Introduction
In 2025, open banking is reshaping how U.S. consumers access and share financial data. Through secure APIs, banks and third-party providers can now exchange customer information with consent, empowering users but also raising new concerns about data privacy and consumer rights. Understanding these rights is essential as financial technology becomes more interconnected than ever.
Key Takeaways
Consumers gain more control over their financial data under open banking, but must remain vigilant about how it is stored and shared. New federal and state initiatives aim to standardize consent management, strengthen security measures, and ensure fair access to digital financial services.
Legal Basis
The Consumer Financial Protection Bureau (CFPB) leads U.S. efforts to regulate open banking through Section 1033 of the Dodd-Frank Act. In 2025, the CFPB’s proposed rule on personal financial data rights introduces requirements for data transparency, portability, and consumer consent. Additionally, states such as California are integrating open banking into their Consumer Privacy Acts, aligning financial and privacy protections.
Consumer Rights under Open Banking
1. Right to Data Access: Consumers can access and download their own financial information securely.
2. Right to Data Portability: They can transfer their data between financial institutions without losing history or facing unfair restrictions.
3. Right to Consent and Revocation: Users must be clearly informed about what data is shared and can revoke access at any time.
4. Right to Security and Accuracy: Financial institutions are legally obligated to ensure data integrity and protect against unauthorized access.
State-by-State Developments
California leads with its financial data privacy framework under the CCPA and CPRA, while New York and Illinois are developing state-level open finance bills. Some states are partnering with fintech associations to create unified consent platforms. Meanwhile, states with fewer fintech laws rely heavily on federal CFPB oversight.
Real-World Cases
In 2024, a fintech app faced scrutiny after collecting user transaction histories beyond authorized limits, leading to a CFPB enforcement action. The case highlighted the importance of explicit consent and clear disclosures in data-sharing practices within open banking ecosystems.
Step-by-Step Actions
1. Review consent settings — Regularly check which apps have access to your banking data.
2. Use official connections — Only link apps that use your bank’s verified API connections.
3. Revoke unused permissions — If you stop using a service, revoke its access immediately.
4. Check data accuracy — Verify your transaction and balance data across linked apps.
5. Report violations — File complaints through consumerfinance.gov if you believe your rights have been violated.
Why This Matters
Open banking promises innovation and convenience, but the tradeoff is greater data exposure. Clear consumer protections and legal safeguards are vital to maintain trust as fintech companies and banks collaborate to redefine financial access in the digital era.
FAQ
Q: What is open banking?
A: Open banking allows banks and third-party apps to share financial data securely with consumer consent, enabling better financial management tools.
Q: How does open banking affect consumer rights?
A: It expands control and portability of financial data but introduces new privacy and cybersecurity risks requiring strict legal oversight.
Q: Can I opt out of data sharing?
A: Yes. Consumers can revoke consent anytime through their bank or the connected app’s privacy settings.
Q: Are open banking rules mandatory in 2025?
A: The CFPB’s proposed rule is expected to finalize in 2025, making data sharing and protection standards legally enforceable across financial institutions.