HOW CFPB’S RULE 1033 COULD AFFECT DATA RIGHTS AND OPEN BANKING BY BRADLEY WALLACE, DIRECTOR OF COMPLIANCE, CSI The Consumer Financial Protection Bureau (CFPB) estimates that 100 million consumers have authorized third parties to access their data. That data drives endless business decisions and capabilities, but financial institutions and technology developers must also be aware of regulations regarding consumers and their rights over their data. One such proposed regulation, Rule 1033, would require financial institutions and other data providers to help consumers access and share their data securely using application programming interfaces (APIs). What is CFPB’s Rule 1033? Section 1033 of the Consumer Financial Protection Act of 2010 was sent for comment in October 2023 and is expected to be finalized in the fall of 2024. This proposed rule would require depository and non‑depository entities to: • Make available to consumers and authorized third parties certain data relating to consumers’ transactions and accounts. • Establish obligations for third parties accessing a consumer’s data, including important privacy protections for that data. • Provide basic standards for data access. • Promote fair, open and inclusive industry standards. Compliance dates for this rule will be staggered based on institutional asset size, ranging from six months to four years from the date of the final rule publication. Rule 1033’s Potential Impact on Financial Data Rights The proposed rule is designed to address challenges with open banking by defining the: • Scope of data that third parties can access on a consumer’s behalf. • Terms on which data is made available. • Mechanics of accessing the data, proposed to be consumer permission based. It seeks to impose a framework in which data transfers occur via APIs instead of existing methods, such as screen scraping or credential sharing. Data providers would be required to maintain a digital interface for consumers and developers, both of which must meet certain 18 In Touch
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