The Consumer Financial Protection Bureau has filed a motion to stay proceedings in a lawsuit brought by Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute over last year’s rule on personal financial data rights.
The plaintiffs, the U.S. District Court for the Eastern District of Kentucky, are challenging the rule on administrative grounds, alleging that it violated procedural requirements and should be vacated.
In its motion, the CFPB points to recent leadership changes and shifting conditions in the financial services marketplace as the basis for reconsidering the rule. The bureau now plans to issue an advanced notice of proposed rulemaking within three weeks, initiating an accelerated rulemaking process that could result in a significantly revised final rule.
The goal, the bureau says, is to provide a more “robust justification” for the regulation and to address the policy concerns and legal flaws identified in the original version.
The CFPB is requesting that the court pause litigation while this process unfolds, arguing that a stay would conserve judicial resources and bar the court from resolving legal issues that may soon become moot. If granted, the stay would halt the current summary judgment briefing schedule and toll the rule’s compliance deadlines.
The CFPB said it has committed to providing 90-day status updates to keep the court informed of progress on the revised rule.
The request comes at a time of heightened industry attention to data access and control, especially between traditional banks and fintechs. JPMorgan Chase recently disclosed plans to begin charging fintechs for access to client data, a move that has reignited debates over who controls financial relationships and who profits from them. The CFPB’s rule, in theory, would govern exactly that kind of data sharing under a federal framework, potentially reshaping competitive dynamics across banking, payments, and personal finance platforms.