Judge blocks implementation of CFPB’s open banking rule

A U.S. District Court Judge for the Eastern District of Kentucky granted a preliminary injunction effectively blocking enforcement of the CFPB's Personal Financial Data Rights Rule as the bureau pursues a new rulemaking. The rule—authorized by section 1033 of the Dodd-Frank Act—was finalized in 2024 under the previous administration, while the new administration issued an advance notice of proposed rulemaking (ANPR) as part of an accelerated rulemaking process. 

“Credit unions across the country are grateful for the U.S District Court’s decision to block the 1033 rule while new rulemaking is underway, providing clarity to those struggling with compliance uncertainty," said America’s Credit Unions Director of Innovation and Technology Andrew Morris. "The rule as currently written places excessive burdens, unfair risk allocation, potential market distortion, and risk management issues on the plates of credit unions who are already overburdened by other regulatory requirements. We are encouraged by the court’s decision as well as the CFPB’s willingness to remedy the flawed PFDR rule and await new guidance once released.” 

The 2024 rule vacated by the court would require financial institutions with more than $850 million in assets to provide access to certain consumer data upon receiving a request from an authorized third party. America’s Credit Unions raised numerous privacy and compliance concerns with the final rule with the new administration starting in January.  

In a May legal filing, the Trump administration noted the finalized rule is “unlawful and should be set aside,” ultimately leading to the ANPR in August. In comments filed earlier this month on the ANPR, America’s Credit Unions cited those concerns and made recommendations as the CFPB re-works the rule.