"The U.S. open banking regulatory landscape has shifted dramatically as the Trump administration's CFPB retracted the Biden-era Section 1033 rule, calling it unlawful due to concerns about regulatory overreach, the lack of bank fees, data security risks, and unrealistic timelines. While the Biden-era CFPB was staunchly against banks charging fees for sharing data with fintechs, the new CFPB has signalled strongly that it will be formulating these fees into the new regulation."
"The pivot in direction and communication following the retraction seem to signal that the next formulation of the 1033 will favor traditional banks over fintechs. The change in the CFPB's attitudes towards the Open Banking regulation is exacerbating the rift between fintech and banks regarding 1033. Fintechs want easy no-fee access to consumer's data within banks, and banks don't want to build APIs that would enable data-sharing for free leading to fintech-focused trade groups accusing banks of anti-competitive behavior."
A retraction of the Biden-era Section 1033 rule by the CFPB under the Trump administration halted prior open banking regulatory momentum, citing unlawful overreach, absence of mandated bank fees, data security risks, and unrealistic timelines. The current CFPB signals intent to allow or calibrate bank fees for data sharing, a shift that advantages traditional banks. That shift deepens a fintech–bank rift: fintechs seek no-fee, easy access to consumer data while banks resist building free APIs. Both banks and fintechs are taking strategic actions, leaving open banking regulation uncertain and contested among three powerful stakeholders.
Read at tearsheet.co
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