The Trump Administration has done a remarkable job so far working to reverse many of the worst consumer policies and rules imposed by the Biden Administration – particularly those that limited consumer choice and pushed progressive lifestyle choices onto everyday consumers by dictating what was available on store shelves or showroom floors. From rolling back burdensome regulations on household appliances and working to bring back plastic straws, to restoring sanity to auto rules so that consumers won’t be compelled by buy an electric car, the emphasis has been on freedom, flexibility, and respect for the consumer and their ability to choose for their family.
But the key to all of this has been how focused the Trump Administration has been on increasing choice for consumers, not just that the Trump Administration is rolling back existing rules. Not all regulations and rules are created equal and that means that not all deregulation is created equal, or good for consumers. Just consider how President Donald Trump set about to issue a new regulation in his first term to create a novel category of dishwasher, all to end-run the existing thicket of rules and allow consumers to have a dishwasher that worked in an hour or less.
With all the good that the Trump Administration is already doing to help consumers, it is important that effort isn’t wasted trying to pull back rules that truly empower consumers or offer them more choices, especially since woke mega-corporations have now figured out that they can try to claw back some power for themselves by pushing to undo pro-consumer rules.
A worrisome example of this is the Consumer Financial Protection Bureau’s (CFPB) Rule 1033, which is subject to a lawsuit by banking trade associations and is potentially on the new CFPB leadership’s chopping block, according to a recent legal filing. Wasting deregulatory energy and focus on Rule 1033 would be a mistake, one that could undercut the very principles of consumer choice that this administration has worked so hard to restore.
Rule 1033, also known as the “Open Banking Rule,” allows consumers to safely access their account information and share it with third-party financial services providers (think of rules that allow you to take your cell phone number with you when you change phone service providers). It is a required response to the mandates of the original Dodd-Frank Act that passed Congress in 2010, with the current rule being shaped by the first Trump Administration into something practical – balancing privacy with portability and giving consumers new leverage in a market dominated by legacy players – before being finalized in late 2024 under the Biden Administration. Put simply, if you have ever used an app and or online tool outside your bank to help you budget, automate your savings, shop around for lower fees or better savings rates, or compare mortgage offers, then it is likely you have enjoyed some aspect of Rule 1033.
Yes, Dodd-Frank caused its fair share of headaches. It empowered bureaucrats and imposed a one-size-fits-all approach to rules that imposed a huge set of costs and benefited the biggest players. But the first Trump Administration rightly focused on bending Dodd-Frank requirements toward empowering consumers, like they did with Rule 1033.
Vacating Rule 1033 now would be a massive reversal and an unforced error, wasting effort that could be deployed to something that helps improve consumers’ lives after four years of nonstop assaults on consumers and their ability to choose for themselves. It would also represent a huge win for the biggest banks, who have long been resistant to data portability, as they often benefit when customers are trapped by inertia, logistical difficulty, or thickets of rules.
At its most basic level, Rule 1033 is about making sure your banking relationship works more like your cell phone plan. You should be able to switch providers if you’re unhappy and take your history with you, because that puts the consumer in charge of the relationship.
And that is why voluntarily vacating Rule 1033 smacks of deregulation for deregulation’s sake – ripping out rules without stopping to fully comprehend that some of them, like Rule 1033 or the first Trump Administration’s one-hour-dishwasher rule, truly benefit consumers and improve consumer choice.
The second Trump Administration has built its agenda around restoring real choice – letting Americans buy the appliances they want, drive the cars they love, and live without interference from bureaucratic ideology. Voluntarily axing Rule 1033 would fly in the face of that agenda.
The CFPB should seriously reconsider vacating this rule. Not only does Rule 1033 embody the very ideals of choice and freedom that this administration has championed, it also gives American families more power to control their financial futures. That’s a principal worth protecting.