Lummis Urges CFPB to Finalize Open Banking Rule for Crypto

Senator Cynthia Lummis (R-WY), Chair of the Senate Banking Subcommittee on Digital Assets, has emerged as a leading voice demanding immediate action from the CFPB. In a letter sent to Acting CFPB Director Russ Vought, Lummis expressed “strong support” for the open banking rule and urged the agency to “finalize this rule as soon as possible.” Her urgency stems from concerns that large banks have systematically restricted access to industries they oppose for political reasons. “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 her formal correspondence with the CFPB.

The Senator’s warning highlights a broader pattern of financial exclusion that extends beyond digital assets. She specifically called out banking executives like JPMorgan Chase CEO Jamie Dimon, who has been vocal about his opposition to cryptocurrency. “We cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation, and increase costs,” Lummis wrote in her letter. She argued that blocking open banking would “drive entrepreneurs overseas and weaken America’s leadership in financial technology,” positioning the rule as essential for maintaining American competitiveness in the global fintech landscape.

The open banking framework, first proposed in 2022 under the Biden administration and finalized on October 22, 2024, represents a fundamental shift in how consumers control their financial data. The rule enables consumers to securely share their financial information with third-party applications through standardized APIs (application programming interfaces). This infrastructure forms a critical bridge for cryptocurrency adoption by allowing users to connect traditional bank accounts directly to digital asset exchanges—connections that banking executives hostile to crypto might otherwise block.

However, the banking industry responded with immediate legal action. The Bank Policy Institute and Kentucky Bankers Association filed a lawsuit the same day the rule was finalized, challenging the CFPB’s authority under Section 1033 of the Dodd-Frank Act. The industry groups argued that the rule mandates data sharing without proper oversight of third parties, increases fraud risk by permitting unsafe practices like screen scraping, and forces banks to provide free access to systems they’ve invested billions to secure. The legal battle took a significant turn in July when a federal judge paused the lawsuit, granting the CFPB’s request for additional time to reconsider the rule. The agency opened a comment period in August that recently closed, setting the stage for the next phase of this regulatory confrontation.

For the cryptocurrency industry, the open banking rule represents nothing less than existential infrastructure. “There’s no way to connect your existing bank accounts to your preferred digital asset exchanges without the open banking rules of the road,” Senator Lummis emphasized in her letter. This connectivity is particularly crucial for fiat-to-crypto conversions, which serve as the primary on-ramp for new users entering digital asset markets. Without secure API-based data sharing, consumers often resort to less secure methods or face outright blocking by financial institutions opposed to cryptocurrency transactions.

The stakes extend beyond simple account connectivity. Kadan Stadelmann, Chief Technology Officer at Komodo Platform, warned that “If banks had the ability to filter third parties, they could block data sharing with crypto exchanges, which would hinder fiat-to-crypto conversions. It would also devastate stablecoin markets by hampering their liquidity.” Stadelmann expressed skepticism about whether open banking would deliver genuine openness, calling it “a facade all along” and “clever marketing” that ultimately leaves “open banks no different from big banks at the end of the day.” He suggested that these systems could be weaponized against crypto similarly to how banking relationships were restricted during Operation Choke Point.

On Tuesday, as the CFPB’s comment period closed, a coalition of fintech and crypto trade groups including the Blockchain Association and Crypto Council for Innovation submitted their own letter reinforcing Lummis’s position. They urged the CFPB to affirm that “Americans own their financial data, not big banks,” framing the issue as a fundamental question of data ownership rights versus institutional control. This united front from crypto advocates underscores the industry’s recognition that the open banking rule could either pave the way for mainstream adoption or create another regulatory hurdle in an already challenging environment.