Introduction
On December 9, 2025, the Consumer Financial Protection Bureau, the United States’ primary federal agency overseeing consumer financial protections, announced it would issue an “interim final” rule governing open banking and consumer data rights. The announcement came in response to a severe funding shortfall, which the agency warns could lead to exhaustion of its resources by the end of the year.
The interim rule is intended as a temporary measure, allowing the CFPB to maintain regulatory authority while the long-term revision of the data-sharing framework remains unfinished. This decision highlights ongoing turbulence within the agency’s regulatory agenda, influenced by shifting political priorities and funding challenges.
Background: What Is Open Banking And Why It Matters?
Open banking refers to a regulatory framework that allows consumers to share their financial data, held by banks or other institutions, with third-party providers if they choose. The goal is to encourage competition, drive innovation in financial services, and give consumers more choice.
Under the previous CFPB agenda, a data-sharing rule was finalized requiring financial institutions to make customer data accessible upon request. This was intended to help consumers move more easily between banks and fintech providers, breaking up monopolies on financial data held by large banks.
Proponents argued the rule would foster competition, reduce costs, and improve transparency. It would also give consumers more control over their own financial data, empowering them to choose services that best meet their needs.
However, implementation of open banking in the United States has faced obstacles. Following the finalization of the rule, banks and industry groups filed legal challenges, citing concerns over regulatory authority, data security, and compliance costs. A federal court issued a preliminary injunction halting enforcement, delaying the rule’s rollout.
The Interim Final Rule And The Funding Crisis
The CFPB’s announcement stated that the agency would issue an interim final rule as a temporary measure due to limited funding. Officials indicated that the agency may not have sufficient resources to complete a full rewrite of the open banking regulation by the end of 2025.
The lack of funding stems from political and administrative decisions that have limited the CFPB’s budget. Facing potential operational shutdown, the agency determined that issuing an interim rule was the most feasible way to maintain some level of consumer protection and regulatory authority.
This interim measure is not a permanent solution but allows the agency to continue enforcing basic data-sharing and consumer protection standards while navigating legal and funding uncertainties.
Significance Of The Move
Preserving Consumer Protections
The interim rule ensures that some consumer protections in financial data sharing remain in place. Without it, there could have been a complete halt in regulatory oversight, leaving consumers and fintech firms in a regulatory vacuum.
Reflecting Political and Funding Pressures
The decision underscores the challenges faced by the CFPB, including limited funding and political opposition. It illustrates the tension between regulatory ambitions and the practical realities of operational constraints, highlighting how funding decisions can directly affect the enforcement of consumer protections.
Creating Uncertainty for Stakeholders
While the interim rule preserves some protections, it introduces uncertainty for banks, fintech companies, and consumers. Fintech firms may face difficulties planning products reliant on open banking, and consumers may experience delays in gaining the benefits of easier account switching and data portability.
Timeline Of Key Developments
In 2023, the CFPB proposed a rule enabling consumer financial data sharing under the Dodd-Frank Act, aiming to encourage competition and innovation.
In 2024, the rule was finalized, theoretically allowing consumers to direct their banks to share data with third-party financial service providers.
In October 2025, a coalition of banks filed suit challenging the rule, and a federal judge issued an injunction halting its enforcement.
During 2025, the CFPB signaled plans to revise the rule substantially, starting a new rulemaking process.
On December 9, 2025, the CFPB announced the interim final rule to maintain regulatory oversight despite funding shortfalls.
Reactions And Stakeholder Perspectives
CFPB Officials
The CFPB framed the interim rule as necessary to protect consumers despite limited funding. Officials emphasized urgency, noting the agency might exhaust its resources by the end of the year. Legal actions have also been initiated by nonprofit groups and agency staff seeking to secure funding, which could influence the agency’s long-term viability.
Banking Industry
Banks have historically opposed open banking rules due to concerns about data security, compliance costs, and regulatory overreach. While the temporary injunction was welcomed, the interim rule may be perceived as a compromise that maintains minimal regulatory requirements while reducing long-term pressures on the banking sector.
Fintech Firms and Consumer Advocates
For fintech companies, the interim rule offers partial relief, preserving some opportunities for data access and innovation. However, the uncertainty surrounding full regulatory implementation may hinder investment and the rollout of new financial products. Consumer advocates remain concerned that prolonged funding challenges could undermine long-term consumer rights and limit the potential benefits of open banking.
Risks, Challenges, And Future Outlook
Regulatory Rollback
As a temporary measure, the interim rule may eventually be replaced, delayed, or diluted. Without long-term funding and political support, the full promise of open banking could remain unrealized, limiting consumer choice and competition.
Legal and Operational Uncertainty
Legal challenges to the interim rule are possible, creating additional uncertainty for banks, fintech firms, and consumers. The CFPB’s ability to enforce even this temporary rule depends on operational capacity, which may be constrained by budget limitations.
Impact on Innovation
Startups and fintech companies that rely on data sharing for innovative services may face delays in product development and investment. Smaller institutions may benefit from the pause, allowing them more time to adapt and plan compliance strategies.
Implications For Consumers
Consumers could see several impacts:
Data Control: The interim rule maintains some control over personal financial data, but full transparency and portability may not be guaranteed.
Competition and Costs: Delays in full open banking implementation could slow competition and result in higher fees for financial services.
Access to Innovation: Fintech innovations may be delayed, limiting consumers’ access to new financial tools.
Trust in Regulation: Funding and operational challenges highlight vulnerabilities in consumer protection agencies, potentially affecting trust in the financial regulatory system.
Conclusion
The CFPB’s issuance of an interim final open banking rule reflects both pragmatism and uncertainty. It preserves essential consumer protections in the short term while highlighting funding, legal, and political challenges facing the agency.
For consumers, fintech companies, and banks, this development signals a cautious path forward: some protections remain, but the full benefits of open banking, including greater data portability, competition, and innovation, are still uncertain. The long-term success of open banking in the United States will depend on future funding decisions, political support, and the resolution of ongoing legal challenges.
