What’s Happening: Draft Open Banking Rule Expected Soon
The Consumer Financial Protection Bureau (CFPB) is expected to issue a Notice of Proposed Rulemaking (NPRM) on the Section 1033 open banking rule soon. Section 1033 affirms that financial data belongs to consumers – not financial institutions – and allows millions of Americans to securely connect their bank accounts to the apps and services of their choice.
What’s at Stake: Innovation, Affordability, and Americans’ Financial Freedoms
Open banking is foundational to a competitive, dynamic, and low-cost financial system. Open banking connectivity gives Americans the freedom to control their finances and use the services they trust, not just the ones their bank allows. Secure, fee-free data access and sharing not only benefit consumers and competition today but also unlock future innovation, enabling new market entrants to compete with legacy providers and build the next great financial tool.
But this progress is under threat from a small group of the nation’s largest banks. If their efforts to restrict open banking rights and charge data access fees are successful, these costs will be passed directly on to American consumers and small businesses who rely on easily accessing and sharing their financial data to live their best financial lives. At a time when affordability is a top concern for Americans and their families, these fees could mean higher, prohibitive prices for getting credit, funding a crypto wallet, using a budgeting app, or paying for everyday needs like sending money to a babysitter or splitting a bill.
Key Priorities for the Open Banking NPRM
During the initial comment period on the open banking rule, the CFPB received thousands of comment letters urging it to oppose big bank fees and protect American consumers’ right to access and share their financial data with the apps and services of their choice. As the CFPB prepares an NPRM, the Bureau can uphold secure, open, and fee-free access to Americans’ financial data in several ways:
- Preserve access and competition by affirming the established definition of “consumer” so that individuals and their authorized representatives can securely access their financial information. Congress defined “consumer” to include “an individual or an agent, trustee, or representative acting on behalf of an individual.” The Bureau should apply the plain meaning of “representative” and avoid narrowing it to fiduciaries, which would incorrectly collapse the term’s meaning and render the additional terms “agent” and “trustee” duplicative.
- Maintain the prohibition on data access fees: Section 1033 of the Dodd-Frank Act is clear: financial institutions “shall make available” covered consumer data “upon request” to the consumer and their authorized representatives, not upon a fee. This mandatory language establishes a fundamental legal entitlement, not a conditional right contingent upon paying access fees. Keeping the fee ban in place is also a clear affordability win, protecting competition and supporting broader access to financial services.
- Expand the Scope of Covered Data: Consumers will enjoy the greatest benefit from open banking when they have access to a holistic view of their financial lives. While the initial rule covered only transaction and deposit accounts, we encourage the Bureau to expand the scope of the new rule to include brokerage, mortgage, auto, and personal loans; savings and pension funds; government benefits; payroll; telecom; utility; and government-related accounts.
- Safeguard Responsible Uses of Data for Innovation and Fraud Prevention: Hindering companies from being able to use open banking data to improve and develop products would have far-reaching negative impacts on consumers. A rule must avoid cementing a leg up for incumbent financial institutions, which do not face the same restrictions. We support protections for data minimization, consumer transparency, and control, and encourage the Bureau to level the playing field and allow for secure, consumer-transparent uses of data, which would enable research and development, spur fraud prevention, and help improve and develop products for consumers.
How We Got Here: Issue Timeline and Resources
There is broad support across industries – fintech, crypto, Main Street businesses, and innovative banks – for consumer data rights and against bank fees. Below is a timeline of key inflection points in the open banking rule.
- November 18, 2024: The Consumer Financial Protection Bureau (CFPB) finalized a rule reinforcing open banking and protecting consumers’ right to securely access and share their personal financial data. The rule was over a decade in the making and was formally launched during the first Trump Administration.
- However, the same day the rule was finalized, the Bank Policy Institute – a trade group representing the nation’s largest banks — filed suit to block the rule in an attempt to undermine innovation and limit consumers’ ability to access competing services.
- February 12, 2025: The Financial Technology Association – a trade group representing leading fintech companies – moved to intervene in the case to uphold open banking and consumer data rights. FTA’s motion to intervene was granted on May 14.
- July 11: It was reported that JPMorgan Chase would begin charging extremely high fees for data access, taking advantage of regulatory uncertainty surrounding the rule to crush competition and cement its market position. Other banks indicated that they supported JPMorgan’s moves and might follow suit.
- July 24: A coalition of fintech, crypto, and Main Street business trade groups urged President Trump to uphold open banking amid anti-competitive moves from some of the nation’s biggest banks.
- July 29: A few days later, the CFPB requested a stay in the open banking case, citing “recent events in the marketplace,” and indicated it intended to reopen and revise the rule instead by issuing an Advance Notice of Proposed Rulemaking (ANPR) within three weeks. The judge subsequently approved the stay in litigation.
- August 14: Over 80 CEOs representing a broad cross-section of the American economy signed a public letter urging President Trump to take action as fees were expected to impact the market in September.
- August 21: The CFPB released an Advance Notice of Proposed Rulemaking (ANPR) soliciting comments and feedback to guide reopened rulemaking.
- September: JPMorgan Chase reached some agreements on consumer data access fees, a development that underscores the anti-competitive ability of the nation’s largest banks to set a new market floor during a period of regulatory uncertainty.
- October 9: FTA hosted a live Open Banking Town Hall with Andreessen Horowitz, Ambrook, MX, Y Combinator, and former Rep. Patrick McHenry about what is at stake if we lose open banking.
- October 21: The comment deadline closed on the Section 1033 rule. Over 14,000 comments were received, including from a coalition of joint fintech, crypto, and Main Street business trades, as well as thousands of American consumers, financial experts, and business leaders.
- October 29: Judge Danny Reeves issued a preliminary injunction order staying the compliance deadlines for the existing rule and enjoining enforcement of the rule while the CFPB undergoes its current rulemaking process.
- December 26: FTA filed a notice of appeal in the Eastern District of Kentucky, as we respectfully disagreed with Judge Reeves’s preliminary injunction ruling. The CFPB filed its own notice of appeal on the same day.
To learn more, explore FTA’s open banking advocacy hub.
ABOUT US
The Financial Technology Association (FTA) is a network of fintech industry leaders shaping the future of finance. We champion financial innovation and advocate for policies that expand competition, access, and opportunity.