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The regulatory landscape is shifting. Here’s what it means for your underwriting strategy \u2014 and why now is the time to act.<\/em><\/p>\n 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 \u2014 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.<\/p>\n Rule 1033 gives consumers the right to authorize third parties \u2014 lenders, fintech apps, financial tools \u2014 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.<\/p>\n For lenders, the friction that has historically made cash flow underwriting harder to implement \u2014 the challenge of reliably accessing borrower transaction data at scale \u2014 is being systematically reduced by regulatory mandate.<\/p>\n CFPB Rule 1033 doesn’t just enable cash flow underwriting \u2014 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.<\/p>\n<\/blockquote>\n 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 \u2014 which improves completion rates. When borrowers understand exactly what they’re agreeing to, they’re more willing to agree.<\/p>\n 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 \u2014 bypassing a credit bureau system that has historically underserved them \u2014 is a key mechanism for expanding credit access.<\/p>\n 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.<\/p>\n 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.<\/p>\n 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.<\/p>\nWhat CFPB Rule 1033 Actually Does<\/h2>\n
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What This Means for Borrower Consent<\/h2>\n
The Fair Lending Dimension<\/h2>\n
Practical Implications for Your Strategy<\/h2>\n
How Kora Is Built for the Open Banking Era<\/h2>\n