WASHINGTON — The Consumer Financial Protection Bureau said it will pursue a formal notice-and-comment rulemaking process for its long-awaited open banking rule, reversing an earlier plan to issue the regulation as an interim final rule after receiving $145 million in new funding. The announcement was welcomed by credit unions.
The CFPB said the additional funding removes the urgency that had prompted the agency to consider bypassing the traditional rulemaking process, which typically allows industry participants, consumer groups and the public to submit comments before a rule is finalized.
The open banking rule, required under Section 1033 of the Dodd-Frank Act, is intended to give consumers greater control over their financial data by requiring banks and other financial institutions to share account information with authorized third parties at a consumer’s request.
Critics & Supporters
As the CU Daily has been reporting, supporters say the rule could increase competition and spur innovation in payments, lending and personal finance tools, while critics have raised concerns about data security, liability and compliance costs.
The CFPB had previously indicated it might issue an interim final rule — which would take effect immediately while still allowing for public comment — citing resource constraints and the complexity of the rule. But a court decision that the CFPB must be funded—after the Trump administration has sought to all but eliminate it—has the agency saying it has the capacity to follow the standard regulatory process.
What Groups Want to See
Industry groups have repeatedly urged the Bureau to use a notice-and-comment approach, arguing that the scope of the open banking framework warrants extensive input from banks, credit unions, fintech companies and data aggregators.
Consumer advocates have also pushed for a transparent process, saying the rule could reshape how Americans access and share sensitive financial information.
In a statement, the CFPB said the timing for releasing a proposed rule will be announced later, but reiterated that establishing clear, enforceable standards for consumer-authorized data sharing remains a priority.
America’s Credit Unions Responds
“America’s Credit Unions appreciates the CFPB for heeding our calls to approach the section 1033 rewrite through a formal rulemaking process, rather than an interim final rule,” America’s Credit Unions President and CEO Scott Simpson said in a statement. “Public input is paramount to ensuring that regulations properly address industry issues while preventing unnecessary burdens. For a rule as complex as section 1033, this is a win for credit unions and the 145 million Americans they serve to have their voices heard in the rulemaking process.”
