After the CFPB withdrew its lawsuit over Part 1033 of the Dodd-Frank Act, the bureau said that it could start a brand new, “accelerated” rulemaking course of with an Superior Discover of Proposed Rulemaking (ANPR) inside three weeks. That three-week interval ended final week, on August twenty second, when the CFPB printed its Private Monetary Knowledge Rights Reconsideration, successfully kicking off the brand new rulemaking course of.
A lot is using on how this rule takes form, not just for banks, however for fintechs and customers alike. Visa’s current transfer to desert its US open banking initiatives underscores simply how excessive the stakes are. In its newest launch, the CFPB requested for feedback and knowledge to information its selections on 4 vital points tied to Part 1033. Beneath, we’ll stroll by way of every subject and discover the potential influence.
Representatives: who deserves entry to the info?
The primary of the 4 points is defining who can function a consultant on behalf of the patron. The query primarily asks who could make a request to entry the patron’s knowledge on their behalf. As we speak, this consists of not solely the patron themselves, but in addition third-party aggregators and fintechs, as nicely. If the CFPB decides to slim this scope, it might probably block third-party providers from accessing shopper knowledge, limiting it to the patron and the financial institution itself.
The latter would favor incumbents because it permits them final management. For fintechs, this may create a dangerous setting. The uncertainty would make it dangerous to take a position and construct APIs that may very well be restricted sooner or later.
Charge buildings: who pays for knowledge entry?
The second of the 4 points seeks to find out the optimum quantity of charges that banks ought to have the ability to cost in response to a customer-driven request. In consequence, knowledge entry could not be free for aggregators, which can require them and fintechs to reshape their enterprise fashions in response.
Charging for knowledge would permit banks to recoup compliance prices for API entry, however could obtain adverse consideration from fintechs and customers. Moreover, fintechs with already skinny margins could also be compelled to search for an exit.
Knowledge safety: weighing threats vs. advantages
The third of the 4 points the CFPB spotlighted is the menace and cost-benefit evaluation for knowledge safety related to complying with Part 1033. If the Bureau requires compliance with tighter safety necessities, all stakeholders will really feel the repercussions of tighter safety expectations.
With tighter compliance, small fintechs that beforehand had restricted compliance necessities could now have to step as much as larger requirements. This might finally result in consolidation, since massive, well-resourced companies would have the ability to extra simply meet compliance.
Knowledge privateness: the price of safety
The ultimate of the 4 points the CFPB spotlighted is the menace panorama surrounding knowledge privateness related to Part 1033 compliance. The Bureau could set new limits on how fintechs are allowed to monetize shopper knowledge in an effort to keep up their privateness.
With new guardrails on how they’re allowed to monetize shopper knowledge, fintechs could face limitations on utilizing knowledge for personalised advertising and marketing or different secondary knowledge makes use of. In consequence, innovation could decelerate, however customers could acquire extra confidence.
Your flip to remark!
The CFPB’s current name for feedback is greater than regulatory housekeeping. It’s extremely consequential and can decide the way forward for open banking within the US. The Bureau’s questions sign actual prices, dangers, and alternatives.
You will need to make your voice heard on these points! Within the six days that the remark interval opened, solely seven feedback have been submitted. Ship your feedback to the CFPB by October 10, 2025 at 11:59 pm EST.
Picture by Erik Mclean
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