Sen. Lummis Pushes US Regulator to Finalize Open Banking Rule Backing Crypto

In brief

U.S. Senator Cynthia Lummis (R-WY) has urged the Consumer Financial Protection Bureau to finalize its open banking rule, warning that banks have restricted access to industries they oppose, including digital assets.
The rule, finalized on October 22, 2024, allows consumers to share financial data with third-party apps via APIs, critical infrastructure for connecting bank accounts to crypto exchanges.
Banking industry groups sued the same day the rule was finalized, but a federal judge paused the lawsuit in July, granting the CFPB time to reconsider.

Pro-crypto lawmakers have demanded immediate action to prevent large banks from blocking Americans’ access to digital asset platforms and other financial services.

In a letter sent Tuesday to Acting CFPB Director Russ Vought, Senator Cynthia Lummis (R-WY) expressed “strong support” for the Consumer Financial Protection Bureau’s open banking rule and urged it “finalize this rule as soon as possible.”

The Senate Banking Subcommittee on Digital Assets Chair warned that major financial institutions have weaponized their gatekeeping power against industries and individuals they disagree with.

“Large banks have shown they’ll restrict access for political reasons, targeting industries & individuals they disagree with, including gun manufacturers, digital assets, churches, & even @POTUS,” Lummis tweeted while sharing the letter.

“We cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation, and increase costs,” Lummis wrote. “Throwing up barriers would drive entrepreneurs overseas and weaken America’s leadership in financial technology.”

A contested framework

The open banking framework, first proposed in 2022 under former U.S. President Joe Biden and finalized on October 22, 2024, allows consumers to securely share financial data with third-party apps through APIs (application programming interfaces).

This infrastructure forms a critical bridge for crypto adoption, enabling users to connect traditional bank accounts to digital asset exchanges, connections that could otherwise be blocked by banking executives hostile to crypto.

The Bank Policy Institute and Kentucky Bankers Association filed a lawsuit the same day the rule was finalized, saying it mandates data sharing without proper oversight of third parties, increases fraud risk by allowing unsafe practices like screen scraping, and forces banks to provide free access to systems they’ve spent billions securing.

In July, a federal judge paused the lawsuit, granting the CFPB’s request for time to reconsider the rule under Section 1033 of the Dodd-Frank Act.

The agency opened a comment period in August, which closed on Tuesday.

“There’s no way to connect your existing bank accounts to your preferred digital asset exchanges without the open banking rules of the road,” Lummis wrote in her letter. “Many big bank CEOs like Jamie Dimon have made their opposition to digital assets very clear.”

On Tuesday, a coalition of fintech and crypto trade groups, including the Blockchain Association and Crypto Council for Innovation, submitted their own letter urging the CFPB to affirm, “Americans own their financial data, not big banks.”

A “facade” of openness

“If banks had the ability to filter third parties, they could block data sharing with crypto exchanges, which would hinder fiat-to-crypto conversions,” Kadan Stadelmann, Chief Technology Officer at Komodo Platform, told Decrypt. It would also devastate stablecoin markets by hampering their liquidity.”

Stadelmann dismissed the idea that open banking offers genuine openness, calling it “a facade all along,” and argued that it’s “clever marketing,” with open banks “no different from big banks at the end of the day” and just as likely to weaponize their systems as seen during Operation Choke Point.

“While it is true open banking could expose increasing numbers of consumers to scams, the true concern of big banks is they are facing steepening competition from all directions,” he said, adding that regulation has long been “used by an entrenched elite to maintain power.”