• The Consumer Financial Protection Bureau (CFPB) will substantially rewrite its 2024 open banking rule following intense industry lobbying and legal pressure.
  • The accelerated rulemaking process, starting with a public notice within three weeks, aims to address concerns over innovation, data security, and compliance costs.
  • The original rule, which would have prohibited banks from charging data-access fees, is now on hold as the agency seeks broader stakeholder engagement.

The Consumer Financial Protection Bureau is overhauling its landmark open banking rule, a significant retreat after facing a wave of opposition from the crypto and fintech industries, as well as traditional banks. The agency announced it will initiate an accelerated rulemaking process, with a new public notice expected within the next three weeks, according to people familiar with the matter.

The original rule, stemming from Section 1033 of the Dodd-Frank Act, was designed to grant consumers—and by authorization, third parties—the right to access and share their financial data freely. A key provision would have prohibited financial institutions from charging fees for this data access. The rule was slated to take effect for the largest banks by mid-2026, with staggered deadlines for smaller institutions. Firms with under $850 million in assets were to be exempt entirely.

Efforts to implement the rule have hit a snag. In a notable shift, the CFPB first asked a federal court in May to vacate the rule and then moved in July to stay ongoing litigation. The agency cited the need for substantial revision and a desire for more comprehensive stakeholder engagement as the reason for the reversal. The move comes after significant lobbying from crypto and fintech firms, which argued the rule would stifle innovation and competition. Simultaneously, traditional banks warned about the risks to consumer privacy and data security, criticizing mandates that would force them to share sensitive customer information with third-party companies without what they deemed sufficient controls.

Without a revised deal on the table, the future of open banking in the U.S. remains uncertain. The CFPB, a medium-sized federal agency with a mandate spanning consumer data rights and payment systems, did not immediately respond to a request for further comment on the timeline for the new proposal. The rewrite reflects a fundamental tension in the industry: fintech and crypto firms are pushing for easier data portability to fuel new products, while incumbent banks are cautioning against the uncontrolled sharing of sensitive financial information and the potential loss of fee income.

The outcome of this accelerated rulemaking will have wide-reaching implications, potentially shaping competition in payment apps, lending markets, and the broader shift toward consumer empowerment in finance. Industry watchers now anticipate a more cautious, evidence-based open banking regime that may more closely resemble the stricter standards already in place in Europe and the UK.