The Bank Policy Institute, Kentucky Bankers Association, and Forcht Bank have filed a motion with the U.S. District Court for the Eastern District of Kentucky seeking clarification on whether banks must comply with the current Section 1033 rule while the Consumer Financial Protection Bureau (CFPB) works to revise it.
“Unless the Court acts, banks will be forced to begin investing time and resources to build systems to comply with a regulation that will soon be replaced,” stated Paige Pidano Paridon, BPI Co-Head of Regulatory Affairs. “This is a straightforward and common-sense procedural matter, and we are asking the Court to act to avoid unnecessary cost and confusion.”
The organizations initially challenged the CFPB’s rule in October 2024, arguing that it exceeded the agency’s authority and could put sensitive consumer financial data at risk. In July 2025, the CFPB asked the court to pause litigation as it plans to start a new rulemaking process with an advance notice of proposed rulemaking. Judge Danny Reeves granted this request and required the CFPB to provide updates every 45 days on its progress. However, there has been no clarification on compliance expectations for banks under the existing rule.
The recent motion asks the court to delay compliance deadlines and halt enforcement of the current Section 1033 rule until one year after litigation concludes. Without intervention from the court, some banks would need to comply with these requirements starting in summer 2026.
The Bank Policy Institute represents various types of banks operating in the United States and conducts research and advocacy on regulatory issues affecting financial institutions.