Originally published at The Daily Economy. 

​Washington never misses a chance to promise “fairness” while tightening its grip on the financial system. For more than a decade, regulators and central bankers have stretched their authority far beyond the original intent of the law, distorting markets, punishing savers, and concentrating economic power in the hands of bureaucrats. 

The latest example is the Consumer Financial Protection Bureau’s Section 1033 rule, which marks a new front in Washington’s quiet campaign to nationalize financial data under the guise of “consumer empowerment.”

Section 1033 was intended to help consumers access their financial information. In practice, the Biden-era CFPB twisted it into a sweeping mandate that forces banks, credit unions, and fintech companies to share customer data with third parties, regardless of cost, security, or consent. Regulators call this “data portability.” But it’s really data coercion, forced transfer of private information directed by the government. 

By compelling institutions to open their systems to outside actors, the CFPB is creating massive cybersecurity risks and legal uncertainty. Once that data leaves a secure bank environment, who’s responsible if it’s hacked or sold? The agency doesn’t say, because it doesn’t have to. It operates as a mostly unaccountable branch of government funded by the Federal Reserve.

This new rule fits a pattern that stretches across administrations of both parties. 

The Federal Reserve has spent years manipulating the economy through its own version of central planning. Its balance sheet exploded from about $4 trillion before the COVID lockdowns to nearly $9 trillion at the peak, and even after years of “tightening,” it still sits around $6.6 trillion, roughly 20 percent of US GDP. That extraordinary expansion, coupled with record federal deficits, monetized Washington’s overspending and triggered the inflation surge Americans are still feeling today. 

The Fed’s interventions distorted credit markets, inflated asset prices, and fueled the illusion that easy money could substitute for productivity. The result has been slower growth, declining real wages, and a public that no longer trusts the dollar — or the institutions that manage it.

At the same time, agencies such as the Federal Deposit Insurance Corporation have extended open-ended guarantees to ever-larger deposits up to $250,000, signaling to financial institutions that risk doesn’t really matter because taxpayers will always clean up the mess. The more Washington insulates these institutions from market discipline, the more reckless behavior it encourages. That’s not consumer protection; that’s moral hazard on a national scale.

The CFPB’s Section 1033 rule compounds that problem by politicizing access to financial data. It hands Washington the ability to dictate not only how money moves but also how information about money moves. 

Once regulators can decide which companies may access data and on what terms, they effectively control the competitive landscape of American finance. This is industrial policy in digital disguise. And it’s already spilling into state politics, where legislators are introducing new caps on credit card interest rates, limits on interchange fees, and other well-intentioned but destructive interventions. Each of these measures increases costs for consumers, reduces credit access for the poor, and consolidates power among the largest incumbents who can afford the compliance burden. If this sounds like central planning, that’s because it is. 

A handful of bureaucrats now wield more influence over the financial system than the millions of Americans who depend on it. The Fed’s technocrats decide the cost of money. The CFPB dictates how data may flow. The FDIC guarantees risks that private firms should bear. And Congress keeps spending as if none of it matters, driving the national debt above $37 trillion and pushing annual interest payments past $1.1 trillion — a sum larger than the defense budget. These are not isolated mistakes. They are symptoms of a government that has grown far beyond its competence.

The path forward begins with humility and a return to first principles. The Fed should stop acting as an unelected economic czar and start shrinking its balance sheet toward historical norms, or possibly back to six percent of GDP, where it was before the Great Financial Crisis. Congress should reassert its oversight role and restore a rules-based monetary framework that ties money growth to economic fundamentals, not political convenience. The CFPB should be dismantled or at least stripped of its unilateral authority, with legitimate fraud enforcement consolidated under accountable agencies. Most importantly, Washington must end its obsession with managing markets and start trusting them again.

America’s prosperity was built on sound money, competition, and personal responsibility — not on bureaucratic control. If we want a financial system that works for everyone, we must end the centralization of both money and data. Section 1033 isn’t just another bad rule; it’s a warning sign of how far we’ve drifted from a truly free economy. The stakes are simple: either Americans control their financial future, or Washington does. It’s time to choose the former.

Originally published at The Washington Examiner.

