Court Grants Stay as CFPB Plans to Rework Personal Financial Data Rights Rule 

The rule, finalized in 2024, was developed under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It was intended to require financial institutions and other data providers to make consumer financial data—such as transaction history, account details, fees, and usage data—electronically available to consumers and authorized third parties upon request. 

Though not explicitly labeled as an “open banking” rule, the regulation was seen as a step in that direction. At the time of its announcement, the CFPB emphasized the rule’s potential to promote competition by making it easier for consumers to switch financial service providers. 

The rule defined “data providers” broadly, including both depository and nondepository institutions that issue credit cards, hold transaction accounts, or provide various forms of payment services. However, the regulation soon faced legal pushback. Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute filed suit, arguing the rule violated administrative procedures. 

In light of these challenges, the CFPB submitted a motion to the court stating that it intends to begin a new rulemaking process. The agency said it plans to “substantially revise” the original rule and offer “a robust justification” for the new version. The bureau also noted it will engage with the public and stakeholders to help shape the revised regulation in a way that reflects updated policy goals and addresses prior concerns. 

To initiate this process, the CFPB announced it will issue an advance notice of proposed rulemaking in the coming weeks. This step invites public input and is typically used to gather feedback before drafting a new rule. 

As the CFPB prepares to relaunch its regulatory efforts, both industry stakeholders and consumer advocates will be watching closely to see how the revised approach balances innovation, competition, and consumer protection.