CFPB's Section 1033: Why Compliance is the New Competitive Advantage
The financial services landscape is undergoing a fundamental shift. At the center of this transformation is Section 1033 of the Consumer Financial Protection Act—a regulatory requirement that's not just changing how financial institutions handle data access, but redefining the entire relationship between banks, fintechs, consumers and personal data.
Enacted as part of the Dodd-Frank Wall Street Reform Act, Section 1033 establishes a fundamental principle: consumers have the right to access and control their personal financial data.
While this regulation is U.S.-specific, the underlying principles of consumer data rights are emerging globally. The EU’s GDPR and PSD2, UK’s FIDA and Open Banking, and similar initiatives across Asia-Pacific all share common themes: consumers should control their data, and organizations should facilitate rather than gatekeep that control.
The CFPB’s Section 1033 regulation enforces this by mandating that financial institutions must make available to consumers, upon request, information concerning consumer financial products or services in a usable electronic format. While this might sound straightforward, the implications are profound because it demands that this access be:
- Timely: Consumers shouldn't have to wait weeks for their own data
- Comprehensive: All relevant financial information must be accessible
- Machine-readable: Data must be provided in formats that enable portability and third-party innovation
- Secure: Access mechanisms must protect consumer privacy and prevent unauthorized use
The rule could be a watershed moment for consumer data rights in the US, but financial institutions face two major concerns: 1) near-term regulatory uncertainty about what the final rule will actually require, and 2) strategic risk that other players in the financial data ecosystem take advantage of the letter of the law to undermine its intent. Together these questions put at risk both banks’ bottom lines and the intended benefits of Rule 1033 on consumers’ data rights. But with the right technology choices, financial institutions can protect themselves and their consumers.
What Rule 1033 Actually Demands from Bank Technology Systems
Rule 1033 is the result of years of back-and-forth between regulators at the CFPB and the financial industry. That work culminated in a “final” version of the rule published in October 2024. The industry’s leading standards body for financial data — the Financial Data Exchange (FDX) — raced to reflect the details of the rule in latest version of their API spec, released in the spring of 2025.
Almost immediately, the industry was thrown back into uncertainty when the CFPB announced it would drop the rule as written and instead solicit more feedback with the intention of producing a rewritten version of 1033. But until that happens, the biggest banks are in limbo as to their legal obligations and the date of regulatory implementation.
So banks face a seemingly impossible dilemma: race to update their data infrastructures to comply with the latest industry API specs by June 2026, while also maintaining the flexibility to shift that infrastructure on a dime if the revised version of 1033 changes the rules of the game yet again.
And the demands of the latest FDX spec are not trivial. To meet API requirements, banks will have to introduce features like granular controls for sharing data, dynamic duration for data access, and the ability for consumers to revoke consent from 3rd-party data sharing. These requirements already push most data infrastructures to their breaking point — bank infrastructures were built around systems of record for tens of millions of customers, not around per-user consent and granular data sharing with 3rd-parties.
The Solution: Turn Compliance Into Competitive Differentiation
The answer to the dilemma is to break out of a paradigm that attempts to achieve compliance through APIs built atop centralized backends. In this paradigm, every tweak to the regulations introduces breaking changes to banks’ APIs, which cascades through layers and layers of legacy infrastructure.
This is exactly why Inrupt is working with financial institutions on a Solid-based architecture that keeps consumers at the center by design. Our technology introduces a composable, reusable set of functionality for data access, consent, and granular control that can be exposed across multiple APIs and use cases. Since the Solid protocol was designed from the start to meet and exceed consumer data laws like Rule 1033, changes to the specifics of such rules become little more than configuration changes for the organizations required to implement them.
Rule 1033 intends to establish consumer rights to data, protect consumers, and encourage innovation. By giving consumers the power to access and share their data, they can seamlessly integrate their financial information with other institutions or fintech applications—from personal financial management tools to digital payment platforms. To protect consumer privacy, the regulation mandates that all data sharing must occur with explicit consumer consent.
