Consumers in the US will soon have the right to direct their banks to share their financial data with other institutions, thanks to new open banking regulations established by the Consumer Financial Protection Bureau (CFPB).
According to the CFPB, this ruling aims to empower consumers to switch to financial service providers that offer better rates and services, ultimately leading to lower loan prices and enhanced customer service in the payments, credit, and banking sectors. CFPB Director Rohit Chopra stated, “Too many Americans are stuck in financial products with lousy rates and service. Today’s action will give people more power to get better rates and service on bank accounts, credit cards, and more.”
The new provisions allow consumers to access and share data linked to their bank accounts, credit cards, mobile wallets, payment applications, and other financial products. They will have the ability to access or authorize a third party to retrieve information such as transaction details, account balances, payment initiation data, upcoming bill information, and basic account verification. Financial institutions are mandated to provide this information free of charge.
Furthermore, third parties will only be permitted to collect, use, or retain data strictly to deliver the services requested by the consumer. They will not be able to utilize this data for unrelated business purposes, such as using it for targeted advertising.
Chopra emphasized that the Personal Financial Data Rights final rule brings the United States closer to a competitive, safe, secure, and reliable open banking system.
The compliance process will roll out in phases, with larger financial institutions required to meet the new rules before smaller ones. The largest firms must comply by April 1, 2026, while the smallest covered institutions will have until April 1, 2030.