process to mirror the seamless digital experiences they encounter in other parts of their lives," Cloudvirga CEO Maria Moskver said in a press release. She noted, however, diverging sentiment toward artificial intelligence. "Clearly, while AI is an increasingly major component of digital mortgage origination, it's still not a trusted system for many borrowers," she said. The survey questions looked at artificial intelligence deployment within the overall lending process and did not delineate usage for individual elements or tasks. Cloudvirga's findings come as regulators continue to scrutinize potential unintended consequences of using AI, regularly raising concerns about bias artificial intelligence-backed tools might bring if used in the loan approval or appraisal process. At the same time, fintechs themselves are trying to grapple with fair lending concerns, making efforts to determine the right balance to remove bias from their modeling without sacrificing accuracy.   "Lenders need to be cautious with how they develop their digital, borrower-first experience, taking a measured approach that meets consumers where they are," Moskver said. Outside of artificial intelligence, though, respondents in Cloudvirga's research showed borrowers were far more content with technology's growing role in mortgage lending that gave them self-service options. In the survey of homeowners who either bought or refinanced properties in the past two years, 71% said they were very satisfied with lender-provided tools that helped them manage the application process. Over two-thirds also indicated high levels of satisfaction with lender's responsiveness when they needed online support. In past research, the length of the closing process frequently stuck out as a pain point for mortgage borrowers. In Cloudvirga's survey, participants pointed to more efficient transactions thanks to tools that gave them real-time loan-status updates, which a 69% share took advantage of. Over half, or 52%, said they also benefited from eSigning tools. Meanwhile, 72% indicated they used automated methods to submit documents in the application and underwriting process. A 92% share overall said they were at least somewhat satisfied with their document-submission process.The survey of over 1,000 participants in Cloudvirga's research tended to skew younger, with approximately three-quarters both under the age of 40 and buying a home for the first time. In a sign of what the future could hold for lenders, over three-quarters, or 77%, said they expect their next mortgage loan transaction to be entirely digital. A majority of 63% wished their most recent transaction to have been even more of a digital experience.Still, loan officers continue to play a much-needed role for borrowers, with 58% consulting them to handle the initial application process. Under half, or 46%, received direct communication from their LO when supporting documents or additional information were required. "The survey results highlight an important nuance in consumer expectations during the mortgage process. They want the ease and efficiency of automated platforms and a borrower-friendly user interface, but they are still relying on loan officer involvement," Moskver said.

Mr. Cooper's profitability waned in the third quarter on a $126 million negative adjustment to servicing valuations, net of hedges, which detracted from other business gains, but numbers adjusted for one-time charges looked more favorable.The company's net income was $80 million during the third quarter, compared with $208 million in the second and $275 million a year earlier. Its third-quarter revenue totaled $246 million, compared with $456 million in the second and $574 million a year ago.Ahead of earnings, the consensus mean estimate for third-quarter net income under standard accounting principles had been $162.3 million, according to Standard & Poor's Capital IQ. The consensus estimate for third quarter revenue had been $536.65 million. Diluted EPS came in at $1.22, compared with a consensus estimate of $2.33. However, at $2.84, earnings per share adjusted for nonrecurring charges outpaced a $2.59 consensus estimate.As of midday, Mr. Cooper's stock price was approaching $88 per share, down slightly from where it opened after a mixed reaction to the earnings results. The company's shares had alternately risen and fallen throughout the morning.The company's servicing mark reflected a drop in rates that has since moderated.Outside the MSR mark, servicing generated $177 million in pretax income during the quarter. Originations brought in $69 million.The company also announced it had record liquidity during the period with more than $4 billion in unrestricted cash and unused funding lines to support its business activity like its acquisition of servicing and other assets from Flagstar.Mr. Cooper anticipates closing that acquisition in the fourth quarter. Once that deal closes, the company will become the top player in the servicing business, outpacing previous leader JPMorgan around $100 billion, according to BTIG."We now have 5.4 million customers, which