Sharing Agreement Between Banks

TCH is a U.S.-based company owned by some of the world`s largest commercial banks. TCH is also the parent organization of the Clearing House Payments Company, a payment association made up of more than 1,000 members of financial institutions and company subscribers The model agreement is part of TCH`s connected Banking initiative, which aims to facilitate innovation, customer control and the secure exchange of bank data. TCH has developed a model agreement to comply with consumer protection principles: the authorisation for the sharing and aggregation of financial data published by the Consumer Finance Protection Bureau (CFPB) on 18 October 2017. Rob Hunter (Deputy General Counsel, TCH) said that “the Model Agreement provides a framework for the cooperation of banks and fintechs to implement the principles of the CFPB… “striving to”. enable the efficient and secure exchange of consumer data. While the use of APIs for the secure exchange of financial data between banks and fintechs is gaining momentum, the negotiation of agreements on such an exchange of data is not without its challenges. Hunter hopes that the model agreement will reduce cycles and friction points when negotiating such agreements: “APIs have the potential to significantly benefit consumers, but the lengthy process of reaching an agreement can become a bottleneck for the introduction of the API. Using the model agreement as a reference to facilitate API agreements can streamline and accelerate the introduction of API technology. TCH`s release of the Model Agreement reflects efforts to implement open, market-oriented banking in the U.S. that take into account the guidelines of companies such as the CFPB and the U.S. Treasury. This contrasts with the TERMS AND CONDITIONS OF SALE FOR API users in the UK, which are a standard form of agreement that can be entered into by API users (defined as individuals or organisations that choose to access open banking APIs). These terms and conditions of sale are the product of open banking Limited UK`s top down regulatory approach (Open Banking) and govern the relationship between open banking and each API user.

As part of risk sharing, the EBRD provides partner banks with risk participation schemes that are financed or not hedged in dollars, euros or local currency, under which the EBRD assumes part of the under-credit risk granted by partner banks to eligible clients. The ability of local banks to support the growth of successful SMEs, which form the backbone of economies across the Western Balkans region, is often limited by exposure limits imposed by central banks on individual borrowers or by their own internal policies to control the concentration of the loan portfolio. It will be interesting to see if the above developments in the US and UK will have an impact on Canada, where the Treasury is looking at open banking in Canada.