Open Banking and Cash Flow Underwriting: What Lenders Need to Know About CFPB Rule 1033

The regulatory landscape is shifting. Here’s what it means for your underwriting strategy — and why now is the time to act.

For years, cash flow underwriting has been a competitive advantage for early adopters. What’s new is that the regulatory environment is now actively pushing the entire industry in this direction. CFPB Rule 1033, finalized in late 2024, establishes consumer rights to access and share their financial data with third parties — including lenders. It’s the foundation of open banking in the United States, and it has direct implications for how cash flow underwriting works in practice.

What CFPB Rule 1033 Actually Does

Rule 1033 gives consumers the right to authorize third parties — lenders, fintech apps, financial tools — to access their financial data directly from their bank. Financial institutions are required to make this data available through standardized interfaces, which means the data-sharing that cash flow underwriting depends on becomes more reliable, more standardized, and more widely available.

For lenders, the friction that has historically made cash flow underwriting harder to implement — the challenge of reliably accessing borrower transaction data at scale — is being systematically reduced by regulatory mandate.

CFPB Rule 1033 doesn’t just enable cash flow underwriting — it signals that the industry is moving in this direction regardless. Lenders who are already building cash flow capabilities will have a significant head start.

What This Means for Borrower Consent

Rule 1033 standardizes the consent and data-sharing process. Consumers have clear, standardized rights around what data they’re sharing, with whom, for how long, and how to revoke access. This standardization makes the consent experience cleaner and more trustworthy for borrowers — which improves completion rates. When borrowers understand exactly what they’re agreeing to, they’re more willing to agree.

The Fair Lending Dimension

Rule 1033 intersects directly with the CFPB’s emphasis on fair lending. The ability for underserved borrowers to share their financial data directly with lenders — bypassing a credit bureau system that has historically underserved them — is a key mechanism for expanding credit access.

For lenders, this creates both an opportunity and an expectation. The opportunity: serve more borrowers from underserved communities by evaluating their actual financial behavior. The expectation: regulators will increasingly look at whether lenders are using available data to serve these populations.

Practical Implications for Your Strategy

The strategic question Rule 1033 poses is straightforward: build cash flow underwriting capabilities now, thoughtfully, or wait until competitive pressure makes it a necessity? Lenders already invested in cash flow underwriting will find Rule 1033 makes their capability more powerful. Lenders who haven’t yet made the investment face growing competitive disadvantage.

How Kora Is Built for the Open Banking Era

Kora’s platform is built on the open banking infrastructure that Rule 1033 is standardizing. We aggregate transaction data through compliant, permissioned connections, analyze it using models developed on real loan performance data, and return the Kora Score in a format that integrates directly with your loan origination system. As open banking standards evolve under Rule 1033, Kora’s infrastructure evolves with them.