Attorneys See Years-Long Challenge for CFPB Financial Data Rule
It will likely “take years” for courts to resolve issues related to the Consumer Financial Protection Bureau’s Personal Financial Data Rights (PFDR) Rule, Orrick attorneys said in a recent post.
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Consumer groups told the CFPB in comments that it should retain consumer privacy protections in Section 1033 of the Dodd-Frank Act and continue guarding against third-party financial data abuse (see 2510230031). Industry groups asked the CFPB to not interfere with existing financial data regulations.
Orrick attorneys noted there are several legal possibilities as courts consider a challenge against the PFDR Rule. The U.S. District Court for the Eastern District of Kentucky on Wednesday granted Forcht Bank’s motion to stay compliance dates until the agency has a chance to reconsider the rule. The court held the plaintiffs were likely to succeed on their claims that the agency acted “arbitrarily and capriciously by failing to consider the cumulative impact of the Rule on consumers’ data security,” attorneys noted.
Orrick listed several different routes for the rule’s legal challenge, including potential intervention from Congress. The “ultimate resolution of these important policy disputes is uncertain, but the one confident prediction we can make is that it will likely take years to resolve,” they said.