“Using the model agreement as a reference to facilitate API agreements can streamline and accelerate the introduction of API technology.” The model agreement is part of TCH`s connected banking initiative, which aims to facilitate innovation and customer control, as well as the secure exchange of bank data. The initiative focuses on developing a model focused on direct connections, called application APIs, between banks and fintechs. The Clearing House is a founding member of the Financial Data Exchange and encourages the use of the FDX API for a secure and transparent exchange of data. The use of the agreement is voluntary and the parties may negotiate or modify elements independently of the other; it is intended to facilitate negotiations, not to conclude the trade agreement. TCH`s release of the Model Agreement reflects efforts to implement open, market-oriented banking in the United States 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. The model agreement aims to provide a common basis of universally recognised conditions as a starting point, in order to facilitate data access agreements between banks and fintechs and reduce the need to negotiate the same terms each time an agreement is concluded. The use of the agreement is voluntary and the parties may independently negotiate any elements they deem appropriate.

On 12 November 2019, The Clearing House (TCH) published a model agreement as part of TCH`s Connected Banking Initiative. The model agreement will serve as the basis for data exchange agreements between banks and fintechs. The agreement, developed in collaboration with TCH member banks, non-bank financial institutions and fintechs, was developed to speed up the legal verification process and ensure that key data security requirements are understood. The use of the Model Convention is entirely voluntary and the agreement should be amended if circumstances warrant. In addition, the model agreement avoids taking positions on commercial terms that must be negotiated strictly between the parties. However, the Model Convention provides a potential basis for common, generally accepted concepts to which both parties can refer; reduce the need to define and negotiate the same conditions each time a bilateral data access agreement is concluded if they so wish. “APIs have the potential to significantly exploit consumers, but the long process of reaching an agreement can become a bottleneck for the introduction of the API,” Hunter added. .