WASHINGTON— The Consumer Financial Protection Bureau indicated its contested consumer financial data rights rule may soon be struck down, according to a new legal filing.
In the filing submitted to the U.S. District Court for the Eastern District of Kentucky, the CFPB stated the agency intends to withdraw the rule, citing a lack of legal foundation.
The CFPB plans to request summary judgment this week, asking the court to formally invalidate the regulation, the American Banker reported. The rule was to be phased in during 2026.
“After reviewing the rule and considering the issues that this case presents, Bureau leadership has determined that the rule is unlawful and should be set aside,” the CFPB stated in a court document released late Friday. “To that end defendants intend to file a motion for summary judgment by May 30th, 2025, the date that this court had set for plaintiffs in its March 27th order.”
The open banking rule withdrawal follows the recision of a number of Bureau regulations, including BNPL/Credit Card rule.
As CUToday.info previously reported, the CFPB’s open banking rule brought with it new regulatory requirements, yet also presented an opportunity to modernize data management systems, strengthen consumer relationships and stay competitive, analysts said.
While experts, too, believed those FIs that embraced open banking early will have a competitive advantage, some were concerned over the cost and time that will be required—possibly having to create a new area within the financial institution.