While this framework appears straightforward in principle, the current reality of the financial data industry reveals a troubling gap between regulatory intent and practical implementation. Today, consumers who simply want to connect a budgeting app to their bank account find themselves confronted with an 80-page terms and conditions document from a financial data aggregator like Plaid or MX—intermediaries they likely have never heard of and certainly didn't intend to engage with directly. The binary choice of "I agree" or lose access to the service hardly constitutes meaningful consent.
This dynamic places banks in an increasingly untenable position. Financial institutions genuinely want to comply with the CFPB's rule and empower their customers with the data access they deserve. Yet they simultaneously need to protect both their customers and themselves from exploitation by data-hungry intermediaries that operate under far less stringent regulatory oversight than banks themselves face. The asymmetry is stark: while banks invest billions in compliance and face severe penalties for mishandling data, aggregators often operate in regulatory gray areas with business models built on maximizing data collection and monetization.
This is where Inrupt's architecture fundamentally changes the equation. Rather than treating consent as a mere checkbox exercise, Solid was designed from inception to deliver on both the letter and spirit of regulations like Rule 1033 while minimizing operational burden on financial institutions. The technology enables granular consent controls with purpose limitations cryptographically encoded into access tokens—all presented to end users through intuitive interfaces that make data sharing decisions genuinely comprehensible.
By implementing this approach, banks can redefine what "informed consent" truly means in practice. They can dramatically narrow the gap between what consumers intend to do with their data and the broad permissions they're currently forced to grant. Instead of wholesale data access to intermediaries, banks can enable precise, purpose-bound sharing directly with the services consumers actually choose to use. This transforms compliance from a defensive necessity into a competitive differentiator—positioning forward-thinking institutions as the true guardians of their customers' financial data rights.
Getting Started: Must-Have Implementation Strategies
Section 1033 compliance timelines create pressure for rapid deployment, and adoption of Inrupt’s Solid-based architecture enables this with technology foundations and capabilities designed to solve the issues driving regulations.
The optimal implementation of this approach involves:
- Start with Consumer Value: Rather than asking "What's the minimum we need to do for compliance?" ask "How can we use data rights to create better consumer experiences?"
- Pilot Programs: Start with non-critical data sharing use cases to validate operational procedures and security controls before expanding to core banking functions.
- Hybrid Architecture: Maintain existing compliance systems while building Solid capabilities, allowing gradual migration as the ecosystem matures and regulatory guidance clarifies.
- Vendor Risk Assessment: Evaluate Solid infrastructure providers using existing third-party risk management frameworks, particularly focusing on operational resilience, incident response capabilities, and regulatory examination readiness.
- Invest in Scalable Architecture: Point solutions might address immediate compliance needs, but they create technical debt. Solid's architectural approach provides a foundation for long-term innovation.
- Consider Global Requirements: Even if you're only operating in the U.S. market today, building for global data rights standards future-proofs your infrastructure investment.
- Measure Beyond Compliance: Success metrics should include consumer satisfaction, operational efficiency, and innovation velocity—not just regulatory checkboxes.
The Path Ahead with Inrupt & Solid
Rule 1033 represents more than a regulatory requirement—it's a signal of the fundamental recognition of the primacy of consumer-controlled data rights for the health and success of the market. The financial institutions that will thrive in this new environment are those that embrace this shift as an opportunity rather than viewing it as a burden.
Inrupt's Solid-powered technology provides the architectural foundation for this transformation by putting individuals in control of their data while providing enterprises with secure, scalable access mechanisms and opportunities for innovation not previously possible. With this approach, compliance becomes a competitive advantage for businesses and feels like empowerment rather than accommodation for their customers.
Rule 1033 is just the opening move in a market driven transformation toward technically enforced consumer data rights, like saying clocks and scales should be standardized for the trains to run on time. The institutions that deploy ESS today won't just meet current compliance requirements - they'll help define what consumer data protection looks like in the coming financial services evolution.
The future of financial services belongs to institutions that understand that consumer data rights aren't a constraint to be managed, but a foundation for innovation. With Solid, that future starts today.
Will your institution be part of the movement to define and exceed future requirements, or scramble to meet them?
Interested in learning more?Contact us to schedule a briefing and discover why leading organizations are choosing Inrupt to build compliant, innovative, and user-centric relationships with consumers.