The Financial Technology Association (FTA) has hit out at US regulators over plans to rescind open banking rules, calling the move a "handout to Wall Street banks".
In a legal filing, the Consumer Financial Protection Bureau (CFPB) says it will petition a court to have the 1033 open banking rule rescinded.
The CFPB only published the Personal Financial Data Rights final rule in October, giving Americans the right to instruct their banks to share their financial data with third party providers.
However, the plan has long proved unpopular with many in the traditional financial industry and banks have taken advantage of the change in administration to raise concerns about potential liability for data breaches and the ability to charge for access to data.
At the beginning of May, reports surfaced suggesting that Wall Street was likely to get its way, with the CFPB looking to amended or eliminated the rule. It is now moving ahead with elimination.
Penny Lee, CEO, FTA, says: "Vacating the 1033 rule is a handout to Wall Street banks, who are trying to limit competition and debank Americans from digital financial services. Americans must have the right to control their financial lives, not the nation’s biggest banks."
For the CFPB, this is the latest example of a starkly different approach under Trump as it scales back its activities and reverses previous positions under acting Director Russell Vought.
In March it ditched an interpretive rule declaring that pay-in-four BNPL lenders should be treated in the same way as credit cards.
In recent weeks it has also dropped a host of lawsuits, including against JPMorgan Chase, Bank of America and Wells Fargo over fraud on the Zelle P2P payments network.
Meanwhile, a rule that would give the watchdog oversight of tech giants such as Apple, Google and X, that offer digital payment apps and wallets has been killed off by the Senate and House of Representatives.