WASHINGTON, D.C. – The Financial Technology Association (FTA) today filed a motion to intervene in the lawsuit brought by the Bank Policy Institute (BPI) and Kentucky Bankers Association challenging the Consumer Financial Protection Bureau’s (CFPB) Section 1033 open banking rule. By moving to intervene, FTA seeks to preserve consumers’ right to securely access and control their financial data in the digital age, helping ensure ongoing innovation and U.S. global competitiveness.
“Consumers must have the right to control their financial data. Strong consumer data rights are critical to America’s digital economy and are core to how Americans manage their money today,” said Penny Lee, President and CEO of the Financial Technology Association. “By suing to prevent consumers from exercising these rights, the nation’s biggest banks are trying to prevent competition and limit consumers’ ability to use the apps and services of their choice. We stand with consumers’ right to control their personal financial data and urge the Trump Administration to uphold this measure to promote innovation and competition.”
In 2024, the CFPB finalized a rule codifying open banking and protecting consumers’ right to securely access and share their personal financial data. The rule was over a decade in the making, formally launched during the first Trump Administration and finalized at the end of the Biden Administration. Born out of a desire to promote competition in financial services and to ensure consumer transparency and control, open banking touts bipartisan support and is a key driver of innovation in the U.S. economy.
However, the nation’s largest and most powerful banks are challenging personal financial data rights in an attempt to undermine innovation and limit consumers’ ability to access competing services. The BPI/Kentucky Bankers Association lawsuit threatens a return to the era of closed banking, where consumers cannot freely choose which digital financial apps and services they want to use. The Trump Administration must preserve critical consumer data rights, reaffirm that consumers’ data belongs to them, and ensure that financial innovation can flourish so the U.S. doesn’t fall behind.
Open Banking Powers the Digital Economy
Open banking is critical to how millions of consumers and businesses interact with their finances and the digital economy. It allows consumers to securely connect their bank accounts, credit and debit cards, and many other financial accounts to third-party apps and services. Eight in ten Americans have embraced open banking to access convenient, personalized financial services, such as loan rates, savings options, and credit products tailored to individual needs. Without these rights guaranteed, a consumer’s ability to access new and different financial services remains at the discretion of their bank.
Open Banking Helps Banks of All Sizes Compete
Three in four Americans want to be able to securely link their bank accounts to the apps and services of their choice. Today, thousands of institutions—including community banks and credit unions, Community Development Financial Institutions, and Minority Depository Institutions—rely on consumers’ ability to share financial data to connect to the world of financial apps and services. Open banking especially helps smaller institutions meet consumer expectations and remain competitive by offering better products, even without a big technology budget.
Strong Rules of the Road Raise the Bar for Safety and Security
When enforced, the 1033 rule will establish a higher bar for safety and security across financial services, moving the industry toward more consistent standards for data-sharing methods, additional oversight, and new requirements for consumer transparency and control. The 1033 rule encourages widespread adoption of APIs to facilitate data sharing and requires companies to certify compliance with information security and data minimization standards. These initiatives strengthen security and privacy standards across the industry. The 1033 rule allows banks to deny access if they believe a third party is not maintaining adequate data security controls. In addition to providing core guidelines, the rule also mandates the development of industry standards.
Personal Financial Data Rights Must Be Preserved to Ensure Competition
Personal financial data rights must be preserved to protect consumers’ ability to control how they bank, make payments, or manage their money. Without this guarantee, large and powerful financial institutions could block a consumer’s access to their own data, which is crucial to their ability to use products and services outside of what is offered by their primary bank. The lawsuit from the nation’s largest banks aims to maintain their market dominance and prevent Americans from benefiting from a competitive and diverse financial system.
Click here to read the declaration and motion to intervene filed in the United States District Court for the Eastern Division of Kentucky.
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The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.