CFPB to issue "interim" final rule on 1033 open banking

Bloomberg News

• What's at Stake: The interim final rule is expected to be more streamlined than a previous proposal and may allow banks to charge fees to fintech firms for accessing consumer financial data, a point of significant dispute.
• Key Insight: The CFPB plans to bypass the longer, standard rulemaking process by claiming it cannot request funding from the Federal Reserve System, because the central bank is unprofitable. 
• Forward Look: Experts believe the CFPB will likely face new lawsuits over the interim final rule for skirting the normal rulemaking process required by the Administrative Procedure Act, given the rule's vast impact.

The Consumer Financial Protection Bureau plans to issue an "interim" final rule on open banking, moving to quickly write a new rule on consumer financial data rights because the bureau's acting director has refused to request money from the Federal Reserve System to continue operating. Acting CFPB Director Russell Vought expects to run out of funding by year-end.

In court filings, the CFPB said that it will undertake efforts to issue an "interim" final rule on personal financial data rights, bypassing a second notice-and-comment period typically required for major rules. The bureau did not give a timeline, but a federal judge on Wednesday ordered the CFPB to notify a court within five days of issuing the final rule. 

The CFPB has said it has insufficient funds to continue operating through Dec. 31, leading experts to think the rule will be filed soon. For now, the bureau's future is in limbo — and in the hands of various courts — in what is seen as a major victory for the Trump administration. 

The interim final rule on consumer financial data rights is expected to be more streamlined, and may allow banks to charge fees . JPMorganChase roiled the industry by seeking to cut deals on fees with data aggregators such as Plaid, which connect consumer-facing financial technology firms to big banks. 

Open banking is expected to have a major impact on consumers, banks and financial technology firms, and how they compete going forward. It also has attracted the interest of White House Crypto Czar David Sacks because crypto firms are among the fintechs that would face charges by banks for accessing consumer financial data. 

Major regulatory rules typically go through two comment periods and a small-business review process. But the new open banking rule is cutting that timeline short. The CFPB published an advanced notice of proposed rulemaking in August and accepted comments through late October. Mark Paoletta, the CFPB's chief legal officer, said in a status report filed Monday with a district court in Kentucky that the bureau "has been considering those comments as it develops its approach to implementing Section 1033 of the Dodd-Frank Act."

Though a final open banking rule was finalized last October under the Biden administration, the bureau was immediately sued by a group of banks that claimed the agency exceeded its authority. A judge stayed the Biden-era rule, while the CFPB considered whether to write its own Trump-aligned rule. 

The litigation over the rule took a turn when the CFPB under Vought refused to defend the Biden-era rule and appears to back the banking industry's view that depositories can charge fees. In an unusual move, the Financial Technology Association intervened to support the former rule, which did not allow banks to charge fees. The FTA and CFPB will discuss next steps in the ongoing litigation within 30 days of the interim final rule being issued, according to an order issued Wednesday by District Court Judge Danny C. Reeves, of the U.S. District Court for the Eastern District of Kentucky. 

Still, experts think the CFPB will be sued after issuing the interim final rule because under Vought, the agency skirted the normal rulemaking process. Given the vast impact the rule is expected to have on small businesses, many experts think a challenge is a foregone conclusion under the Administrative Procedure Act, which requires federal agencies to create and enforce rules fairly. 

Litigation

CFPB tees up second funding battle with Supreme Court

November 27, 2025 6:00 AM

Meanwhile, litigation over the CFPB's funding is ongoing between the bureau and its union over Vought's claim that he cannot request funding from the Federal Reserve System. Vought has cited the Anti-Deficiency Act, which forbids government agencies, and employees, from spending money beyond what Congress has appropriated.

Separately, the Department of Justice told several courts last month that the Office of Legal Counsel "has determined that the bureau may not legally request funds at this time from the Federal Reserve under Dodd-Frank." 

If the CFPB does run out of funding before a court intervenes, the bureau's roughly 1,400 employees could be furloughed, or put on temporary paid leave, in the next month or so. 

Banks opposed the Biden-era open banking rule because they think it could jeopardize the safety and soundness of the banking system. The Bank Policy Institute, Kentucky Bankers Association and Forcht Bank, a community bank in Lexington, Kentucky, sued the CFPB last year claiming the bureau under former Director Rohit Chopra exceeded its authority by refusing to allow banks to restrict or deny third parties access to consumers' financial information.