will rise to over 6 million when Flagstar closes, this makes us the single largest customer franchise in the mortgage industry," Jay Bray, the company's chairman and CEO, said during its earnings call.The company is paying for the transaction with a mix of cash and funds from financing secured by servicing assets, with the capacity of the funding vehicle anticipated to grow as a result of the deal.The deal also will put the company in an exceptionally strong position when it comes to buying MSRs "not only in the bulk market, but in all markets," said President Mike Weinbach.When asked if the Ginnie Mae risk-based capital rule for nonbanks set to take effect as the year closes could be the catalyst for additional MSR sales, Chief Financial Officer Kurt Johnson said it was possible.Ginnie Mae activity "has been really, really modest, actually, in terms of bulk sales," Johnson said, but noted that in the couple of years that have passed since the rule was announced, "We've seen a little bit more."His recollection was the government mortgage-bond guarantor has said a few companies have been undercapitalized."We're extremely well capitalized based on all the guidance, and we stay sort of closely in tune with Ginnie in terms of any kind of changes they plan on making to those guidelines," he said.In addition to solidifying its position in servicing, Mr. Cooper also has been making executive changes in line with a restructuring trend at publicly traded housing finance companies. In Mr. Cooper's case, the changes have been focused on digital mortgages.Sridhar Sharma transitioned to two new C-suite roles as the chief innovation and digital officer earlier this month. He previously was the company's chief information officer. Mr. Cooper recently named Jeff Carroll chief technology officer. Carroll was previously the senior vice president of platform and cloud engineering at global travel platform Sabre. Rounding out its executive changes in technology was the appointment of two new senior vice-presidents who will work on developing the company's data strategy and governance models.Prerna Kandhari will focus on data engineering and David Graham is set to be responsible for data governance. Kandhari previously served as director of software engineering at Capital One. Graham was managing director at Royal Bank of Canada.The management restructuring comes amid speculation that competition is heating up between Mr. Cooper and another player that's been more focused on digital operations.Keefe, Bruyette and Woods analysts have opined that a new Rocket Mortgage-Annaly partnership has "a slightly negative read-through to the large subservicers," including Mr. Cooper and Pennymac. (Pennymac also recently made a C-suite change.)However, Rocket's Chief Business Officer Bill Banfield indicated its partnership is not a signal of deepening involvement in the subservicing strength on the order of larger players like Mr. Cooper already in the space."We do not have a desire to be a standalone subservicer and compete with many of the firms that are out there that are low-cost providers in the space," he said in a recent interview.

Digital mortgage servicing platform Valon raised $100 million in a Series C funding round, it announced Wednesday.The round was led by WestCap, a New York-based investment firm, with new participation from venture capital firm Andreessen Horowitz, according to the fintech.Since its founding in 2019, the subservicing company has raised a total of $230 million, including nearly $100 million from two funding rounds in 2021.The injection of additional cash will be used to "further accelerate Valon's product development and market expansion, positioning Valon as the go-to software platform for an industry poised for transformation," the company said in a press release. In five years Valon has climbed to be a top 15 U.S. subservicer, with close to $65 billion in customer mortgages serviced on its platform. It claims to have experienced 400% growth year-over-year.The subservicer says it is solving "the most deep-rooted challenges in the mortgage industry" via its platform that is used by mortgage servicers and homeowners. "This new funding demonstrates that we've hit the milestones to prove our software is best in class and will allow us to double down on our technology to deliver even more value to the industry," said Andrew Wang, CEO of Valon, in a press release. Looking ahead, the fintech views cross-selling products to customers as a strategy to expand its business and increase market share in the industry. It highlighted the recent introduction of consumer services in property insurance and property tax appeals.Josh Dart, a partner at WestCap and a member of Valon's board, said the New York-based subservicer is shaking up an industry that has "been characterized by limited technological innovation for decades.""The company's strong growth and market share gains, industry-leading innovative feature set, and best-in-class customer satisfaction underscore Valon's ability to deliver meaningful value to both mortgage servicers and homeowners," Dart added.

