- Key Insight: A district court sided with banks in halting the Consumer Financial Protection Bureau enforcement of a final rule on personal financial data rights.
- Forward Look: The Trump administration is reconsidering the open banking rule.
- What's at Stake: Banks have already started charging fees for data aggregators and fintechs to access consumers' financial data.
A federal court has agreed to halt the compliance and enforcement of the Consumer Financial Proteçtion Bureau's Biden-era open banking rule while the Trump administration completes its own rule on personal financial data rights.
On Wednesday, U.S. District Court Judge Danny C. Reeves of the Eastern District of Kentucky lifted a stay in the litigation of the CFPB's open banking rule and issued a preliminary injunction to halt the CFPB from enforcing compliance with the rule
The ruling is a major win for banks, which had asked the court to halt the first compliance deadline of June 30, 2026.
"It is unlikely that the CFPB will issue a new rule before that date," the judge stated in the
The judge acknowledged that the public "could arguably lose some benefit from the rule not being enforced at the set compliance deadlines because it could 'delay consumer control over their information.'"
However, Reeves also stated that the banks have a strong likelihood of success on the merits of the case. The Bank Policy Institute and other plaintiffs said they were grateful that the court stayed the compliance deadline.
"This is a common-sense procedural step that doesn't interfere with the rulemaking process but ensures banks won't be forced to invest time and resources preparing for a rule that is currently being rewritten," the plaintiffs said in a statement.
Penny Lee, president and CEO of the Financial Technology Association, a trade group of fintechs, said in a statement that they "respectfully disagree" with the judge's preliminary injunction order and are exploring all options, including an appeal.
"Section 1033 gives consumers the right to securely control and share their personal financial data with the authorized representatives they choose and without having to pay a fee," she said in a statement. "Most Americans today rely on open banking connectivity to access apps and services and manage their financial lives, a foundational right in today's digital age."
The litigation in the case began last year immediately after the CFPB, under former Director Rohit Chopra, finalized the rule. The Bank Policy Institute, Kentucky Bankers Association and Forcht Bank, a $1.5 billion-asset community bank in Lexington, Kentucky,
The final open banking rule has not been vacated, but the fight over how to give consumers access to their personal financial data has started up again.
The Biden-era rule prohibited banks from charging fees to data aggregators, fintechs and third parties to cover the cost of building and maintaining secure systems for data access. The CFPB acknowledged that banks will incur up to $47 million annually to comply with the rule's requirements.
The CFPB has restarted the rulemaking process by publishing an advance notice of proposed rulemaking in August seeking public comment on several issues to address banks' concerns in the litigation. The bureau has received
The 1033 rule, known for its section of the Dodd-Frank Act, was first initiated in 2016. Though the rule
The CFPB under Vought refused to defend the Biden rule in court. Instead, the Financial Technology Association took up that cause, supporting the final rule largely because it did not allow banks to charge fees. The FTA led a
Penny Lee, president and CEO of the FTA, said in a
Under the new rulemaking process, the CFPB is asking about the definition of a consumer's "representative," whether there should be a prohibition on fees, as well as liability issues and a prohibition on secondary uses of data.
