In another case of fixing broken policies that sound good, but would actually backfire on consumers, the Trump administration is set to undo a Biden-era regulatory effort that affects the personal financial and data of nearly every American.  

In October 2023, Rohit Chopra, former director (under the Biden administration) of the Consumer Financial Protection Bureau (CFPB), proposed rules that would implement Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules were finalized in October 2024—just before President Trump’s historic reelection.

Section 1033 is meant to help consumers access their personal financial information. It mandates that “covered persons” (i.e., any entity offering consumer financial products or services, including banks, credit unions, and financial technology companies, aka “fintechs”) provide consumer information about transactions, accounts, and related data accessible if a customer requests. 

This Biden-era CFPB mandate forces financial institutions to share customer data with third parties, regardless of cost, security, or consent. Data-sharing is good in theory, but not when our security and privacy are sacrificed.   

The Chopra rule also requires banks and credit unions to create application programming interfaces (APIs), but prevents them from charging fintechs a fee to help offset the cost of investment in privacy security. And the data aggregators will profit from the consumer data they will ultimately monetize. 

All of these new regulations would have had negative unintended consequences for consumers. Without security safeguards, they would put sensitive consumer data at risk and increase compliance costs, which would be passed on to customers.

Thankfully, CFPB enforcement of Chopra’s final rule was frozen by a court order until new leadership under the Trump administration completes a new rulemaking process. 

The Way Forward

The Trump administration’s rule should not mimic Chopra’s final rule; otherwise, we would be left with the same situation. 

In fact, the administration should not be rulemaking unless critical issues are addressed (or left alone), such as not imposing fee bans and interfering in negotiated agreements between companies, consulting with relevant agencies such as the Federal Trade Commission (FTC) and federal banking agencies, banning processes such as screen scraping, and shoring up the liability process throughout the system if data breaches occur. 

The CFPB should take a narrow approach to interpreting Section 1033, not a broad sweeping perspective that regulators there have attempted to use to regulate beyond their limits. By exceeding the bounds of what Congress intended, the CFPB’s power has become too expansive. 

The CFPB should not be able to dictate how private parties should function in a free market or set prices that can hinder the market. 

We do not need redundant regulations to protect financial innovation. Banks and credit unions have already entered into agreements with fintech companies, such as data aggregators (e.g., Plaid), to transfer consumer data. For example, this might occur when a consumer connects to their bank account to pay rent.

The Trump administration also should not hinder financial innovation by imposing government-mandated requirements on fees that banks can charge to data aggregators. 

The market has been functioning well without these CFPB regulations. Inserting the CFPB into the mix will only disrupt the market by compelling private parties to follow the CFPB’s rules on liability instead of private agreements. This will increase compliance costs and make financial services more expensive for consumers. 

Bottom Line

Dismantling the CFPB has long been a goal for the conservative movement. It is finally within our grasp, as Acting Director Russ Vought has requested no further funding for the agency.

A new rule would claim sweeping new authority for the CFPB, just as we finally succeed in putting the agency on life support. Why would we create a new unfunded mandate for this rogue agency and breathe new life into it for the next administration to justify its resurrection?

Consumers are savvy enough to choose financial services that work for them. At Independent Women’s Voice, we hope the Trump administration will continue its trajectory in other areas of smart regulation that improve both freedom and customer safety.