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Now bank customers will be able to control the processing of their data upon request.
The Consumer Financial Protection Bureau (CFPB) has approved a rule that strengthens people's rights to manage financial data. Banks, credit card issuers, and other financial companies are now required to transfer customer data to another provider free of charge upon request.
The bureau explained that the innovation will allow customers to choose those banks and services that offer the best interest rates and service. This should reduce the cost of loans and improve the quality of services in the banking sector.
The new rule applies to bank accounts, credit cards, e-wallets and payment apps. People will be able to receive data about their transactions, balance, upcoming payments themselves and use them to switch to other services. The data can also be transferred to third parties – for example, if you need to get a loan. At the same time, companies are required to provide data free of charge and without hidden conditions in the small print.
The purpose of the rule is to develop an "open banking" system in which there is more competition and choice for customers. The CFPB is implementing a long-planned law that was passed back in 2010, but has only now begun to take effect. In the future, the bureau will continue to develop rules for other products and services to expand the consumer experience.
The rule also introduces strict measures to protect personal data. Companies will only be able to use customer information with their permission and only for specific purposes. The data cannot be used for commercial interests without the user's knowledge, for example, for advertising. The CFPB is also fighting the dangerous practice of "screen scraping", where third-party services access data through customer logins and passwords.
People will be able to revoke access to their data at any time. If access is terminated, companies will be required to delete all data by default. Under normal circumstances, access permission can be retained for a maximum of one year unless the user renews it.
The rule will begin to be introduced in stages. Large companies will be required to comply with the requirements by April 1, 2026, and smaller companies by April 1, 2030. Some small banks and credit unions are exempt from the new regulation.
Source
The Consumer Financial Protection Bureau (CFPB) has approved a rule that strengthens people's rights to manage financial data. Banks, credit card issuers, and other financial companies are now required to transfer customer data to another provider free of charge upon request.
The bureau explained that the innovation will allow customers to choose those banks and services that offer the best interest rates and service. This should reduce the cost of loans and improve the quality of services in the banking sector.
The new rule applies to bank accounts, credit cards, e-wallets and payment apps. People will be able to receive data about their transactions, balance, upcoming payments themselves and use them to switch to other services. The data can also be transferred to third parties – for example, if you need to get a loan. At the same time, companies are required to provide data free of charge and without hidden conditions in the small print.
The purpose of the rule is to develop an "open banking" system in which there is more competition and choice for customers. The CFPB is implementing a long-planned law that was passed back in 2010, but has only now begun to take effect. In the future, the bureau will continue to develop rules for other products and services to expand the consumer experience.
The rule also introduces strict measures to protect personal data. Companies will only be able to use customer information with their permission and only for specific purposes. The data cannot be used for commercial interests without the user's knowledge, for example, for advertising. The CFPB is also fighting the dangerous practice of "screen scraping", where third-party services access data through customer logins and passwords.
People will be able to revoke access to their data at any time. If access is terminated, companies will be required to delete all data by default. Under normal circumstances, access permission can be retained for a maximum of one year unless the user renews it.
The rule will begin to be introduced in stages. Large companies will be required to comply with the requirements by April 1, 2026, and smaller companies by April 1, 2030. Some small banks and credit unions are exempt from the new regulation.
Source
