The Impact of CFPB’s New 1033 Rule on Financial Services
Blog post from Socure
Finalized in October 2024 under Section 1033 of the Dodd-Frank Act, the CFPB’s “open banking” rule gives consumers the right to access and authorize secure sharing of financial information, including account, transaction, credit card, and digital-wallet data, with third-party providers. Designed to reduce customer lock-in and promote competition, the rule is expected to support fintech products such as budgeting, payments, and personalized financial-management tools through API-based data sharing, echoing open-banking frameworks such as the EU’s PSD2. It also requires providers to verify third-party authorization, restrict unauthorized uses such as advertising or cross-selling, and allow consumers to revoke access, though banks and industry groups have raised concerns about liability, third-party oversight, implementation costs, and cybersecurity risks. Larger financial institutions must comply by April 2026, while smaller entities have until 2030, requiring many traditional banks to expand their API, security, and compliance infrastructure.
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