WASHINGTON—The CFPB’s new Personal Financial Data Rights Rule is already facing a legal challenge, Law360 reported.
The new rule requires financial institutions to face new requirements to make account data freely available for consumers to share with fintech firms and other competitors.
The Washington-based Bank Policy Institute has joined with Kentucky-based counterparts to sue the CFPB, filing a lawsuit late Tuesday that challenges the new rule as overreaching and "fundamentally irrational," Law360 said.
Their complaint, filed in Kentucky federal court, alleges the CFPB lacks statutory authority for its open banking mandate and, by imposing it, risks cutting off emerging private-sector efforts to facilitate financial data-sharing that would be safer for consumers than what the agency has drafted, Law360 said.
As CUToday.info previously reported, former NCUA Chairman Dennis Dollar and Dollar Associates principal predicted legal challenges to the final rule would come swiftly.
Dollar said the rule is likely to be challenged in court by the big banks, “who actually have more compliance issues because of the number of account holders and millions more customers potentially to lose than credit unions. With the Supreme Court recently overruling the Chevron Doctrine that gave automatic deference to federal agencies, there is always the possibility that litigation could tie up the rule for a while, just as is happening with the credit card late fee price-fixing rule, and is almost certain with the upcoming overdraft fee price-fixing rule.”