CFPB Open Banking Rewrite Could Put Data-Access Fees at Center of Section 1033 Fight

The Consumer Financial Protection Bureau (CFPB) is reconsidering a major part of its 'open banking' rules, specifically regarding Section 1033. The core issue is whether banks should be allowed to charge fees to third-party fintechs for accessing consumer financial data. Initially, the CFPB wanted these data transfers to be free. Now, they are exploring a middle ground that might allow banks to recoup costs. For retailers and service providers, this matters because it directly impacts the tools you use to approve customers. Many modern financing options—especially 'no credit check' or 'low credit' programs—rely on open banking to instantly verify a customer's income and bank balance. If banks start charging high fees to access this data, fintech lenders will likely face higher operating costs. These costs could be passed down to you in the form of higher merchant discount rates (MDR) or higher interest rates for your customers. Furthermore, this debate could slow down the adoption of seamless, one-click financing applications at the point of sale. If data access becomes a pay-to-play system, smaller, innovative lenders might struggle to compete with big banks. You should monitor this closely if your business relies on high-tech financing tools or BNPL providers that use bank-scraping technology to make instant credit decisions.

Source: PYMNTS

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