CFPB has moved to delay ongoing litigation over its Open Banking rule as it prepares to overhaul the regulation. The motion comes amid industry pressure and leadership change at the Bureau.
The Consumer Financial Protection Bureau (CFPB) has asked a federal court to stay proceedings in a high-profile lawsuit over its personal financial data rights rule, signalling a possible major revision to the regulation underpinning the US open banking framework.
In a motion filed on July 29, the CFPB said it plans to “initiate a new rulemaking to reconsider the Rule with a view to substantially revising it and providing a robust justification.”
The agency added that the effort would be conducted under “the policy preferences of new leadership” and would involve a “comprehensive reexamination … alongside stakeholders and the broader public.”
The legal dispute, Forcht Bank v. CFPB, was filed in November 2024 by a coalition of banking industry plaintiffs including Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute.
The lawsuit alleges that the final rule, issued under Section 1033 of the Consumer Financial Protection Act, violates the Administrative Procedure Act (APA) and oversteps the Bureau’s statutory authority.
The court had already granted two previous stays earlier this year. The case is currently at the summary judgment stage, with all principal motions filed. In the latest filing, the Bureau argues that continuing litigation would waste court resources if the rule under dispute is likely to be replaced.
“To conserve judicial resources,” the motion reads, “the Bureau respectfully requests a stay of proceedings to allow the Bureau to conduct an accelerated rulemaking process that may obviate the need for the Court to rule on the current Rule under review.”
The CFPB expects to issue an advance notice of proposed rulemaking “within three weeks,” which it describes as the “starting point of an accelerated rulemaking process” likely to result in a significantly different final rule.
The Bureau pointed to judicial precedent to support its request, citing Utah v. EPA, in which a court found that “abeyance may be warranted when there are legitimate developments that could obviate the need for judicial review, such as … when an agency plans to reconsider a challenged rule.”
Under the contested regulation, released on November 18, 2024, certain financial institutions would be required to provide consumers and authorised third parties with access to transaction-level data in a standardised, machine-readable format. The rule, a centrepiece of the Bureau’s push toward open banking, also sets out privacy and liability requirements for data aggregators and API providers.
According to the motion, the CFPB’s planned revision aims to “come up with a well-reasoned approach to these complex issues that aligns with the policy preferences of new leadership and addresses the defects in the initial Rule.”
However, not all parties support the proposed litigation pause. The Financial Technology Association, which intervened in the case earlier this year, does not oppose the stay. The plaintiffs, by contrast, are expected to file a formal objection.
“Plaintiffs are opposed to extending today’s filing deadline and to placing the litigation in abeyance,” the CFPB stated. “Plaintiffs intend to file their reply brief today as scheduled, and they will file an opposition to the government’s stay motion shortly.”
If granted, the CFPB has committed to providing 90-day status updates to the court while the new rulemaking process proceeds.
The motion underscores a potentially dramatic shift in the CFPB’s open banking agenda.
While the Bureau has long touted consumer-authorised data access as a pillar of competition and innovation in financial services, the agency now appears to be reconsidering its technical and legal foundations; under pressure from regulated banks and amid a broader political transition at the agency’s leadership level.
