Associations Ask Court to Halt Compliance Deadlines for CFPB's Open Banking Rule

Several banking organizations asked a federal court to postpone the compliance deadlines of the CFPB's "open banking" rule, which mandates that banks share customer financial data with third-party Fintech companies and data aggregators. (See previous coverage.)

In a brief filed in the US District Court for the Eastern District of Kentucky, the plaintiffs argued that under the CFPB's new leadership, the agency (i) reversed its position (now agreeing that the rule is unlawful as being beyond its statutory authority) and (ii) has undertaken a new rulemaking process to "substantially revise" and replace the rule. The agency's actions led the court to issue a stay in the proceedings, though the original rule and its compliance deadlines remain in effect.

The plaintiffs asked the court to lift the stay for the limited purpose of postponing the rule's compliance deadlines and enjoining its enforcement to prevent this "irreparable harm" while the CFPB conducts its new rulemaking.