A US judge has issued a preliminary injunction temporarily blocking the enforcement of the Consumer Financial Protection Bureau’s (CFPB) open banking rule.
The US District Court for the Eastern District of Kentucky has paused compliance deadlines for the Personal Financial Data Rights Rule following a lawsuit filed by Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute. These deadlines would have required certain financial institutions to comply with the rule—intended to allow Americans to instruct their banks to share their financial data with third-party providers—by June 2026.
The preliminary injunction prevents enforcement until the CFPB finishes reconsidering the rule, a process that started over the summer. This development marks another chapter in an ongoing situation. After publishing the final open banking rule in October, the CFPB sought to have it rescinded by May, deeming it “unlawful.” However, by July, the bureau reversed its position, requesting a pause in litigation while it evaluated potential revisions to the rule, currently considering thousands of public comments.
This uncertainty highlights the clash between traditional financial institutions, which oppose the rule, and the fintech sector, which supports it. Following the judge’s decision, the Bank Policy Institute, Kentucky Bankers Association, and Forcht Bank stated that this procedural step doesn’t impede the rulemaking process but ensures banks aren’t forced to allocate resources to prepare for a rule currently under revision.
Conversely, Ian Moloney from the American Fintech Council argued that delaying implementation of the open banking rule postpones the opportunity for individuals to securely access and share their financial data for better, fairer products.