U.S. sales of previously owned homes declined to an almost 14-year low in September as prospective buyers waited for a further decline in mortgage rates and more attractive asking prices.Contract closings decreased 1% from a month earlier to a 3.84 million annualized rate, according to figures released Wednesday from the National Association of Realtors. Economists surveyed by Bloomberg expected a 3.88 million pace, based on the median projection. Many buyers and sellers are waiting for home financing costs to fall from their current perch in the mid-6% range. Mortgage rates, which slid to a two-year low in September, have climbed after recent job market and inflation data boosted bets the Federal Reserve will take a more gradual approach to reducing borrowing costs.The resale market has largely been stuck for the past two years, barely moving much above or below an annualized rate of 4 million homes on a monthly basis. A major factor has been the so-called lock-in effect, or homeowners' reluctance to list their homes and surrender their lower mortgage rate. Even with the weaker September sales figures, "factors usually associated with higher home sales are developing," Lawrence Yun, NAR chief economist, said in a statement. "There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy."Some 1.39 million homes were for sale in September, up 23% from a year earlier, the NAR report showed. The supply of homes still remains below pre-pandemic levels.At the current sales pace, available inventory would last 4.3 months, the longest in more than four years.The median sales price rose 3% in September from a year ago to $404,500.By RegionAround the country, previously owned home sales dropped in three of four regions, including a 1.7% decline in the South to the slowest pace since the start of 2012. Recent hurricanes likely hurt sales along Florida's western coast, Yun said on a call with reporters Wednesday. Closings fell 2.2% in the Midwest to a 13-year low, and 4.2% in the Northeast. Sales rose 4.1% in the West, driven by California and Arizona. In September, 57% of homes sold were on the market for less than a month, compared with 60% in August, according to the NAR, and 20% sold above the list price. Properties remained on the market for 28 days on average, versus 26 days in the previous month. Odeta Kushi, deputy chief economist at title insurance giant First American Financial Corp., said last week in a note that some 12 million renter households could afford a median-priced existing home if mortgage rates fall to 5.8% next year, as some are projecting. However, inventory problems could persist since "84 percent of mortgaged homes have a rate below 6%, so the number of sellers that would be financially incentivized to sell would remain limited," she said in the report.   Existing-home sales account for the majority of the US total and are calculated when a contract closes. On Thursday, the government will release September new-home sales figures, which are based on contract signings. 

Mortgage delinquency rates rose on an annual basis for the fourth consecutive month. With the exception of the early months of the pandemic in 2020, this is longest stretch since 2018, the First Look report from ICE Mortgage Technology found.The total delinquency rate, defined as loans 30 days or more late on payment but not yet in foreclosure, was 3.48% in September. That was an increase of 4.3% compared to August's 334 basis point rate and up by 5.74% compared with September 2023's rate of 329 basis points.This data follows the Mortgage Bankers Association's recent report that performance on loans that had been in forbearance (borrowers who have at one point been distressed) has been slipping over the past four months. "The gradual rise in mortgage delinquencies is due to a combination of factors," Andy Walden, ICE vice president of research and economics, said in an emailed comment. "Elevated interest rates over the past couple of years have resulted in higher debt-to-income ratios; modest rises in unemployment, along with recent natural disasters have made it more difficult for some homeowners to make their mortgage payments; and all of that is happening with the context of the post-COVID normalization of the mortgage market."In an even greater sign of problems, serious delinquencies (borrowers 90 days or more late on payments not in foreclosure) increased by 5.9% month over month, to their highest level in 16 months.But since it takes some time for the foreclosure process to be initiated, those numbers are not as telling as to current borrower distress. If anything, loans in active foreclosure were up approximately 0.4% compared with August, but down were 12.5% from this time last year and still 34% below pre-pandemic levels, ICE Mortgage Technology found.Servicers made 26,000 foreclosure during September, down 5.4% versus August but up by 2.02% from the same month last year.The month ended with almost 2.07 million properties either late on their payments or in foreclosure, up by 80,000 compared with August, and by 105,000 in September 2023.Mortgage rates were still on a downward trend during September, and that showed in the prepayment speeds. The monthly prepayment speed of 64 basis points was up over 43% from the same month last year. This was the fastest in over two years, since August 2022.The gain from August was much lower, at 2.5%.

