The Consumer Financial Protection Bureau (CFPB) on Tuesday unveiled rules intended to increase competition that would require financial institutions, credit card issuers and other financial providers to allow consumers to transfer their data to other institutions.
CFPB said the finalized rules will fuel competition and consumer choice, lower prices on loans and improve customer service.
“Too many Americans are stuck in financial products with lousy rates and service,” CFPB Director Rohit Chopra said in a statement. “Today’s action will give people more power to get better rates and service on bank accounts, credit cards, and more.”
CFPB argues that the new rule will empower customers to shop around, which in turn will lead companies to offer improved products to attract new customers and retain old ones.
The rule allows consumers to access or authorize a third party to access data including transaction information, account balance information, information needed to initiate payments and their upcoming. Financial providers must now make that information available upon request “without charging fees.”
“The rule moves the United States closer to having a competitive, safe, secure, and reliable ‘open banking’ system. Today’s rule is part of the CFPB’s efforts to finally activate Section 1033 of the Consumer Financial Protection Act, a dormant legal authority enacted by Congress in 2010,” CFPB said in its release.
Compliance with the new rule will be implemented in phases, with larger providers needing to adhere sooner than smaller ones. The largest institutions will have to comply by April 1, 2026 and smaller institutions have until April 1, 2030.
