New CFPB rule gives consumers ‘greater rights’ over financial data
CFPB Director Rohit Chopra: 'Too many Americans are stuck in financial products with lousy rates and service.'
The Consumer Financial Protection Bureau (CFPB) has finalized a new rule giving consumers greater rights, privacy and security over their personal financial data.
The Personal Financial Data Rights Rule requires financial institutions, credit card issuers and other financial providers unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free, according to the CFPB, making it easier for consumers to switch providers for superior rates and services.
“Too many Americans are stuck in financial products with lousy rates and service,” said CFPB Director Rohit Chopra. “Today’s action will give people more power to get better rates and service on bank accounts, credit cards and more.”
The CFPB rule will also ensure consumers have access to share data associated with their bank accounts, credit cards, mobile wallets, payment apps and other financial products, while aiming to address market concentration that limits consumer choice over financial products and services.
Consumers can now access, or authorize a third party to access, data on transactions and account balance, information needed to initiate payments, upcoming bill information and basic account verification.
The CFPB said the new rule would “spur greater choice and increase competition” by enabling people to:
- Fire fintechs and banks that provide lousy service: Consumers will be able to transfer their bank data to another bank, ensuring consumers can keep much of their banking history as they switch to another financial institution.
- Shop for better rates on products and credit: Consumers will be able to comparison shop and move to a competitor offering better rates, such as higher interest on deposits or lower interest on loans.
- Make secure payments, including with “pay-by-bank”: The rule ensures consumers are able to securely share payments information, which can help enable what is sometimes referred to as pay-by-bank.
According to the CFPB, compliance with the rule will be implemented in phases, with larger providers subject to the rule sooner than smaller ones.
Financial firms will be required to comply based on their size; the largest institutions will have to comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030. Certain small banks and credit unions are not subject to this rule.
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