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With Section 1033 in limbo, banks’ proposed charges for account data access highlight legal ambiguities and regulatory gaps that could shape the trajectory of open banking policy in the US.
Last week, the Financial Technology Association (FTA) wrote to President Trump, urging him to use the “full power” of his administration to block the fees, which are set to come into effect in September.
“Large banks are taking aggressive action to preserve their market position by imposing exorbitant new ‘account access’ fees that would prevent consumers from connecting their accounts to better financial products of their choice,” the association said.
“This access is critical to ensuring Americans have control of their own financial lives in a digital economy.
“More fundamentally, they are advancing a dangerous legal interpretation that a consumer’s right to their account information does not include the freedom to share access to a trusted application acting on their behalf.”
Last month, large banks including J.P. Morgan Chase began informing fintech partners that they will soon be applying new charges for access to customer account data.
The banks believe they are on firm legal ground to do so following the decision of a federal judge to stay Section 1033, a foundational open banking rulemaking under the Dodd-Frank Act.
Adopted by the Consumer Financial Protection Bureau (CFPB) under President Biden, the rule requires banks to provide consumers and authorised third parties with access to account information through secure, standardised APIs.
However, it prohibits the imposition of fees for accessing this data, an arrangement that US banking interests have argued since day one is unlawful.
In October 2024, on the day the rule was finalised, plaintiffs including the Bank Policy Institute (BPI) filed a motion to vacate the rule on the basis that it exceeds the CFPB’s statutory authority and endangers consumer privacy, financial data and account security.
Banks warn of consumer harm, unintended consequences
The FTA’s letter was signed by more than 80 CEOs, representing a broad spectrum of financial, technology, retail and data companies.
These include major non-bank payments firms such as PayPal, Stripe and Adyen; crypto firms Gemini and Kraken; and fintechs such as Plaid, Shopify, Klarna and Robinhood.
According to the FTA, together these firms represent three areas that will be “critical” to future innovation in the US, namely AI, cryptocurrency, and digital wallets and payments.
The FTA argues that the banks’ proposed fees would “choke off” access to financial services for consumers while “killing” competition and “crippling” innovation.
For example, by hindering access to third-party digital wallets, banks would stifle the growth of low-cost, innovative payment services, reinforcing reliance on legacy networks.
Similarly, the potential of personalised AI agents to help consumers manage their finances and find better deals would be held back by increased costs.
And cryptocurrency businesses would be deprived of “safe, reliable” on-ramps that connect US banks to the digital asset ecosystem, driving innovation and investment offshore.
“Account access fees are not permitted under the law, and if they are allowed to go into effect, it will undermine the pro-innovation consensus your administration is building,” the FTA wrote to President Trump.
“This is a defining moment. We cannot allow the most powerful, entrenched banks to close the door on a more open and modern financial system.”
An attempt to ‘mislead’ the US president
In response, the US banking community accused the FTA of attempting to “mislead” the Trump administration as to the nature and the legality of the proposed fees.
In a joint statement, the BPI, the American Bankers Association (ABA) and the Consumer Bankers Association (CBA) accused the FTA of attempting to “undermine free markets” and engage in “government pricing fixing”.
“Today’s letter is another extraordinary example of data aggregators and middlemen trying to mislead the administration into supporting Biden-era policies for personal profit and the right to free ride off the major investments banks have made in protecting consumers’ data,” they said.
“The double standard these companies want to perpetuate, where they may charge fees for a service while banks are expected to provide the same service to these private companies for free, is absurd.”
The banking associations pointed out that charging for API access is “standard” among almost all major technology companies, including Amazon Web Services (AWS), Microsoft Azure, Google and X (formerly Twitter).
They also noted that many of the companies whose CEOs signed the FTA letter also charge third parties for API access.
The legality question: Section 1033 remains in limbo
The question as to whether the charging of account access fees at this time is “legal” comes down to how last month’s stay of the appeal against Section 1033 is interpreted.
On July 29, it was CFPB itself that petitioned the court to stay the litigation, on the grounds that it intends to initiate a new “accelerated” rulemaking process within the next three weeks, which will lead to a “substantially revised” rule.
Judge Danny Reeves granted the stay on the condition that the CFPB will provide the court with a status update on its progress every 45 days.
However, despite the planned rulemaking, the order to stay did not address compliance expectations with respect to the existing rule, which is set to come into effect for the largest banks in the summer of 2026.
For this reason, the plaintiffs filed another motion last week in an effort to clarify the current compliance expectations for firms under Section 1033.
The motion requests the court to stay the compliance deadlines associated with Section 1033 and enjoin the rule’s enforcement until one year following the conclusion of litigation.
“If the rule’s compliance deadlines are not stayed, plaintiffs and their members face imminent and irreparable harm in the form of the unrecoverable costs they will expend to come into compliance with the rule,” the motion states.
“As courts widely recognize, such compliance costs constitute irreparable harm because, even if the rule is ultimately vacated (or replaced), plaintiffs and their members cannot recover such costs as damages.”
With the Section 1033 rulemaking still technically in place, this is likely to remain a grey area for firms until it is either enjoined, rescinded by the CFPB or until the revised version is introduced.
