Americans get back control of their financial data under new CFBP rule

Consumers will have more control over their financial data and privacy because of a new rule the Consumer Financial Protection Bureau issued Tuesday.
The Personal Financial Data Rights require financial institutions, credit card issuers and other financial providers to unlock a consumer’s personal financial data and transfer it to another provider free at the consumer’s request, the bureau said. Implementation will be in phases, with larger institutions required 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 the rule.
With the new rule, consumers will be able to more easily change financial providers, which will create more competition among providers to win and keep clients’ business, the bureau said. Ultimately, that will help lower prices on loans and improve customer service across payment, credit and banking markets, it said.
“Rather than constantly create a better product or service, we see ‘innovation’ on how firms can make it harder to cancel or switch,” said bureau director Rohit Chopra in prepared remarks at the Federal Reserve Bank of Philadelphia. “Rather than advertise the true price up front, we see mysterious junk fees pop up later in the process. Instead of making things simple to work across different brands, we find ourselves buying proprietary plugs, switches, and other accessories that only work with specific products. These types of issues cost consumers billions.”
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The rule allows consumers to access and share data associated with their bank accounts, credit cards, mobile wallets, payment apps, and other financial products, the consumer protection bureau said.
Only they, and not third parties, can decide how their data can be used, the agency said. By giving Americans more control over their information, it said, it expects less “screen scraping,” a practice that typically involves consumers providing their account passwords to third parties who use them to access data through online banking portals.
“With screen scraping, there are risks of overcollection of data, inaccurate data sharing, and the spread of login credentials,” Chopra said.
Consumers with shorter credit histories, like young people, will especially benefit because lenders will be able to use data held by other institutions, such as information on income and expenses, to offer credit or better loan terms, it said.
“This could also benefit merchants, who face high fees to accept payments through Visa, Mastercard and other incumbent payment networks,” Chopra said. “Some merchants have plans to incentivize payments through these alternatives through cashback, discounts, and rewards.”
The rule ensures “consumers are in control of their own financial data,” said National Economic Adviser Lael Brainard in a statement. “The new rule will make it easier for consumers to switch banks and use financial services that better fit their needs, provide greater opportunity for innovative new businesses to compete, and lower costs for consumers.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and  subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.