Regulatory Revision for 1033: Crucial Points to Understand
The Consumer Financial Protection Bureau (CFPB) has announced its intention to rewrite the Section 1033 Open Banking Rule, which was finalized in October 2024. The decision comes after a motion to pause the ongoing legal proceedings challenging the rule, signaling that the Bureau plans to replace the existing rule with one that has a more robust justification and aligns better with recent leadership priorities.
The 594-page document, issued by the CFPB, aimed to enhance consumers' rights, privacy, and security over their own personal financial data. It stipulated that banks could not charge third parties for data access. However, recent developments have sparked heated conversations over who owns consumer data and how many services banks should be expected to provide for free.
JPMorgan, for instance, has announced plans to charge data aggregators a fee to access consumer data. This move has added fuel to the debate, with some questioning whether banks should be allowed to profit from consumers' data.
The legal battle over the CFPB's Section 1033 rule began shortly after its issuance in 2024, when Forcht Bank, the Kentucky Bankers Association (KBA), and the Bank Policy Institute (BPI) filed a lawsuit against the CFPB. They argued that the Bureau overstepped its authority and violated the Administrative Procedure Act. The Financial Technology Association (FTA), a group that represents fintechs and aggregators, was granted permission to join the case in May 2025.
The federal court granted a pause in the case and extended it again in March 2025. The CFPB's latest move to ask the court to pause the current legal proceedings while it works on rewriting the rule has been met with mixed reactions. The FTA does not oppose the pause, but the plaintiffs do, arguing that the pause is a delay tactic.
The CFPB promises transparency throughout the rulemaking process and will submit status reports every 90 days. An Advanced Notice of Proposed Rulemaking (ANPR) is expected within three weeks. The future of open banking in the US is uncertain and up for debate due to the CFPB's decision to rewrite the Section 1033 rule.
The CFPB's decision could potentially reshape the boundaries around consumer data access and fees. There is speculation that the CFPB may soften the ban on data access fees in response to pressure from JPMorgan. The CFPB's intention to replace the rule that's being challenged in court reflects the complex and evolving regulatory environment for open banking in the US.
[1] CFPB Files Motion to Stay the Lawsuit Challenging the Section 1033 Rule (Consumer Financial Protection Bureau, 2025) [2] CFPB Announces Plans to Rewrite Section 1033 Rule (Consumer Financial Protection Bureau, 2025) [3] JPMorgan to Charge Data Aggregators for Consumer Data Access (The Wall Street Journal, 2025) [4] Forcht Bank, Others Sue CFPB Over Data Access Rule (American Banker, 2024)
- The CFPB's decision to rewrite the Section 1033 Open Banking Rule, which aims to enhance consumer rights over their financial data, could potentially reshape the boundaries around data access and fees, particularly in light of JPMorgan's plans to charge data aggregators for consumer data access.
- The ongoing legal battle over the CFPB's Section 1033 rule, challenging the Bureau's authority to regulate finance and technology aspects of open banking, has sparked heated conversations over who owns consumer data and the extent of services banks should provide without charge.
