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Political shifts and legal battles cloud the path for open banking in the U.S.
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April 30, 2025

Key Points
The Consumer Financial Protection Bureau's open banking rule faces uncertainty due to political changes and legal challenges.
The rule, finalized in October 2024, aims to give consumers control over their financial data by mandating secure access.
A leadership change at the CFPB and a lawsuit from banking groups have delayed the rule's implementation.
The Consumer Financial Protection Bureau's ambitious push for open banking in the U.S. is now caught in sharp political crossfire, throwing the future of consumer data portability into question. A landmark rule finalized just last fall, designed to empower consumers and foster fintech innovation by unlocking financial data, faces significant headwinds following a change in administration, and a subsequent softening of the agency's defensive posture in court.
Rule's original promise: Finalized in October 2024 under former Director Rohit Chopra, the Personal Financial Data Rights rule (implementing Section 1033 of the Dodd-Frank Act) mandates that banks and other financial institutions provide customers with free, secure access to their own financial data, enabling them to easily share it with third-party apps and services. Proponents hailed it as a way to increase competition and give consumers more control over their financial lives, moving away from riskier methods, like screen scraping.
Early implementation steps: The CFPB moved quickly on implementation, recognizing the Financial Data Exchange (FDX) in January 2025 as the first official "standard setting body" under the new rule. FDX, a non-profit consortium including banks, fintechs, and consumer groups, had applied for the role in September 2024, signaling industry readiness to build the required technical framework.
Political headwinds emerge: The landscape shifted dramatically following the January 2025 presidential inauguration. President Trump fired CFPB Director Chopra, appointing Russell Vought as Acting Director, who swiftly ordered major operational changes at the agency. This leadership change immediately cast doubt on the enforcement priorities and the fate of recently finalized regulations like the open banking rule.
Legal challenge intensifies: Even before the administrative shift, the rule faced legal opposition. A coalition of banking groups, including the Bank Policy Institute and the Kentucky Bankers Association, filed suit in late 2024, arguing the CFPB exceeded its authority and that the rule could stifle safer, private-sector data-sharing initiatives. The lawsuit seeks to invalidate the rule entirely.
CFPB signals retreat: Under Chopra, the CFPB had agreed to fast-track the lawsuit. However, following the leadership change, the agency's stance appeared to soften. In February 2025, the CFPB and the banking plaintiffs jointly requested, and were granted, a 30-day stay in the case, which also paused the rule's compliance deadlines, set to begin next year. The parties subsequently sought an additional 60-day tolling period in late March.
Industry pushes back: This perceived pullback prompted the Financial Technology Association (FTA), a trade group representing fintech companies poised to benefit from the rule, to renew its motion to intervene in the lawsuit on March 27, 2025. The FTA argued that the CFPB's agreement to delay implementation deadlines demonstrates the agency can no longer adequately represent the interests of the rule's supporters, making intervention necessary to defend the regulation.
Uncertainty clouds implementation: The confluence of the ongoing lawsuit, the CFPB's apparent shift in defensive strategy under new leadership, and the resulting court-ordered delays leaves the future of open banking regulation in the U.S. in significant doubt. While the rule technically remains on the books and standard-setters like FDX are approved, the political and legal turmoil threatens to stall or even reverse the move toward a more interconnected, API-driven financial ecosystem envisioned just months ago.