Since its establishment, the CFPB has focused its efforts on ensuring that financial markets meet the needs of consumers, providers, and the economy. The bureau was created to facilitate a single point of accountability for enforcing federal consumer financial laws and safeguarding individuals in the financial landscape. During the Biden Administration, the CFPB took it upon itself to fundamentally reform the financial services industry and, under Director Rohit Chopra, aimed to expand its regulatory scope and scale the reliance on regulatory authority instead of the traditional rulemaking process. Additionally, the agency developed new rules and took legal action against companies for reported wrongdoing against consumers.
Now, with the changes brought by the Trump Administration, the CFPB’s actions took a major turn, and in the first half of 2025, we witnessed a shift toward a new direction. From dropping lawsuits against previously alleged misconducting companies and financial institutions to deciding against implementing the Open Banking rule without providing a detailed explanation about its choice and ceasing the enforcement of the BNPL regulation, the bureau is on a different trajectory, heavily criticised by the industry.
After filing a lawsuit against Capital One and its parent company, Capital One Financial Corp., in January 2025, accusing these entities of misleading consumers and denying them over USD 2 billion in interest payments, the CFPB dismissed the case just two months later, more specifically at the beginning of March. At that time, in a brief court filing, the agency stated its intent to voluntarily drop the case with prejudice, meaning that it could not be refiled. While Capital One welcomed the CFPB’s decision and strongly disputed the allegations, the bureau did not comment on the matter.
Soon after, the agency withdrew its lawsuit against Early Warning Services (EWS), the operator of the Zeller payment network, as well as several large banks, in an effort to scale back litigation initiatives under the previous administration. Additionally, the acting director at the time, who also oversaw the Office of Management and Budget, expressed criticism over previous actions taken by the CFPB, describing them as an inappropriate use of the agency’s authority.
May 2025 saw further actions from the CFPB, beginning with its decision to cease its supervision of Alphabet’s Google Payment Corp. The ruling reversed a Biden-era initiative to oversee nonbank financial platforms and followed Google’s lawsuit against the bureau’s order from December 2024, which cited consumer risks and mandated monitoring of Alphabet’s payment division. Considering the CFPB’s verdict of discontinuing its supervision efforts, Google also planned to drop its lawsuit.
Days later, the bureau dropped two more cases, those filed against Branch and Walmart, as well as a 2023 settlement with Toyota’s financing arm. While Walmart approved the decision, underlining that the case presented flaws and was rushed, and Toyota stated its continuous commitment to augmenting the customer experience, neither the CFPB nor Branch responded to requests for comment at that time. Similarly to other cases, the agency’s order did not explain the reversal of Toyota’s settlement, which was set to last for five years since its implementation.
Furthermore, in a revised action against Wise US, which replaced an earlier version issued on 30 January 2025, the CFPB adjusted the financial penalty and mandated remedial actions against the company. Under the initial consent order, Wise was required to pay nearly USD 450,000 to affected consumers and a civil penalty of approximately USD 2 million to the agency’s victims' relief fund. However, the amended order reduced the fine to roughly USD 45,000 while maintaining the requirement for consumer redress. This time, the CFPB provided its opinion on the move, stating that the change reflected updated legal guidance and enforcement priorities. The revision fell in line with provisions of the Consumer Financial Protection Act, as well as a February 2025 executive order and the bureau’s rescission of guidance related to deceptive marketing claims concerning remittance services.
First was its decision to drop its May 2024 interpretative rule that classified BNPL products under the same rules as credit cards. Disclosed in a court filing related to ongoing litigation between the agency and a fintech-focused trade group, which contested the rule’s implementation and its applicability to short-term, interest-free BNPL loans, the decision aligned with a wider regulatory shift under the current administration. This policy change reflected a more restrained approach to financial sector oversight. At the time, the withdrawal of the interpretative rule was expected to minimise federal regulatory scrutiny of the sector, which BNPL providers welcomed. However, state regulators and consumer advocacy groups saw this from a different perspective, leaning towards believing this could lead to gaps in consumer protection.
