The Consumer Financial Protection Bureau wants to empower you. However, its Section 1033 rule — issued at the end of the Biden administration — does the opposite. As a way to expand access to financial data and boost competition, the rule introduces a dangerous mix of central planning, regulatory overreach and real threats to consumer privacy.
What's at stake isn't just how your financial data is shared — it's whether markets or bureaucrats will control the future of financial innovation. Thankfully, even the CFPB is
At its core, Section 1033 mandates that banks and financial institutions share consumer data, like balances and transaction histories, with third parties such as fintech apps whenever a consumer gives permission. But instead of letting the private sector continue to develop secure, consumer-driven solutions for data sharing, as it already has, the CFPB's final rule as written would instead impose a rigid, one-size-fits-all framework dictated by Washington.
This is central planning dressed up as consumer choice.
Market innovation already works. The private sector has long been ahead of the CFPB in this area. Financial institutions have developed secure application programming interfaces and competitive partnerships that allow consumers to share their data with fintech providers on their terms. These tools were built voluntarily, not mandated by the state.
However, rather than support this bottom-up innovation, the CFPB's rule disrupts it. It forces every player to comply with a uniform system that ignores the flexibility and security tailored by the marketplace.
One of the most serious threats in the CFPB's approach is to your privacy. Once a consumer gives permission, banks must send sensitive data — such as transaction histories — to third parties. But after that data is handed off, the CFPB does not enforce consistent or strong security requirements for what happens next. It's essentially saying: "Good luck."
That's not empowerment. That's abandonment.
This kind of policy increases the risk of data breaches and misuse. It also erodes trust between consumers and the institutions they rely on. After years of market-driven improvements in digital security, this top-down model threatens to roll back those gains — and leave you more exposed.
The bank, which has spent years building an advanced data sharing system, says market forces will drive the project more than political support.
Beyond the privacy issue, Section 1033 sets the stage for hidden price controls. By dictating who must share what data, and how, the government is determining the cost structure of digital finance—not the market. This imposes massive compliance burdens, especially on smaller institutions and new entrants who must shift resources from customer service and innovation to government paperwork.
That means higher costs that eventually get passed on to consumers — not through explicit fees, but through stagnation: fewer product upgrades, fewer competitors and less incentive to deliver better experiences. That's how price controls work in practice — they freeze the market and pick winners.
A better path is to let the market lead. True consumer empowerment doesn't come from regulatory mandates. It comes from choice. The financial technology space is one of the few remaining areas where that's still working. Consumers can compare apps, switch services and find the best experience for their needs.
Section 1033, as written, does not represent modernization. It pivots back to a command-and-control model in which bureaucrats decide how markets function.
As the CFPB under acting Director Russell Vought rethinks this rule, we should welcome the shift in tone from the previous regime. Having worked under Russ, I know he understands that markets, not mandates, deliver real results. But let's be honest: Section 1033 is still bad law even with better implementation.
It's a relic of a flawed law that centralized too much power in the name of consumer protection while creating some of the most unaccountable bureaucracy in the federal government. The CFPB's rule doesn't fix a broken system; it imposes one. That's not choice — it's control.
People and providers should decide the future of finance, not regulators in D.C.
