The Consumer Financial Protection Bureau is walking back its open banking rule, but financial institutions are moving ahead with their investment despite regulatory shifts. 

The Consumer Financial Protection Bureau (CFPB) on May 23 filed its intention to pull back the open banking rule, which was set to take effect in April 2026.

“I don’t foresee a situation where the CFPB changing its position and potentially scrapping the rule somehow stops the momentum of open banking,” Mike Silver, consumer finance attorney and partner at Husch Blackwell, told Bank Automation News.  

Financial institutions, including Regions Bank, Valley Bank and Citizens Bank, were well on their way to implementing open banking infrastructure, but that doesn’t mean the investment was wasted.  

“From an open banking perspective, I think the momentum is going to continue to grow here within the U.S. market,” Carl Slabicki, executive platform owner, treasury services at BNY, told BAN. Investment will continue because “open banking solves really deep challenges across the banking ecosystem for billers, merchants, retailers, etc., that are simply not yet solved by other mechanisms.” 

Banks “at least have invested in infrastructure that can be repurposed,” Kim Phan, privacy and data security partner in the Washington office of international law firm Troutman Pepper Locke, told BAN.  

The $157 billion Regions Bank, for one, announced in January that it was teaming up with information technology company Axway to accelerate its open banking transition — and that plan remains, a bank spokesperson told BAN. 

“Our work with Axway is moving forward as planned,” they said. “It’s all part of our broader focus on giving customers the experience they want through the banking channels that work best for them.”  

Read more on open banking: Decoding Section 1033 

Regulatory pushback

While encroaching 2026 compliance deadlines in the open banking rule were moving the needle on open banking investment for some, others were hesitant about the regulation. 

The CFPB finalized its open banking rule in October 2024 and was almost immediately met with pushback. 

The Bank Policy Institute and Kentucky Bankers Association, for example, filed a lawsuit against the CFPB in October 2024 asserting the agency had “overstepped its statutory authority,” according to a Bank Policy Institute release at that time. 

The lawsuit alleges that the open banking rule includes an unreasonable implementation timeline and lack of a consensus of standards, according to the release. 

“Banks have a responsibility to protect customers and their data, and this rule compromises these responsibilities, putting bank customers at risk,” Greg Baer, BPI’s president and chief executive, said in the release. 

Among the Bank Policy Institute members are:  

• $3.4 trillion Bank of America; 

• $487 billion Capital One; 

• $1.7 trillion Citibank; 

• $212 billion Fifth Third; 

• $189 billion KeyBank; and  

• $1.9 trillion Wells Fargo.  

With or without regulation, innovation and investment continues, Husch Blackwell’s Silver said.  

“The whole premise of [open banking] is to have competition, not just between banks, neobanks and fintechs, but between banks themselves for their customers,” Silver said. 

While regulation may not be Section 1033 specifically, there is still common interest in getting more standardization around open banking, whatever that may look like, BNY’s Slabicki said.