CFPB To Issue “Interim” Final Rule On 1033 Open Banking

The article describes how the CFPB is planning an “interim” final rule under Dodd‑Frank section 1033 to keep its open banking agenda moving while it faces a potential funding shutdown and related litigation.​

What the rule is

• The CFPB is preparing an interim final rule on consumer financial data rights (the 1033 open banking rule) that is expected to be more streamlined than earlier proposals and the Biden‑era final rule issued last October.​

• The new version may allow banks to charge fees to fintechs for access to consumer financial data, which is a key point of contention between banks and fintech firms.​

Why the timing is urgent

• The bureau has said it does not have enough funding to operate past about Dec. 31, and its acting director has declined to request additional funds from the Federal Reserve, citing the Fed’s lack of current profits.​

• Because of this funding squeeze, the CFPB is trying to finalize an interim rule quickly instead of using the typical, slower rulemaking process with multiple comment rounds and a full small‑business review.​

Procedural shortcuts and legal risk

• Major rules normally have at least two comment periods and additional procedural steps, but here the CFPB relied on an advance notice of proposed rulemaking in August and a single comment period through late October.​

• Experts quoted in the article expect lawsuits arguing that issuing such a major rule as an interim final rule violates the Administrative Procedure Act because the CFPB allegedly “skirted” normal rulemaking requirements.​

Litigation context

• The original Biden‑era 1033 rule was finalized last October and is already being challenged, including by banks and trade groups such as the Bank Policy Institute, the Kentucky Bankers Association, and Forcht Bank.​

• The litigation posture shifted after the current leadership refused to defend that earlier rule, prompting the Financial Technology Association to intervene in the case, and there are also separate court challenges targeting the CFPB’s overall funding structure.​

Potential impacts

• If the CFPB runs out of funding before courts act, about 1,400 CFPB employees could be furloughed or put on temporary paid leave, leaving the future enforcement and implementation of any interim open banking rule uncertain.​

• Open banking under section 1033 is expected to significantly affect consumers and small businesses, so industry groups widely anticipate renewed legal challenges once the interim final rule is issued.​