Simon Dawson/Bloomberg Bank of America Chief Executive Brian Moynihan has urged Federal Reserve policymakers to be measured in the magnitude of interest-rate reductions. "They were late to the game" in lifting borrowing costs in 2022, Moynihan said in an interview with Bloomberg TV in Sydney on Wednesday in his first trip to Australia. "They have got to make sure they don't go too hard now" with cuts. The danger for the central bankers is that "they go too fast or too slow and that risk is higher now than it was six months ago," the CEO of the Charlotte, North Carolina-based bank said.Investors have dialed back expectations for rapid U.S. rate decreases, and some Fed officials have signaled they favor reductions at a slower pace following the first cut since 2020 last month. That comes amid signs the American economy remains robust. Moynihan, 65, is one of the longest-serving chiefs among the top U.S. banks, and has signaled his intent to stay on for years to come. He was promoted to CEO in 2010 as Wall Street emerged from the subprime mortgage crisis and has shepherded the lender through the COVID-19 pandemic and the banking industry crisis that destroyed Credit Suisse and Silicon Valley Bank.Moynihan's visit to Australia included a meeting with King Charles, who is also in the country to discuss the Sustainable Markets Initiative, which the banker chairs.The Bank of America boss said during third-quarter earnings last week that the bank expects "no landing" for the U.S. economy, referring to a situation in which growth stays strong, forcing central banks to remain hawkish on their inflation fight for longer."With an unemployment rate at 4% and wage growth at 5%, it's hard for an economist to convince the world there's going to be a recession," he said Wednesday. He said he expects another 50 basis points of reductions before the end of the year from the Fed, and then four more cuts of 25 basis points spread evenly during 2025, bringing the terminal rate to 3.25%. He expects inflation would drift down to 2.3% into 2025 and 2026 under such a scenario. U.S. consumers are still cashed up from savings they accrued during the pandemic, the bank has said, though some households have recently showed signs of becoming more budget-conscious. Investors are watching spending behavior to help predict how the Fed will decide to move on interest rates.To be sure, a higher-for-longer monetary policy would be a boon. Central bank policy rates have an outsized impact on lenders, which are customarily able to price in a bigger spread on the loans on their books in such an environment.An end-of-cycle rate around 3% would be "a whole different interest rate environment in the U.S. and other markets than it's been in the last 15 years or so," Moynihan said. "That's a better place for us to be frankly."The bank's net interest margin — a key measure of the difference between the rates they charge on loans and their payout to depositors — is set to expand over the longer term to as high as 2.3%, he said. "That's unusual. Most people are flat to down, and we're starting to grow," Moynihan said.

U.S. mortgage applications for both home purchases and refinancing dropped last week to the lowest levels since August, hobbled by a recent surge in mortgage rates.Mortgage Bankers Association's gauge of home purchases declined 5.1% in the week ended Oct. 18, marking the third straight decrease. The refinancing index retreated another 8.4% last week after slumping by the most since March 2020. The contract rate on a 30-year fixed mortgage held at 6.52%, the data released Wednesday showed. A month ago, the rate stood at a two-year low of 6.13%.Mortgage rates have been moving up in concert with U.S. Treasury yields on expectations Federal Reserve policymakers will be more prudent with interest-rate cuts as the economy proves resilient. Higher home financing costs, along with still-elevated asking prices, risk extending a more than year-long period of sluggish housing demand.Yields on 10-year Treasury notes rose on Tuesday to 4.2%, the highest since late July and up from a 15-month low of 3.6% on Sept. 17 — one day before the Fed lowered borrowing costs by half a point.The MBA survey, which has been conducted weekly since 1990, uses responses from mortgage bankers, commercial banks and thrifts. The data cover more than 75% of all retail residential mortgage applications in the US.

