The Clearing House unveils new data API model agreement

The Clearing House (TCH) has announced the release of a new ‘model agreement’ to support financial institutions and fintech companies establish legal terms for the sharing of bank-held consumer data.

Developed in collaboration with TCH member banks, non-bank financial institutions and fintechs, the agreement has been produced to help speed up the legal review process and ensure key data security requirements are understood. 

Acting as a “common foundation,” the model is expected to be viewed as a starting point to facilitate data-access agreements between banks and fintechs and reduce the need to negotiate the same terms each time they enter into an agreement. 

“The Model Agreement provides a framework for how banks and fintechs can work together to implement the CFPB’s principles,” said Rob Hunter, Deputy General Counsel at TCH. 

“We look forward to continuing efforts to facilitate the efficient and safe sharing of consumer data.”

Use of the agreement is voluntary and parties can independently negotiate or modify any elements; it is intended to facilitate negotiations rather than complete business agreements.

This complements CFPB’s Consumer Protection Principles: Consumer-Authorized Financial Data Sharing and Aggregation’ focusing upon consumer control, transparency, safety and security of bank-held data plus “appropriate accountability” for any risks introduced into the financial system. 

Furthermore it acts as another milestone for the TCH’s ‘Connected Banking’ initiative, which aims to facilitate innovation and customer control and the secure exchange of bank-held data.

One key aspect of the project is developing application programming interfaces (APIs), between banks and fintechs. 

“APIs have the potential to significantly benefit consumers, but the lengthy process to reach an agreement can become a bottleneck to API adoption,” added Hunter. 

“Using the Model Agreement as a reference to facilitate API agreements can streamline and accelerate the adoption of API technology.”

TCH added that it “welcomes input that could improve future versions” plus, as further innovation takes place, modifications can be incorporated in the future.