If we want to protect consumer privacy, strengthen innovation and restore competitive markets, then the path forward is clear: repeal the Consumer Financial Protection Bureau’s Section 1033 rule — and shut down the CFPB.
For too long, the CFPB has served not as a neutral regulator but as a tool for centralizing power in Washington and forcing private actors into government-designed frameworks. Its most recent attempt, the Section 1033 “open banking” rule, is a case study in bureaucratic overreach.
Congress included Section 1033 in the Dodd-Frank Act to ensure that consumers could access their financial data. It was never intended to mandate how that data must flow across the financial system or to give third-party firms free access to private infrastructure.
In 2024, the CFPB finalized the Section 1033 rule that did just that. It required banks and credit unions to hand over consumer data to third-party apps and aggregators — without compensation, without clear liability standards and without meaningful accountability.
The rule also mandated the development of costly application programming interfaces (APIs) systems while prohibiting firms from charging fees to recover those costs. That’s not consumer empowerment. It’s regulatory coercion.
This rule is economically flawed, legally unsound and strategically dangerous. It turns a competitive, contract-driven market into one governed by federal mandates and price controls. That should concern anyone who believes in economic freedom.
It gets worse. The CFPB’s rule imposed one-sided liability, holding banks responsible for consumer data even after it leaves their systems, while allowing aggregators to operate under minimal regulatory scrutiny. This distortion undermines trust, weakens cybersecurity, and makes consumers more, not less, vulnerable.
Thankfully, a federal court froze the rule, citing concerns about statutory overreach, arbitrary compliance deadlines and inadequate consideration of the risks. The Supreme Court’s ruling in Loper Bright v. Raimondo only reinforces the judgment: agencies like the CFPB cannot interpret vague statutes to justify sweeping power grabs. The text of Section 1033 does not authorize the kind of regime the CFPB attempted to impose.
Meanwhile, the real market is working. Today, more than 200 million accounts are linked through private, voluntary agreements between financial institutions and fintech companies. Standardized APIs developed by the Financial Data Exchange serve tens of millions more. Secure data-sharing has improved, screen scraping is declining, and consumers have more tools than ever to manage their finances — all without federal intervention.
As the Southwest Public Policy Institute shows in its latest analysis, the U.S. financial data ecosystem has evolved organically, and in many ways, more successfully than the top-down, government-imposed models seen in other countries. That ecosystem works because it is based on property rights, private contracts and market pricing. The CFPB’s rule would override all three.
This brings us to the larger point. The problem isn’t just Section 1033 — it’s the CFPB itself.
Created by the Dodd-Frank Act, the CFPB was designed to be independent of congressional appropriations and has operated with little accountability. Over time, it has used this freedom to stretch its mandate, pick winners and losers in the marketplace, and substitute administrative fiat for real-world economics. Its rules have discouraged investment, raised compliance costs, and made financial products more expensive for working families.
When I served at the White House Office of Management and Budget, I worked under the Russ Vought, who now leads the CFPB. He has already requested no new funding for the bureau — a smart move. Reviving the agency through a new Section 1033 rule would only invite the next administration to expand its powers again.
The CFPB is not needed to protect consumers. We already have strong laws on fraud, privacy and financial transparency. What we don’t need is a Washington-based regulator trying to engineer outcomes that the market has already solved more efficiently.
If we believe in consumer choice, innovation and limited government, then we should do two things: repeal the Section 1033 rule and wind down the CFPB once and for all.
We don’t need regulators telling consumers how to bank. We need to let consumers decide which services meet their needs — and let firms compete to provide them. That’s how real innovation happens. That’s how markets thrive. And that’s how we protect the freedom to prosper.