The bipartisan passage of the GENIUS Act marked a watershed moment for American financial innovation, promising to close regulatory gaps, protect consumers, and secure the U.S. dollar’s dominance in the digital economy by establishing a clear framework for stablecoin regulation.
Yet, the transformative potential of this landmark legislation is now at risk. Without the implementation of a robust “Open Banking” rule (technically called “rule 1033”) much of the GENIUS Act’s promise could be undermined. Rule 1033 was designed by Congress to give consumers control over their financial data, increase transparency, and foster competition, all essential pillars of the GENIUS Act. If Rule 1033 is scuttled, as recent legal and regulatory developments suggest, the U.S. risks reverting to a fragmented, opaque system where consumer empowerment and fintech innovation stall. All leaving the GENIUS Act’s good work dangerously incomplete.
In their first term, the Trump team worked to plant the seeds we’re now seeing blossom in fintech. As a former senior advisor to the Director of the Consumer Financial Protection Bureau (CFPB) I saw firsthand how a thoughtful approach to regulation can empower consumers and drive innovation. Naturally I’m deeply concerned by recent murmurs suggesting a few big banks are pressuring the Trump administration to withdraw Rule 1033, the open banking rule. Such a move would not only betray a decade of bipartisan work to modernize financial access and consumer freedom but would also jeopardize the success of one of Congress’s most promising pieces of pro-consumer legislation: the GENIUS Act.
The GENIUS Act, recently passed by the U.S. Senate with broad bipartisan support, is a landmark bill that encourages competition in the banking and financial technology sectors by streamlining licensing, enabling better data interoperability, and reinforcing consumer choice. It’s a forward-thinking law aimed at breaking down data silos and empowering Americans to control and benefit from their own financial information. And it’s a critical step toward achieving President Trump’s goal of making the United States the cryptocurrency capital of the world.
But here’s the catch: without Rule 1033, the GENIUS Act is a car with no gas.
Rule 1033 is the legal and technical foundation for open banking in the United States. It requires financial institutions to give consumers secure access to their own financial data—something Americans have long lacked, despite the enormous advances in digital finance. It is the rule that codifies and protects the right to data portability in finance, enabling consumers to shop around, compare services, and switch providers with ease. It enshrines the idea that your own data belongs to you, not a bank.
That functionality is essential to realizing the GENIUS Act’s goals. The Act relies on an open, competitive marketplace where fintechs, credit unions, and community banks can offer competing services without being locked out by incumbent giants hoarding consumer data. For conservatives, the great surge in cryptocurrency adoption is fueled for many reasons. One is the debanking trend in which a few large banks denied service based on their political views. Another was when the coronavirus pandemic saw legacy financial institutions create new restrictions and hurdles to investment and accessing capital.
Digital currency was the decentralized answer. The Genius Act builds on those core conservative principles by returning more power and access to consumers. Repealing 1033 reverses that.
Of course, the concerns about cybersecurity, fraud, and regulatory overreach deserve attention. But the answer isn’t to walk away from the successful model in President Trump’s first term that put consumers in the driver’s seat. At the dawn of revolution in mobile tech, telecommunications giants resisted letting customers “port” their own phone numbers to a carrier of their choice. They argued that letting customers keep their numbers would be expensive and technically difficult. Until regulators exposed this attempt to keep consumers hostage, lock up their numbers, and limit their choices. Federal rules compelled cell phone companies to comply, resulting in improved quality, lower prices, and more choice. In short, consumers won.
1033 may unleash an even greater pro-consumer revolution.
The GENIUS Act and open banking is a once-in-a-generation opportunity to level the playing field in American finance. As someone who’s worked both inside government and in the private sector, I know how challenging it is to align the interests of consumers, regulators, and the marketplace. With Rule 1033 and the GENIUS Act, we’ve come remarkably close. Let’s not blow it now.
If we care about a competitive financial future that puts consumers first, we must finalize Rule 1033 and put open banking into action.
John Czwartacki, a former senior advisor at the Consumer Financial Protection Bureau, is co-founder and principal at Public Policy Solutions, a 501c(4).
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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