CFPB Issues Interim Open Banking Rule Amid Funding Shortfall: Regulatory and Industry Implications

This analysis is based on the Reuters report [1] detailing the CFPB’s announcement of an interim final open banking rule, rooted in a critical funding crisis. The agency has been virtually non-operational since February 2025 due to the White House’s refusal to allocate funds, with its cash reserves projected to deplete by December 31, 2025 [0].

The regulatory context includes the Biden-era open banking rules (rolled out in 2024) designed to expand consumer control over personal financial data, enhance fintech access, and drive industry competition [0]. Initially, the CFPB supported a banking industry lawsuit challenging these rules, claiming they exceeded the agency’s legal authority. However, in July 2025, the CFPB reversed its stance after the digital asset sector objected to JPMorgan Chase’s plans to charge fintechs for depositor data access [0]. The agency received nearly 14,000 public comments on its proposed rule changes, delaying the finalization process [0]. Facing a funding collapse, the CFPB is now issuing the interim rule to maintain regulatory momentum.

1. Regulatory Uncertainty
   : The interim rule’s temporary nature and the agency’s funding instability create ambiguity for banks, fintechs, and consumers regarding long-term open banking compliance requirements [0].
2. Industry Interest Clashes
   : The CFPB’s policy reversal highlights competing priorities between traditional banks (seeking to control data access and fees) and fintechs (advocating for open, low-cost data sharing) [0].
3. Political Dynamics in Regulation
   : The White House’s funding refusal introduces political tensions into financial regulatory processes, potentially delaying the development of a permanent open banking framework [1].

• Risks
  : Fragmented regulatory standards due to the interim rule’s temporary status, rushed implementation increasing compliance costs for stakeholders, and potential legal challenges from industry groups [0].
• Opportunities
  : Fintechs may benefit from continued access to consumer financial data under the interim rule, while the measure could preserve progress toward greater data transparency until a permanent framework is established [0].

The CFPB’s interim open banking rule is a response to a funding shortfall expected to end agency operations by December 31, 2025. The agency’s operational paralysis since February, policy reversal on Biden-era rules, and 14,000 public comments have all contributed to this decision. The interim rule aims to maintain regulatory progress amid financial constraints, but its temporary nature introduces uncertainty for the open banking ecosystem [0, 1].