What is CFPB Section 1033 and how will it affect financial institutions?

In October 2023, The Consumer Financial Protection Bureau (CFPB) proposed a groundbreaking rule, commonly referred to as Section 1033 or the Personal Financial Data Rights rule, which will impact how consumers interact with their personal financial data. This rule, rooted in the Dodd-Frank Act, is a cornerstone of the open banking movement, granting consumers unprecedented control over their financial data. As the CFPB gears up to finalize this rule in the fall of 2024, it’s crucial for financial institutions to understand its implications and prepare for the shift towards a more open and consumer-centric banking model.

Key features of CFPB 1033

• Consumer empowerment: Section 1033 aims to empower consumers by giving them the right to access and share their financial data (e.g., information associated with their credit card, checking, prepaid, and digital wallet accounts) with third-party service providers, such as fintech companies, at no charge. This access is expected to foster innovation, enhance competition, and provide consumers with more tailored financial products and services.

 

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