CFPB Poised to Revisit Controversial Open Banking Rule Amid Industry Pushback

The Consumer Financial Protection Bureau (CFPB) is preparing to reopen its recently finalized open banking rule, marking yet another reversal under the Trump administration, Bloomberg Law reports, as stated in Finextra News.

Originally finalized in October, the Personal Financial Data Rights rule was intended to empower American consumers by giving them the legal right to instruct their banks to share financial data with third-party providers. The initiative aimed to support innovation in financial services and increase consumer choice.

However, citing unnamed sources, Bloomberg Law reveals that the CFPB is now considering walking back or potentially even vacating the rule altogether. This shift appears to be a response to mounting pressure from banks, which have raised concerns about liability in the event of data breaches, the lack of clarity around monetizing access to consumer data, and their inability to block bad actors from exploiting the system.

“It is not known whether the rule will be amended or eliminated,” the report adds, leaving stakeholders in a state of uncertainty.

The proposed rollback has sparked criticism from open banking advocates. Steve Boms, CEO of FDATA North America, commented: “Reopening this rulemaking means stalling financial innovation and prolonging uncertainty for both businesses and consumers in America.”

The rule has been under legal fire since its inception. Just days after its finalization, the Bank Policy Institute and the Kentucky Bankers Association filed a lawsuit against the CFPB. The plaintiffs argue that the bureau overstepped its authority, imposing a framework that unfairly places the burden of data protection solely on banks while absolving the CFPB from responsibility for supervising third-party data recipients.

This development is part of a broader trend at the CFPB under the Trump administration and acting Director Russell Vought, who has overseen a series of deregulatory moves. In March, the agency rescinded an interpretive rule that classified Buy Now, Pay Later (BNPL) providers under credit card regulations. In the weeks that followed, it also dropped multiple lawsuits, including high-profile cases against JPMorgan Chase, Bank of America, and Wells Fargo, all related to fraud on the Zelle peer-to-peer payments network.

Additionally, a separate rule that would have expanded CFPB oversight to cover digital payment platforms operated by Apple, Google, and X (formerly Twitter) was recently struck down by both chambers of Congress.

As the financial industry and regulators brace for potential changes, the future of the open banking landscape in the U.S. remains uncertain—caught between innovation, security concerns, and a shifting political tide.