The Consumer Financial Protection Bureau yesterday announced the final rule aimed at giving consumers more control over their personal financial data. The rule, part of the CFPB’s broader push toward “open banking,” requires financial institutions to allow consumers to transfer their data to other providers for free. The rule aims to spur competition, lower costs, and improve services across the banking, credit, and payments markets. It was immediately met with a lawsuit, filed by a pair of financial services organizations.
Why it matters: By requiring financial institutions to make consumer data accessible for free, the CFPB hopes to make it easier for consumers to switch providers. The rule could also help consumers with limited credit history, such as younger individuals, by giving lenders access to additional financial data, helping them secure loans on better terms.
The final rule, known as the Personal Financial Data Rights rule, requires financial institutions to:
- Transfer consumer financial data to other providers at no cost
- Allow third-party access to transaction information, account balances, and payment details
- Implement new privacy protections limiting data usage to specific consumer-authorized purposes
- Move away from “screen scraping” practices toward more secure data sharing methods
Between the lines: Compliance with the new rule will be rolled out in phases, with larger financial institutions required to comply by April 1, 2026, and smaller institutions having until April 1, 2030. Importantly, some small banks and credit unions are not covered by this rule.
What they’re saying: “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’s final 1033 rule is a promising step forward to protect Americans’ financial data privacy,” said Rep. Patrick McHenry [R-N.C.], chair of the House Financial Services Committee. “As Republicans have said for years, Americans should have greater control over their sensitive financial data. Consumers should know where their data is going, how it’s used, and be able to terminate collection of their data by certain firms.