The move was later confirmed in an announcement made by the CFPB in May 2025, when the agency stated that it had halted the enforcement actions for the BNPL rule. In its official statement, the bureau highlighted its plans not to prioritise implementation actions taken based on the Truth in Lending (Regulation Z), created during Joe Biden’s presidential term. On the other hand, the CFPB outlined its intentions to maintain application and supervision resources centred on persistent threats to consumers, especially servicemen and veterans.
The Open Banking rule, finalised in October 2024, providing consumers with rights, privacy, and security over their financial data, came as the second point in the CFPB’s agenda. Initially, the rule, rooted in Section 1033 of the Dodd-Frank Act, was set to require financial institutions, credit card issuers, and other financial providers to unlock an individual’s financial data and transfer it to another provider at the client’s request, with no cost implications. Additionally, the Open Banking rule sought to fuel competition and support customer choice, minimising prices on loans and enhancing user services across payments, credit, and banking markets.
Moreover, the rule would have moved the US closer to having a competitive, safe, and reliable Open Banking system while also allowing the CFPB to develop additional controls to address more products and use cases. With the rule rolled out in phases, larger providers were expected to have to comply with it sooner compared to smaller ones.
This took a turn on 6 May 2025, when the CFPB allegedly started revisiting its Open Banking rule, following apprehensions from banks over liability for data breaches, fees for data access, and the ability to block misuse. Industry stakeholders expressed concern over this decision, as revisiting the rule could lead to a delay in implementation and create uncertainty in the sector. At that point, the CFPB’s capacity to amend the rule was in question after the April workforce reduction, which eliminated the majority of the bureau’s rulemaking unit.
However, on 23 May 2025, the CFPB notified the US District Court for the Eastern District of Kentucky that it was considering its own Open Banking rule ‘unlawful’, planning to drop it. The agency aimed to seek summary judgment against the regulation, allowing the court to decide its validity.
In light of recent developments and the current circumstances, financial industry players started responding, expressing either criticism or doubt over the situation. The Financial Technology Association (FTA) initially announced its plans to defend the Open Banking rule in court after obtaining permission from a federal judge. This allowed it to intervene in a lawsuit involving bank trade groups seeking to repeal the new US Open Banking system. Additionally, the association argued that the agency was not likely to safeguard its members’ interests in a case brought up by banking groups over the enforcement of the regulation.
After the actions taken on 23 May, the FTA criticised the CFPB’s move, claiming that it weakened efforts to foster competition and consumer empowerment in the financial sector. The association also argued that the reversal focused on serving the interests of large banks, which had previously opposed Open Banking initiatives.
Following an October 2024 interview for The Paypers, in which he provided key insights on the CFPB’s Open Banking rule, Steve Boms, Executive Director of FDATA North America, now shared with us his opinion on the CFPB’s latest actions, stating that ‘vacating the Section 1033 rule and restarting the process from scratch would delay critical consumer data rights and curb meaningful financial innovation and competitiveness. Additionally, the action is at odds with the Administration’s stated objectives of reaffirming American competitiveness and leadership in financial advancement. The FDATA urges the CFPB to avoid prolonged industry uncertainty.
Furthermore, to the extent the Administration is intent on starting the rulemaking over from scratch, the CFPB should build on the substantial progress already made and urgently implement a Section 1033 rulemaking that ensures consumers have the right to utilise innovative, third-party tools to help them better manage their finances. During this period, FDATA advises CFPB leadership to reaffirm that financial institutions and other data providers have an existing obligation under Section 1033 of the Dodd-Frank Act to enable their customers to share account information with providers of their choosing, including payment initiation information, even as a new rulemaking commences.
Moreover, FDATA North America underlines its commitment to advocating for policies that safeguard consumers, facilitate competition, and ensure a secure, interoperable financial data ecosystem that meets the needs of a digital economy. Among these, the association mentions encouraging the CFPB to include a broader set of covered accounts, such as investment, retirement, and Electronic Benefit Transfer accounts, under a new Personal Financial Data Rights rulemaking.’
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