WASHINGTON (Reuters) -The top U.S. watchdog for consumer finance asked a federal court on Tuesday to pause an industry lawsuit seeking to strike down "open banking" regulations adopted by  the prior Biden administration so the agency will have time to put forward a new version, court papers showed.

The decision marked a reversal for the Consumer Financial Protection Bureau, which had previously said the court should scrap the regulations which are intended to give consumers greater control over their own financial data and boost innovation in financial services technology.

"In light of recent events in the marketplace, the bureau has now decided to initiate a new rulemaking to reconsider the rule with a view to substantially revising it and providing a robust justification," the agency said.