Cynthia Lummis (R-WY), Chair of the Senate Banking Subcommittee on Digital Assets Chair, is asking the Consumer Protection Financial Bureau (CFPB) to keep intact the agency’s “open banking” rule.
“Congress passed section 1033 of the Dodd-Frank Act in 2010, requiring the CFPB to ensure consumers could access and own their own financial data. While I strongly oppose many provisions of the Dodd-Frank Act, the open banking section of this law is a bright spot,” Sen. Lummis wrote in a letter to CFPB Acting Director Russ Vought.
The letter was sent on the final day of the agency’s comment period on t rules covered under Section 1033 of the Dodd-Frank Act.
Pros and Cons
The Bank Policy Institute wants to see Section 1033 revised.
“Individual consumers should have secure and easy access to their financial data, and decades of investments from banks and fintechs have delivered exactly that,” Paige Pidano Paridon, BPI EVP & Co-Head of Regulatory Affairs,” wrote in submitted commentary. “The evidence is on every phone and personal device across America. The Biden Administration didn’t deliver open banking; it disrupted it by introducing regulatory uncertainty and security risks to a system that already works. The CFPB should right this wrong and deliver a free-market solution that follows the law and places consumers’ financial data security first.”
Sen. Lummis cited the following as benefits of the CFPB open banking rule:
- It enables access to financial services for rural communities via phones and computers. These tools make it easier to build credit with alternative scoring models that use transaction or banking data to prove ability to pay.
- Open banking supports small businesses and agriculture operations with better cash flow and credit access. Ranchers, farmers, and mom-and-pop shops across Wyoming often rely on seasonal or irregular income. Fintech tools can provide more flexible payment, financing, and invoicing options that align with that cash flow (e.g. verifying income in real time, dynamic credit) but only if consumers have control over their data to use these tools.
- It provides access to third-party tools that increase options so they can compare financial products like loans, credit cards, and savings, leading to the best possible transaction terms.
- Open banking helps automate payments, reduce travel and postage, avoid late fees, and enhance budgeting and fraud detection.
Additionally, there is only limited access to digital assets without open banking, Sen. Lummis wrote. “Many big bank CEOs like Jamie Dimon have made their opposition to digital assets very clear. Without clear open banking rules, they could prevent customers from connecting accounts to platforms like Kraken and Gemini and completely throttle consumer choice.”
Sen. Lummis concluded: “America is the home of financial innovation, and digital assets are the next frontier. We should welcome responsible builders, not bury them in red tape. When consumers have freedom and entrepreneurs compete fairly, we all win.”