Pennymac Financial Services is coming off smaller profits but eying a larger play in the wholesale space.The massive lender and servicer Tuesday afternoon reported a net profit of $69 million in the third quarter. That was a drop-off from $92.9 million a year ago and $98.3 million in the recent second quarter. Its diluted earnings per share also fell to $1.30 per share on revenue of $411.8 million, a steeper drop-off from $1.85 a quarter ago.  Servicing pretax income slipped in the red to a $15 million loss, an improvement from last quarter's $60 million deficit but far below a $101.2 million profit the same time a year ago. A massive $242 million hedging gain was mitigated by a $402 million fair value change in mortgage servicing rights, as lower market interest rates affected Pennymac's holdings. That compared to production segment revenue that more than doubled quarterly and quadrupled annually to $108 million. Executives in a conference call touted the production gains, including rises in correspondent, broker direct and consumer direct channels.On top of $20.7 billion in correspondent lock volume, Pennymac's broker direct and consumer direct channels reported similar lock volume of $5.3 billion and $5.2 billion, respectively. The lender says it now works with a quarter of the broker population, with 4,411 approved brokers.Pennymac is positioning itself as a strong second alternative to brokers compared to the wholesale channel leaders, United Wholesale Mortgage and Rocket Pro TPO, who are Pennymac Chairman and CEO David A. Spector says are going after each other on an exclusive basis. "I look at our tech versus the tech that's provided by two very well run organizations for the number one and two slots, and I think we are just as good, if not better, in our tech," said Spector. Company leaders promised more technology tools for brokers this winter and anticipated broker direct gain-on-sale margins, largely flat around 97 basis points, to eventually rise. The lender's leading correspondent operations reported consistent lock and gain-on-sale margins, but consumer direct margins thinned from 474 basis points a year ago to 323 bps in the third quarter. Pennymac blamed higher production expenses on more refinance transactions and more activity in its direct lending channels overall. The servicer's portfolio inched up to $648 billion in unpaid principal balance ending September. It reported a refi recapture rate of just 9% for its conventional loan portfolio, but a stronger 42% recapture rate for its government-backed home loans. Including closed-end second loans, that government recapture rate rose to 52% for the first nine months of 2024. Executives also hinted at more hiring as mortgage rates continue their rocky path downward, after running Pennymac "capacity tight" in 2023. "Versus the alternatives in hedging the MSR, it's the least expensive path that we can take with the most economic opportunity on the upside when rates do decline," said Spector.

The Consumer Financial Protection Bureau (CFPB) released its final open banking rule on Tuesday, requiring banks over the next six years to allow customers to share their financial information with third parties like budgeting app providers, lenders and even other financial institutions.The rules are designed to grant Americans greater agency over their financial data, promoting data privacy through new transparency rules and data security with existing standards from the Federal Trade Commission and prudential regulators.While banks have complained that the rule opens them up to liability over third parties' handling of consumer data, the rule addresses other security and privacy concerns. Two, according to the CFPB, are that the rules grant greater privacy rights to consumers and greater security by limiting the means third parties may use to access this data to only the most secure available options. A third is that the rule clarifies and builds on the data security standards to which banks and non-bank financial services companies are held.Here are three ways the CFPB's Personal Financial Data Rights Final Rule will affect data privacy and data security at banks:Banks, third parties will owe consumers more control over dataWhen a consumer permits a third party access to their banking data, the bureau's new rule grants the consumer the right to know what financial data the third party collects, where it is stored and with whom it is shared. Banks, fintechs, and any company that consumers grant access to their data will share the responsibility for providing consumers these rights.Consumers will also gain the legal right to revoke this access at any time. When a person revokes access, the rule mandates the immediate termination of data access and deletion of the data.The rule also enables consumers to transfer their bank data to another bank. Consumers will not have to pay fees or clear