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US Democrats’ Letter Underscores Continuing Uncertainty At The CFPB
Open banking is one of several areas being disrupted by confusion over the future of the US Consumer Financial Protection Bureau (CFPB), as lawmakers seek clarity on recent comments by its acting director, Russell Vought.
In their letter to Vought on October 27, 2025, the ten Democratic members of the Senate Banking Committee sought clarification on several issues, including the CFPB’s funding status and whether the agency has developed specific plans to wind down its work.
Their intervention followed public remarks Vought made on the Charlie Kirk Show podcast earlier this month, in which he stated that he plans to shut down the CFPB “within the next two or three months”.
In the letter, the senators wrote: “These comments are particularly concerning given that a federal court has specifically blocked you from illegally shutting down the agency.”
Since the second Trump administration took office, the future of the CFPB has been in doubt.
In February 2025, President Trump dismissed CFPB director Rohit Chopra and appointed Treasury Secretary Scott Bessent as interim head, who immediately halted all agency operations.
Vought, who also serves as director of the Office of Management and Budget, was subsequently appointed acting head. He ordered a temporary shutdown and placed the regulator’s staff on administrative leave.
Since then, the indication has been that the administration intended to maintain the CFPB on a significantly reduced scale.
In May, the bureau withdrew 67 guidance documents, including interpretive rules, policy statements and advisory opinions.
The treatment of the CFPB aligns with the broader deregulatory focus of the current administration. The agency has retreated from active rulemaking and enforcement, and has withdrawn several lawsuits and penalties initiated under the previous administration.
The latest developments may signal that the agency is close to the end of the road.
The senators concluded their letter by asking Vought to detail his plans for shutting down the CFPB by October 31, 2025.
Responses on 1033
The renewed speculation comes at a time when the CFPB is making progress in one area where it has continued its activity: the US open banking framework under Section 1033 of the Consumer Financial Protection Act of 2010.
In a notice published on August 22, 2025, the agency requested public comment within 60 days on four specific issues:
- How to define who may act as a “representative” making a request on behalf of a consumer.
- The best method for assessing fees to cover costs incurred by a “covered person” in responding to such requests.
- The cost-benefit and risk implications for data security under Section 1033 compliance.
- The risk implications for data privacy under Section 1033 compliance.
Nearly 14,000 responses were submitted by the deadline, underscoring the high level of engagement among market participants.
The open banking rule was enacted in October 2024 under the Biden administration, and is intended to promote competition in financial services by allowing consumers to transfer their data more easily to new providers.
As soon as the rule was introduced, banking industry trade groups and a Kentucky community bank challenged it in court, arguing that the CFPB had exceeded its authority and imposed unnecessarily heavy compliance obligations on financial institutions.
Although the consultation demonstrates ongoing activity around open banking, renewed uncertainty about the CFPB’s future raises questions about what role the agency will ultimately play in the regulatory ecosystem.
The impact of uncertainty
As the ten Democratic senators seek clarity on the Trump administration’s plans for the CFPB, organisations subject to its oversight are already adjusting to its retreat from active regulation.
The agency has deprioritised enforcement in key areas and moved away from the more interventionist stance of the previous administration. Some in the financial sector, particularly credit unions and digital payment firms that previously felt targeted by the CFPB’s actions, have welcomed this shift.
However, the agency’s withdrawal could also create challenges for other parts of the industry, such as fintechs.
Section 1033 was on the verge of enabling open banking in the US by requiring financial institutions to grant consumers access to their data. Without active enforcement, however, banks may delay or restrict third-party access, undermining the regulation’s intent.
The absence of robust enforcement, or the potential dissolution of the CFPB altogether, creates significant uncertainty for open banking providers, including non-US firms planning to enter the market.
Some firms had already invested in anticipation of this regulatory shift, but uncertainty may now cause them to hesitate, dampening innovation and favouring incumbents in payments and banking.
As uncertainty over the CFPB’s future persists, US market participants should continue to monitor policy developments closely and reassess how their compliance frameworks and regulatory relationships may evolve in the months ahead.
