WASHINGTON, DC – FEBRUARY 10: The exterior of the Consumer Financial Protection Bureau (CFPB) headquarters is seen on February 10, 2025 in Washington, DC. According to media reports, CFPB employees were notified that the headquarters would be closed and that employees were required to work from home. (Photo by Anna Moneymaker/Getty Images)
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The Trump administration is on the verge of making a big mistake. See speculation that the Consumer Financial Protection Bureau (CFPB) simply intends to amend Rule 1033 in a way that still limits the ability of US banks to charge a market rate for the customer data they have collected at great cost.
Currently, Rule 1033 requires financial institutions to provide free consumer data to authorized third parties and fintechs. While the Trump administration apparently plans to amend the flawed rule again, the price controls that were part of the original Rule will remain. Which requires a short digression.
Specifically, you can’t love savings and despise banks. It’s that simple.
While savings options are growing by the day, the vast majority of Americans continue to store their savings in traditional checking and savings accounts provided by major banks. It’s the markets at work.
Moreover, it is a reminder of how much pressure US banks are under. In the midst of fierce competition, they have chosen to protect what is most valuable: the financial fruits of customers’ labor. And savings placed in the care of banks continue to grow.
Amid this growth, banks continue to spend huge sums to protect their customers’ savings from all manner of fraudsters intent on devising ways to separate Americans from their savings. By placing an increasingly expensive and impenetrable wall around Americans and their savings, banks have effectively and understandably developed a significant amount of knowledge about their customers.
This is understandable because learning about customers as a way of meeting and Mr Their needs are as old as business. It’s vital because the more US banks know about their customers, their buying habits and general trends, the better they can protect them from fraud artists.
Translation, by spending tens of billions to protect the wealth entrusted to them, banks are investing not only in a better future of wealth for customers, but also developing much better ways to protect their customers from fraudsters who are relentless when it comes to devising ways to shrink their wealth.
By reinstating Section 1033, the Trump administration should be applauded for recognizing the above truth. By revising the unacceptable rule that says banks must spend tens of billions to create critical information they must give to third parties for free, the Trump administration is improving on an unfortunate trade situation. This is because price controls are always and everywhere problematic precisely because they increase the cost of providing the good you want to the market.
In this case, fintechs and other authorized third parties very much want the customer data produced by the banks, clearly profit from it and want more of it. Banks do not dispute any of this and in no way want to limit the careful dissemination of customer information. They just note that this data is expensive to generate and because it is, they can’t give it away for free.
This is why it is so wrong for the same Trump administration to tacitly acknowledge the folly of price controls to let them remain somewhat. See above.
Just as you can’t love savings and hate banks, you also can’t penalize customer data while penalizing the entities that provide the data. We hope the Trump administration will keep the past truth in mind as it approaches a long-awaited Rule 1033 overhaul.
