On June 29, an intervenor-defendant, a fintech association, filed a motion for summary judgment urging the U.S. District Court for the Eastern District of Kentucky to uphold the CFPB’s Section 1033 rule. The fintech association urged the district court to reject the arguments from the plaintiffs — a bank and two banking trade associations — and the CFPB that the rule exceeded the CFPB’s statutory authority or otherwise arbitrary and capricious. The intervenor-defendant highlighted that the CFPB engaged extensively with industry across administrations of both political parties and followed “exhaustive notice-and-comment process” before promulgating the rule.

As previously covered by InfoBytes, several banking entities filed suit seeking to halt the CFPB’s Section 1033 final rule, which would allow consumers to authorize third-party companies, such as fintech firms, to access their financial information associated with certain deposit and credit card accounts. Following a 30-day stay in this case, the court granted a fintech trade association’s motion to intervene in this case after the CFPB announced that it would no longer defend its own rule (covered here).

The intervenor-defendant argued that the CFPA confers “consumers” — defined to include their representatives — the right to freely access their financial data and granted the CFPB explicit rulemaking authority to fulfill that right. The intervenor-defendant further argued that the CFPA was designed to facilitate access to financial data so that consumers can leverage financial technology to use that data for their own benefit and that this “cannot meaningfully occur if consumers may not authorize third-party providers to access their banking information.”

The intervenor-defendant countered plaintiffs’ arguments that the rule’s definition of “consumer” does not include a consumer’s “representative,” that the CFPB’s decision to incorporate industry standards adopted by standard-setting organizations into the rule’s compliance framework represented an unlawful delegation of government authority to private entities, and that the rule’s  prohibition on fees for data access was not consistent with the CFPA, and that the plaintiffs had not otherwise identified any arbitrary or capricious actions in the rule. The fintech association also argued that the CFPB’s new interpretation of the statutory terms “consumer” and “representative” are entitled to no deference, and if the Bureau wishes to change the rule, it must do so through the appropriate notice-and-comment rulemaking process.