The CFPB said it will engage in an “accelerated rulemaking process” to revise the rule, beginning with its issuance of an advanced note of proposed rulemaking to be released within three weeks, according to a copy of the CFPB’s motion shared online by the Financial Technology Association.
This action may eliminate the need for the court to consider the current rule, the agency said in its motion.
“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,” CFPB wrote in the motion. “The Bureau seeks to comprehensively reexamine this matter alongside stakeholders and the broader public to come up with a well-reasoned approach to these complex issues that aligns with the policy preferences of new leadership and addresses the defects in the initial Rule.”
The CFPB under the previous administration announced the final version of its rule on personal financial data rights on Oct. 22, saying it aimed to give consumers greater control over their financial data and the ability to share it securely with third-party service providers.
The rule requires banks, credit unions and other financial institutions to make consumers’ financial data available upon request to both consumers and authorized third parties.
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It also establishes strict guidelines for third parties seeking to access consumer data, saying they must obtain explicit consumer consent, limit their data collection and use to only what is necessary for providing requested services, and implement data security measures.
The final rule was challenged on the day it was announced when the Bank Policy Institute and the Kentucky Bankers Association filed a lawsuit asserting that the rule jeopardizes the security and privacy of consumer financial data.
In May, with the CFPB having new leadership under the Trump administration, the agency filed a brief in support of its bid to rescind the rule, saying it agreed with the plaintiffs that the rule is unlawful and that the Bureau had exceeded its regulatory authority.
Bloomberg reported Tuesday that the agency’s reversal, reflected in the new filing to stay the lawsuit, came after JPMorgan Chase proposed charging fees for access to the data.
