WASHINGTON–A federal judge has paused a lawsuit against the U.S. Consumer Financial Protection Bureau that is seeking to strike down its open banking regulations.

The judge has granted the CFPB additional time to replace the contested rules, which came under the Bureau’s former director, Rohit Chopra.

As the CU Daily has reported, the move by the CFPB under the new administration is a reversal of its position on open banking under the Biden administration, which had been strongly supportive of giving consumers greater control over their own financial data, saying it would boost innovation and provide more options for consumers.

Open banking allows consumers to more easily transport their own data and to grant permission to third parties to access that data, including from credit union accounts. 

‘New Rulemaking’

Rules for open banking were mandated under 2010’s Dodd Frank Act. 

“In light of recent events in the marketplace, the bureau has now decided to initiate a new rulemaking to reconsider the rule with a view to substantially revising it and providing a robust justification,” the CFPB said in a court filing.

It added that it would begin an “accelerated” rulemaking process within three weeks.

Lawsuits Filed

The banking industry has filed suit seeking to stop certain aspects of the bill, while the fintech industry continues to fight for the open banking rules to be enacted, as the CU Daily reported here.

America’s Credit Unions has also expressed opposition to the rule, as reported here.