The Consumer Financial Protection Bureau, the bureaucratic brainchild of Sen. Elizabeth Warren (D-MA), has become a textbook example of how government overreach hides behind feel-good slogans. Now, its supporters are trying to use religious freedom as cover for one of its worst ideas yet: Section 1033, the so-called “open banking” rule.

Let’s be clear: Section 1033 isn’t about consumer empowerment. It’s about expanding federal control over America’s financial system by forcing banks and credit unions to hand over access to their infrastructure to third-party financial technology firms — at no charge.

That’s not innovation. That’s theft.

Alliance Defending Freedom founder Alan Sears recently argued that the rule is necessary to help faith-based groups and nonprofit organizations denied service by major banks. He’s not wrong that religious and conservative organizations have been victims of debanking.

But here’s the real story: These weren’t just corporate decisions. They were done under pressure from the Biden administration, which spent years coercing banks to drop politically disfavored clients. Through environmental, social, and governance mandates, regulatory intimidation, and informal guidance, Washington weaponized the financial system against those with whom it disagreed. The problem wasn’t market failure; it was government pressure.

So why are we now being told the solution is to give the government even more control?

Finalized under former President Joe Biden’s CFPB and now under review by the Trump administration, Section 1033 compels banks to give fintechs access to consumer financial data — without compensation. In 2022 alone, banks spent over $200 billion on digital infrastructure and cybersecurity. These aren’t spreadsheets; they’re secure networks, fraud monitoring systems, and customer platforms built to protect users and maintain trust.

​Section 1033 treats all that like a public utility — mandating free access for any third-party app or data aggregator that a consumer approves. No negotiation. No security guarantees. Just a federal edict.

This is a price control, and like all price controls, it will backfire. When the government mandates free access, banks have fewer incentives to invest in cybersecurity or innovate. Fintechs, meanwhile, are encouraged to ride for free rather than compete or create. Over time, this means less innovation, more risk, and fewer real choices for consumers.

Some claim the rule is needed to prevent discrimination. But we already know where that discrimination originated: from Washington itself. The best way to stop financial deplatforming isn’t to build a federally mandated data-sharing pipeline. It’s to get the government out of the way.

If consumers want to leave a politically biased bank for a community bank or fintech alternative, that’s great. But those companies should have to negotiate access, just like any other industry. They should also be held to the same standards for privacy and security. Section 1033 does neither.

As David McGarry of the Taxpayers Protection Alliance rightly pointed out, Section 1033 is a ticking time bomb. It’s pitched as “pro-consumer,” but it creates a centralized system ripe for abuse by the next administration that decides your beliefs are “too risky.”

To its credit, the Trump administration has paused the rule and reopened the rulemaking process. Now it should finish the job and scrap the rule entirely. If the goal is to empower consumers and protect liberty, the answer is not more federal mandates; it’s voluntary exchange, private contracts, and a free market where consumers and innovators thrive without bureaucratic interference.

If consumers want to leave a politically biased bank for a community bank or fintech alternative, that’s great. But those companies should have to negotiate access, just like any other industry. They should also be held to the same standards for privacy and security. Section 1033 does neither.

As David McGarry of the Taxpayers Protection Alliance rightly pointed out, Section 1033 is a ticking time bomb. It’s pitched as “pro-consumer,” but it creates a centralized system ripe for abuse by the next administration that decides your beliefs are “too risky.”

To its credit, the Trump administration has paused the rule and reopened the rulemaking process. Now it should finish the job and scrap the rule entirely. If the goal is to empower consumers and protect liberty, the answer is not more federal mandates; it’s voluntary exchange, private contracts, and a free market where consumers and innovators thrive without bureaucratic interference.

​Religious liberty should never be used as a fig leaf for central planning. We don’t need more power handed to the same regulators who helped push people out of the banking system in the first place. We need less.

Section 1033 is the wrong solution to a real problem. It should be repealed, not retooled.

Originally published on Substack. 

Imagine being told to build a billion-dollar bridge before the city decides where the road is going. That’s exactly what America’s banks are facing under the CFPB’s Section 1033 “open-banking” rule.

