NDBA - North Dakota Bankers Association
11/05/2025 | Press release | Distributed by Public on 11/05/2025 09:03
Court Temporarily Halts Section 1033 Rule Enforcement
A federal court has issued an order preventing the CFPB from enforcing its rule on financial data sharing while the bureau reassesses the regulation.
The 2024 rule implemented Section 1033 of the Dodd-Frank Act, which requires banks and other financial institutions to make a consumer's financial information available to them or a third party at the consumer's direction. The Kentucky Bankers Association joined the Bank Policy Institute and other plaintiffs in challenging the rule, arguing it jeopardized consumers' privacy and account security.
The rule was implemented under the CFPB's prior leadership. In separate court filings in May, both the plaintiffs and CFPB asked the U.S. District Court for Eastern Kentucky to vacate the rule. The CFPB has since issued an advance notice of proposed rulemaking seeking public input as it drafts a replacement for the rule.
In his order, District Judge Danny Reeves enjoined the CFPB from enforcing the 2024 rule until it has completed its reconsideration of the regulation.
"Ultimately, the CFPB is currently engaged in rulemaking to reconsider the rule considering the plaintiffs' concerns about its lawfulness," he wrote. "Nevertheless, the plaintiffs and their members are being compelled to incur expenses that would be unrecoverable and unnecessary if the new rule substantially revises the existing requirements or if the current rule is vacated."
The 2024 rule implemented Section 1033 of the Dodd-Frank Act, which requires banks and other financial institutions to make a consumer's financial information available to them or a third party at the consumer's direction. The Kentucky Bankers Association joined the Bank Policy Institute and other plaintiffs in challenging the rule, arguing it jeopardized consumers' privacy and account security.
The rule was implemented under the CFPB's prior leadership. In separate court filings in May, both the plaintiffs and CFPB asked the U.S. District Court for Eastern Kentucky to vacate the rule. The CFPB has since issued an advance notice of proposed rulemaking seeking public input as it drafts a replacement for the rule.
In his order, District Judge Danny Reeves enjoined the CFPB from enforcing the 2024 rule until it has completed its reconsideration of the regulation.
"Ultimately, the CFPB is currently engaged in rulemaking to reconsider the rule considering the plaintiffs' concerns about its lawfulness," he wrote. "Nevertheless, the plaintiffs and their members are being compelled to incur expenses that would be unrecoverable and unnecessary if the new rule substantially revises the existing requirements or if the current rule is vacated."
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