hurdles from companies that make it harder to switch providers, the bureau said.Rob Nichols, president and CEO of the American Bankers Association, raised some objections to the new rule."While we are still evaluating the details of the final rule, it is clear that our longstanding concerns about scope, liability, and cost remain largely unaddressed," said Nichols. "This is disappointing after so many years of good-faith efforts by parties on all sides to improve consumer outcomes."According to one consumer advocate, the Personal Financial Data Rights Rule finalized Tuesday builds on previous consumer data privacy protections and facilitates competition with the credit bureaus. According to Chi Chi Wu, senior attorney at the National Consumer Law Center (NLCL), the credit bureaus have exercised an "oligopoly" that leaves consumers with little choice."This new rule also gives consumers greater control over what data is used and how," Wu said. "It should serve as a model for all data privacy regimes in the United States. It far exceeds the protection of weaker privacy laws that preceded it, such as the Gramm-Leach-Bliley Act."Building on GLBA, FTC data privacy standardsUnder the bureau's new rule, non-bank companies involved in data access must comply with the Federal Trade Commission's (FTC's) Standards for Safeguarding Customer Information, rather than the standard to which banks and credit unions are held: Section 501 of the Gramm-Leach-Bliley Act (GLBA)."A data provider must apply to the developer interface an information security program that satisfies the applicable rules issued pursuant to section 501 of the GLBA," reads the 594-page final rule. "Alternatively," it goes on, "if the data provider is not subject to section 501 of the GLBA, the data provider must apply to its developer interface the information security program required by the FTC's Standards for Safeguarding Customer Information."While the final rule itself is extensive, the bulk of it is what the CFPB calls a "preamble" — responses to comments submitted on the bureau's proposed rule, and explanations for why the bureau did or did not change the regulation in response to those rules. The regulation itself is 38 pages in length.The differential standards for banks and non-banks apply to both data providers' developer interface and third parties' systems for collecting, using and retaining data from these interfaces. In other words, whether a bank or non-bank is providing or taking data, the FTC standard applies to non-banks, and the GLBA standard applies to banks.While the content of the two standards differ in terms of level of detail and prescriptiveness, the key difference is oversight. Prudential regulators enforce the GLBA with proactive examinations, the FTC enforces its regulations through investigations and law enforcement actions, which are more responsive.In addition to these requirements, large data aggregators are subject to supervisory examinations by the CFPB, according to the final rule. These examinations, the bureau said, are ongoing.Data aggregators, according to the rule, serve as a facilitator between data providers and third parties. While not explicitly named as an example of a large data aggregator in the rule, Plaid is a major player in the space.Screen scraping will effectively be bannedWhile the final rule does not explicitly ban screen scraping, it does set out rules that will effectively ban the practice in many situations.The final rule mandates that data providers (e.g. banks) establish and maintain a developer interface (e.g. an API) for secure and standardized data sharing with authorized third parties. The bureau picked the term "developer interface" to be intentionally broad and avoid prescribing APIs specifically, in response to concerns that the rule should not hold banks to using a specific technology.The final rule prohibits data providers "from relying on a third party's use of consumer credentials to access the developer interface." In other words, a third party can't use the consumer's online banking password to access the bank's developer interface.The bureau cautioned in its final rule that, once a data provider has established a developer interface, screen scraping attempts by third parties "could well be limited" by the Consumer Financial Protection Act's prohibition on unfair, deceptive, and abusive acts or practices because the third party would be "needlessly exposing consumers to harm" by storing the user's account credentials.There will be exceptions where screen scraping is permitted, according to the final rule. One example the CFPB highlighted was cases where a consumer permits a third party to access data at a financial institution that is not required to establish a developer interface. Institutions not covered by the rule and not required to maintain a developer interface include those with less than $850 million in assets.