This month, banking groups warned that the CFPB’s deadlines—beginning in April 2026—will force them to pour time and money into compliance systems for a rule already in legal limbo. (Consumer Finance Monitor has the details in the source link under the paywall.)
​
This is bureaucracy at its worst: compliance before certainty, costs before clarity.

What Section 1033 Really Is

Section 1033 of Dodd-Frank sounds harmless: consumers should be able to access their own financial data. Who could argue with that?

But under President Biden’s CFPB Director Rohit Chopra, that idea became a sweeping mandatory data-access regime. Banks must build APIs, grant broad third-party access, and maintain complex compliance systems.

Supporters—including fintech lobbyists—say it will empower consumers and spark competition. But history tells us otherwise: government mandates don’t create innovation; they create red tape, rent-seeking, and regulatory capture.

Why Banks Are Fighting Back

The lawsuit filed by the Bank Policy Institute and state associations isn’t just whining—it’s highlighting the economic flaws:

• Massive compliance costs. Community banks and credit unions will bleed resources building systems they don’t need, raising costs for families in higher fees and fewer services.
• Legal limbo. A federal court already stayed enforcement, and the CFPB itself has admitted it’s planning a rewrite (JD Supra). Why invest billions in infrastructure for a rule that might not survive?
• Arbitrary deadlines. Tiered rollout from 2026 to 2030 punishes smaller banks based on asset size, not readiness. It’s government deciding winners and losers.
• Privacy risks. Mandated data pipelines expand attack surfaces and blur liability. Who pays when a fintech mishandles consumer data? Consumers will sign endless “I agree” forms, but consent fatigue is not empowerment.

And as the Bloomberg Law coverage of the JPMorgan-Plaid deal shows, the real beneficiaries are big players jockeying over who controls and monetizes your data—not the customers they claim to serve.

Bad Economics, Plain and Simple

From a free-market economist’s lens, Section 1033 is flawed at its core:

1. Regulated innovation is fake innovation. Standards set by regulators advantage big incumbents. Smaller innovators get shut out.
2. Moral hazard is built in. When fintechs don’t bear full liability, misuse is inevitable.
3. Capital is misallocated. Banks should be lending, improving services, and investing in communities—not wasting billions on compliance armies.
4. Regulatory creep is guaranteed. Once the pipes exist, Washington will demand more: new data types, longer retention, deeper reporting. Bureaucracies never shrink.

This is exactly what I outline in my Finance Policy Guide: regulation doesn’t just fail to solve problems—it creates new ones by distorting incentives and protecting insiders.

The Trump Opportunity — Reject & Repeal

This bad rule was born under President Biden’s Chopra CFPB. Now President Trump has an opportunity:

• Step 1: Kill the Section 1033 rule. Don’t delay, don’t rewrite—reject it.
• Step 2: Confront the root cause: Dodd-Frank. That law handed unelected bureaucrats sweeping discretion over credit, compliance, and now consumer data. It has crushed community banks and entrenched Wall Street giants who can afford compliance.

Rejecting Section 1033 is just triage. Rolling back Dodd-Frank is the cure.

A Better Way to Empower Consumers

Real reform doesn’t start with coercion—it starts with markets. Here’s the alternative:

• Incentive-based portability. Reward voluntary data sharing by lowering liability risks for firms that empower customers.
• Controlled pilots. Allow opt-in frameworks with strict privacy protections, then scale what works.
• True consumer rights. Focus on transparency, revocation, and damage remedies—not “click to consent” box-checking.
• Sunset rules. Any mandate should expire unless it proves measurable consumer benefit.

That’s how you empower individuals: by trusting markets, respecting choice, and demanding accountability.

My Take

The CFPB’s Section 1033 rule is a Trojan horse: marketed as “empowerment,” but in practice it will raise costs, weaken privacy, and entrench incumbents. Families will be left with fewer choices, higher fees, and more exposure of their private data.

President Trump should take this moment to reject Section 1033 outright and begin dismantling the failed architecture of Dodd-Frank. That’s the path to a financial system rooted in freedom, innovation, and prosperity—not bureaucracy and capture.

Originally published on Substack. 

