The Consumer Financial Protection Bureau (CFPB) has said it plans to “substantially” revise its Open Banking rule, as it submitted a motion to stay proceedings in the Forcht Bank, NA, Kentucky Bankers Association and Bank Policy Institute versus CFPB Open Banking case.
In a court filing, the CFPB said it will engage in “an accelerated rulemaking process”.
“To that end, within three weeks, the Bureau plans to issue an advanced notice of proposed rulemaking that will serve as the starting point of an accelerated rulemaking process that the Bureau envisions culminating in a new final rule that substantially revises the Rule under review,” the CFPB stated in the filing.
The CFPB has requested a stay of proceedings to allow it to revise the Personal Financial Data Rights rule, given that the process “may obviate the need for the Court to rule on the current Rule under review”.
The Bureau said it will file status reports every 90 days, “with the clock to start with the entry of the stay order, to keep the court apprised on the progress of the planned rulemaking”.
According to Reuters, US District Judge Danny Reeves of the Eastern District of Kentucky has granted the CFPB’s request for a stay.
Under the rule, financial institutions, credit card issuers, and other financial providers will be required to “unlock” an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.
The plaintiffs filed the present lawsuit on the day the Open Banking rule was announced.
The current version of the Personal Financial Data Rights rule requires the largest financial institutions to comply from April 1, 2026.
Industry reaction
“The CFPB’s decision to request a stay in litigation underscores, in light of recent market developments, that the agency must continue to scrutinize banks’ anti-competitive attempts to charge punitive fees to allow consumers to share access to their financial data,” said Steve Boms, executive director at FDATA.
“We’re glad the CFPB recognized that financial institutions will take advantage of regulatory uncertainty and that consumers must retain the right to access and share access to their own financial data.”
The Financial Technology Association, which was granted the right to intervene in the Open Banking case on May 14 and filed a motion for summary judgment on June 29, arguing that the existing Open Banking rule is lawful, said it would “not oppose the CFPB’s motion to stay this litigation”.
The Bank Policy Institute has opposed the CFPB’s request to halt the case.
Phil Goldfeder, chief executive officer of the American Fintech Council, said he was “encouraged” by the CFPB’s motion to stay the litigation pending the Bureau’s reengagement on the Open Banking rule, and the court’s decision to grant the request.
“As we have in the past, we look forward to representing responsible innovators and elevating consumers and their needs through the proposed expedited rulemaking process,” Goldfeder added.
Further reading: US ecosystem considers Open Banking’s future amid regulatory turmoil
