CFPB Set to Repeal Open Banking Rule Under Section 1033

May 28, 2025 - 17:33

The Consumer Financial Protection Bureau (CFPB) is moving forward with plans to repeal its Section 1033 Open Banking Rule, as revealed in a recent filing related to a federal lawsuit challenging the regulation. This decision marks a significant shift in the CFPB's approach to open banking, which was designed to enhance consumer access to financial data and promote competition among financial institutions.

The proposed repeal has sparked a range of reactions from stakeholders in the financial industry. Proponents of the rule argue that it is essential for empowering consumers by allowing them greater control over their financial information and fostering innovation among fintech companies. Critics, however, have raised concerns about the potential risks associated with data sharing, including privacy issues and the security of sensitive financial information.

As the CFPB prepares to move ahead with this repeal, the future of open banking in the United States hangs in the balance, with implications that could reshape the landscape of consumer finance and the relationship between banks and their customers. The ongoing legal challenges and public discourse surrounding this decision will likely influence the regulatory environment in the coming months.