President Trump’s new Executive Order on Guaranteeing Fair Banking for All Americans takes aim at “debanking,” the practice of closing accounts for political or reputational reasons. That’s a worthy goal. No one should lose access to basic financial services because of their lawful business or beliefs.

In most cases, banks aren’t waking up one morning and deciding to cut customers for political points. They’re responding to a tangle of Washington regulators, political mandates, and legal threats. The free market isn’t the problem here—big government is. And unless we fix that, even well-intentioned orders like this risk making things worse.

Banks can be considered the middlemen of the economy. They connect people who have money with those who need it—whether it’s to start a business, buy a house, or invest for the future. This matchmaking role helps put resources where they can do the most good, which is exactly what drives growth.

In a true free-market system, banks compete for customers based on service, price, and trust. They make decisions based on profitability and the likelihood that a borrower can repay a loan. That’s the essence of voluntary exchange—what Milton Friedman celebrated as the foundation of prosperity.

But banking today is far from that ideal. It’s one of the most regulated industries in America, overseen by the Federal Reserve, FDIC, OCC, CFPB, Treasury, and state regulators.

Every one of these entities imposes rules—from how much capital banks must hold, to the types of loans they can make, to the interest rates they can charge. Add to that political mandates like ESG and DEI, and you have a system where many lending decisions are made with one eye on the customer and the other on Washington.

This environment set the stage for Operation Choke Point, a program launched under the Obama administration. Regulators used a vague term—“reputational risk”—to pressure banks into cutting off entire lawful industries, like firearms dealers and payday lenders.

The reasoning was political, not financial. And the message was clear: serve these customers and expect trouble from your regulators. Reports suggest similar pressures existed under President Biden.

President Trump’s Executive Order goes after this abuse directly. It bans the use of “reputational risk” in regulatory guidance, orders agencies to strip that language from their rules, and calls for reviews of past cases where it was used to force account closures. Those are good steps.

But the EO also gives the Treasury Department and other agencies new authority to investigate past debanking cases and impose “remediation.” In Washington, that usually means more compliance costs, more reporting requirements, and more penalties. And when banks are already drowning in regulation, new burdens push them to take the path of least resistance—closing accounts not just for illegal activity, but for anything that might draw regulatory attention later.

In a free market, banks have every reason to serve more customers. Closing an account without good reason means losing business to a competitor, and likely losing credibility and other customers. But when the government sets vague rules or threatens costly penalties, banks respond by avoiding any customer that could be seen as risky—politically or otherwise.

Without that government pressure, how much political debanking would really happen? Probably very little, if any. The bigger problem is that the regulatory state has so much control over banking that it distorts the market’s natural incentives.

History offers a striking contrast. In the early 1900s, J.P. Morgan famously organized a rescue of the financial system during the Panic of 1907—without orders from Washington—because keeping the system stable was good for business.

That’s what markets can do when they’re free to operate. Today, by contrast, interest rates are manipulated by the Federal Reserve, lending standards are shaped by thousands of pages of regulations, and credit decisions are warped by political checklists.

If the goal is to protect customers from losing accounts for political reasons, the rules should be simple: a bank should only close an account if the customer violates agreed terms or breaks the law. That’s it. No political nudges from regulators. Just clear, objective standards set by individual banks so customers can pick which ones they prefer.

Beyond that, the real fix is to shrink the government’s role in banking.

That means repealing harmful laws like Dodd-Frank that drove bank consolidation and reduced competition. It means removing ESG and DEI mandates from financial oversight. It means encouraging more competition from community banks, credit unions, and fintech companies so customers always have alternatives.

Prosperity comes from voluntary exchange, not from bureaucrats deciding who can do business with whom. When banks are free to serve customers based on merit, and customers are free to take their business elsewhere, both sides win.

The more we let the market work, the more people will prosper.

Conclusion

President Trump is right to call out politicized debanking. No American should lose access to banking because of lawful business or beliefs. But the real source of the problem is the government’s outsized power over the financial system. Giving that same government more authority to police “fairness” in banking risks making the problem worse.

If we want fair banking for all, the solution is clear: less government, more competition, and simple, objective rules that keep politics out of financial decisions. That’s how we protect both customers and banks—and that’s how we let people prosper.