Oct. 22 (UPI) — The Consumer Financial Protection Bureau announced a final rule that will allow consumers to switch banks more easily by requiring banking institutions to release certain personal data for free.
The CFPB rule would require banks, credit card issuers, and other financial providers to “unlock” an individual’s personal financial data and transfer it to another provider at the consumer’s request without cost, moving the United States closer to an “open banking.”
“Too many Americans are stuck in financial products with lousy rates and service,” Rohit Chopra, the director of CFPB, 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.”
The new rule ensures that bank customers will be able to share data associated with their accounts, credit cards, and other financial information with other institutions. The institution’s control over such information limited consumer options over their choice of financial products and services, the CFPB said.
“It aims to address market concentration that limits consumer choice over financial products and services,” the CFPB said.”Consumers will be able to access, or authorize a third party to access data such as transaction information, account balance information, information needed to initiate payments, upcoming bill information, and basic account verification information.”
The new rule would make it easier for consumers to shop around for better rates on products and credit, let them securely share payment information sometimes called pay-by-bank, and strengthen protections against bait-and-switch data harvesting by third parties.
It also gives customers revocation and deletion rights over their information, allowing customers to end data sharing upon request immediately.
The CFPB said the new rule will be implemented in stages, requiring larger institutions to come into compliance sooner than smaller firms.