While the latest developments at the United States Consumer Financial Protection Bureau (CFPB) have made headlines, the fundamental business case for open banking remains stronger than ever. Industry experts from around the world maintain that financial institutions have a unique opportunity to move beyond compliance-driven approaches and embrace open banking as a catalyst for innovation and growth.
That said, you aren’t the only one wondering what this all means. We recently had the opportunity to exchange with partners at the Financial Data Exchange (FDX) and FS Vector, a strategic financial services consulting firm, on the latest developments at the CFPB.
First and most importantly: the U.S. open banking rule is not technically affected by these changes and remains law.
However, immediate and longer-term effects of the agency’s shuttering are less clear. Here’s what you need to know.
What’s happening at the CFPB?
On Monday, January 27th, Scott Bessent was confirmed as Treasury Secretary.
On Saturday February 1st, the White House fired Rohit Chopra, then-director of the Consumer Financial Protection Bureau. At that point, Bessent was appointed as Acting Director of the CFPB.
Immediately after his appointment, Bessent sent an internal email directing staff to:
- Stop work without express approval
- Halt rule-making activities
- Suspend enforcement actions
- Cease public communications
This action suspended the effective dates of all final rules that have been issued but are not yet effective. That week, a small DOGE team was onboarded, and on late Friday night were granted access to all the CFPB’s data systems.
Sunday, February 9th, employees were sent home for the week to work remotely unless otherwise instructed. CFPB operations were effectively at a standstill.
The following week, the Trump administration nominated former Federal Deposit Insurance Corp. Director Jonathan McKernan to lead the bureau — a sign, some observers say, that there are plans for the bureau beyond merely slashing budgets.
What direction will McKernan take leading the CFPB? | American Banker
The facts about Rule 1033
Rule 1033, which requires U.S. financial firms such as banks and credit unions to give consumers access to their personal financial data at no charge, effectively mandating the use of open banking APIs, was announced in October of last year.
The rule’s effective date was January 17, 2025 – which is key, as Acting Director Bessent’s latest directives to CFPB staff apply to rules that have not yet become effective.
Meaning, Rule 1033 remains valid law with unchanged compliance dates.
That said, with the rule’s watchdog agency defanged, it’s unclear what level of enforcement this rule will see. For additional context:
- The CFPB has substantial reserves to fund operations for a year or more.
- Expert advisors reaching out to Congress suggest there is ongoing bipartisan support for the rule. Standard-setting organization (SSO) designations should not be affected either.
- Only Congress can adjust funding or institute major reforms; unilateral defunding is likely to face separation of powers challenges. Experts expect a protracted legal battle, akin to what we’ve already seen in federal courts after the abrupt shutdown of USAID.
- Similar actions occurred in 2017 with then-CFPB head Mick Mulvaney.
Further reading:
- The end of the CFPB | POLITICO
- Delete the CFPB? Be Careful What You Wish For | Open Banker
- What the Future May Hold for the Consumer Financial Protection Bureau’s Open Banking Rule | K&L Gates
What does this mean for standard-setting organizations such as FDX?
If anything, collaborative industry groups will be more needed then ever, having already emerged as market-driven forces for cooperation.
The Financial Data Exchange (FDX), for example, is not a governmental body. It is an independent consortium of key stakeholders in the financial data ecosystem, tasked with creating a common API standard for interoperability around financial data sharing.
The FDX standard enjoys widespread trust and adoption in North America, with more than 94 million consumer accounts throughout the financial ecosystem leveraging the FDX API at last count.
Those who have been active in building this robust ecosystem will continue to work with the FDX’s 230+ member organizations—which now include most major U.S. banks and fintechs—who believe in this mission.
Open banking is already being embraced by the North American market because of the many benefits it offers banks and financial institutions.
These include benefits like greater ease in engaging their ecosystem, better partner onboarding, stronger security and data consent management, enhanced protection against fraud and fishing… and of course, exciting innovation on the horizon.
What does this mean for my open banking strategy in 2025?
We have advised for years that, while regulatory compliance may be an initial driver for some, the business opportunity of open banking is by far the more interesting motor for transformation.
While open banking requires banks to become an API provider, securely exposing their data for greater interoperability and competition, it also offers up a goldmine of actionable intelligence that, if leveraged, can yield rich cross-selling opportunities and beyond.
Open banking use cases that are of particular interest for retail banks and credit unions include:
- Account aggregation: use APIs to securely aggregate customer financial data across multiple institutions, enabling a more complete customer profile for cross-selling opportunities.
- Financial advisory services: get real-time access to client data, enabling wealth advisors to proactively offer high-quality, dynamic investment strategies based on behavioral insights and financial fluctuations.
- Real-time lending and customer interaction: eliminate long wait times for loans by aggregating transaction history and external data sources to offer instant prequalification and improved financial services.
Dive deeper into open banking use cases in this blog
At Axway, we’re proud to have played an early role alongside FDX in developing open banking standards in North America and shaping business models for the future.
We help banks and credit unions deliver these types of innovative services to an expanded consumer base faster, by combining an intuitive developer experience with secure data management.
Amplify Open Banking makes it possible to leverage open banking APIs for secure data sharing, improved customer trust, streamlined third-party collaboration, and new revenue streams through API monetization.
Don’t hesitate to seize the open banking opportunity
Headlines may focus on regulatory uncertainty, but successful institutions recognize that open banking transcends compliance requirements. It’s a business imperative driven by market demands and customer expectations.
Staying the course with open banking implementation plans is a wise path, while continuing to monitor litigation developments and maintaining a flexible approach.
This is a good time to get your internal API house in order – not just to prepare for the possibility of regulatory evolution, but to better unlock the value of your core systems.
Engaging with industry standards bodies like FDX, continuing to build strong partner ecosystems, and investing in robust API infrastructure will help FSIs develop a clear value proposition around their open banking program.
As a leader in core enterprise integration solutions for more than 20 years, Axway helps companies shape and implement sound strategies for success in a shifting digital business landscape.
Our Amplify Open Banking solution gives enterprises the tools to accelerate their open banking strategy and rise to the evolving challenges of ecosystem participation, consumer trust, and operational efficiency.
While the regulatory landscape will continue to evolve, forward-thinking financial institutions have an unprecedented opportunity to shape the future of banking through open banking initiatives. Success will come to those who view open banking not as a compliance exercise but as a strategic imperative for growth and innovation.
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