Key takeaways
- Open banking lets you securely share your bank data with apps you choose, such as budgeting tools, payment apps and lenders.
- The CFPB finalized a federal open banking rule (Section 1033) in 2024, but as of November 2026 it is blocked by a federal court while the agency rewrites it.
- The first compliance date, April 1, 2026, passed without being enforced. A revised proposal was sent for White House review in August 2026.
- You can share data safely by using apps that connect through secure tokens instead of your password, and by revoking access you no longer need.
Open banking is a system that lets you give a third-party app permission to see your bank account data or start payments, without handing over your banking password. When you link your checking account to a budgeting app, verify your income for a loan, or connect your bank to a payment app, you’re using open banking.
In the U.S., open banking has grown mostly through private agreements between banks and data companies rather than a single law. A federal rule meant to guarantee your right to share your data was finalized in 2024, but it’s on hold in court while regulators revise it. Here’s how open banking works today, what’s changing, and how to use it safely.
How open banking works
- You choose an app and ask it to connect to your bank.
- You log in at your bank, usually through a secure window, and approve exactly what data the app can see, such as balances, transactions or account and routing numbers.
- The bank sends the app a secure token through an application programming interface (API). The app never sees your password.
- The app uses your data to provide its service, and you can revoke access at any time from the app or your bank’s settings.
Many apps rely on data aggregators, companies that connect thousands of banks to thousands of apps. You may see their name on the login screen when you link an account.
APIs vs. screen scraping
Not all connections are created equal. Older apps sometimes asked for your actual username and password and then logged in as you to “scrape” data. Modern open banking uses tokenized API connections, which are safer.
| API (token-based) connection | Screen scraping | |
|---|---|---|
| Do you share your password? | No. You log in at your bank. | Yes. The app stores your credentials. |
| Data shared | Only what you approve | Often everything the login can see |
| Can you revoke access easily? | Yes, in the app or your bank’s settings | Usually only by changing your password |
| Reliability | Higher; built for data sharing | Breaks when the bank changes its website |
| Where the industry is heading | The standard | Being phased out |
What you can do with open banking
- Budget and track spending across all your accounts in one app. See our budgeting guide.
- Get approved for loans faster. Lenders can verify income and cash flow from your account data, which can help people with thin credit files. Compare offers in our personal loans guide.
- Pay and move money by linking a bank account to a payment app or brokerage without mailing a voided check.
- Switch banks more easily by moving direct deposits and automatic payments. Our bank-switching checklist walks through it.
- Shop for better rates, since tools can compare what you earn and pay with offers from other banks.
The U.S. open banking rule (Section 1033): where it stands
Section 1033 of the Dodd-Frank Act says consumers have a right to access their own financial data. The Consumer Financial Protection Bureau (CFPB) turned that into a detailed rule in late 2024. Here’s the timeline:
| Date | What happened |
|---|---|
| Late 2024 | The CFPB finalized the Personal Financial Data Rights rule. Banks would have to share data with authorized apps for free through secure interfaces, and screen scraping would be phased out. |
| 2024–2025 | Bank groups, including the Bank Policy Institute and Kentucky Bankers Association, sued in federal court in Kentucky. |
| August 2025 | The CFPB opened a reconsideration, asking for comment on who can access data, security, privacy and whether banks may charge fees for data access. |
| Fall 2025 | The court blocked enforcement of the rule while the CFPB reconsiders it. |
| April 1, 2026 | The first compliance date for the largest banks passed without taking effect in practice. |
| August 2026 | A revised proposal was sent to the White House Office of Information and Regulatory Affairs for review. As of Nov. 2, 2026, we hadn’t found a published version. |
The biggest open question is fees. The 2024 rule barred banks from charging for data access. Some banks argue they should be paid by the companies that use the data; in September 2025, JPMorgan Chase and the aggregator Plaid announced a paid data-access agreement. If fees spread, some free apps could raise prices or limit features.
What this means for you: Open banking still works today. Most big banks already offer secure API connections. What’s uncertain is whether sharing your data will stay free and how strict the security and privacy rules will be.
Is open banking safe?
Token-based open banking is generally safer than giving an app your password, but no system is risk-free. The main risks are a data breach at the app or aggregator, apps using your data in ways you didn’t expect, and scammers posing as legitimate apps.
How to share your data safely
- Never type your bank password into an app’s own form. A legitimate connection sends you to your bank’s login page or app.
- Share only what’s needed. A budgeting app may need transactions, not your account number.
- Read the privacy policy. Look for whether the app sells or shares your data and how long it keeps it.
- Review connected apps in your bank’s security settings a few times a year and revoke anything you don’t use.
- Turn on alerts for new connections and transactions. Read more about mobile banking security.
Who pays if something goes wrong?
If money is taken from your account through an electronic transfer you didn’t authorize, federal Regulation E limits your liability when you report it quickly: $50 if you notify your bank within 2 business days of learning about it. Report problems to your bank right away. Watch out for scams that use fake “account verification” requests; see our guide to avoiding financial scams.
Open banking in the U.S. vs. the U.K. and Europe
The U.K. and European Union required large banks to open secure data-sharing interfaces years ago, through rules such as the EU’s PSD2. The U.S. took a market-driven path instead, with banks, aggregators and industry standards groups building connections, and the federal rule still being reworked. The result is broad access at most big U.S. banks, with less uniform rules than in Europe.
Frequently asked questions
What is open banking in simple terms?
It’s a way to let apps you trust see your bank data or make payments with your permission, using secure connections instead of your password.
Is the CFPB open banking rule in effect?
No. The rule was finalized in 2024, but a federal court has blocked enforcement while the CFPB reconsiders it. A revised proposal was under White House review as of late 2026.
Can I stop an app from accessing my bank data?
Yes. Revoke access in the app’s settings and in your bank’s security or connected-apps menu. If an app has your password, change it.
Will banks start charging for open banking?
Possibly. Whether banks can charge data companies for access is one of the main issues in the CFPB’s reconsideration. Any fee would be paid by the app or aggregator, though costs could be passed on to users.
Is open banking the same as online banking?
No. Online banking is how you access your own account. Open banking is how you securely share that account’s data with other apps.
Related: online banks vs. traditional banks, credit unions vs. banks, free financial calculators.
Sources: CFPB Personal Financial Data Rights rule (2024) and August 2025 advance notice of reconsideration; court and rulemaking status as tracked by Open Banking Tracker (June 2026) and ShopAppy (September 2026); Regulation E liability rules. Status checked Nov. 2, 2026. This article is for educational purposes and isn’t financial or legal advice.
Written by Chanchala
Founder & Lead Writer · B.Sc. Mathematics (Honors) · 9 years in banking & lending
Chanchala is the founder and lead writer of FinInfoBlog. She holds a B.Sc. in Mathematics (Honors) and has 9 years of experience in banking and lending. She writes plain-English guides on savings, CDs, loans, credit and personal finance for U.S. readers, and makes sure every example shows the math behind the money decision. How we research and fact-check.