CFPB’s ‘Open Banking’ Rules Allow Consumers to Control Financial Data

New banking rules just announced by the U.S. Consumer Financial Protection Bureau (CFPB) will affect how financial institutions use and share consumer data with each other. The new “open banking” mandates require banks, credit card issuers, and other financial providers to share data for free and without hassle when consumers request it.

The goals of the open banking rules are to generate competition within the financial industry and make it easier for consumers to easily switch institutions for better or alternative products and services. The new guidelines fall in line with other countries, such as the U.K., that have introduced similar policies.

“Too many Americans are stuck in financial products with lousy rates and service,” CFPB Director Rohit Chopra 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.”

Under the CFPB’s open banking rules, consumers have more control of their information. Consumers will be able to decide how data associated with bank accounts, credit cards, mobile wallets, and other financial products will be used and who can use it.

The CFPB’s ‘Open Banking’ Rules

A consumer can move personal data from one bank to another, keeping a history of interactions with the previous institution intact. Banks are prohibited from charging a fee or making the customer jump through hoops to complete the transfer.

Ideally, banks and lenders will offer more competitive interest rates on savings accounts and loans. Access to loans and credit cards will likely be easier for consumers with short credit histories since lenders will have access to additional data, like past and current income, from a previous institution.

At a consumer’s request, data access can be revoked, and the financial company should delete the information. The process to remove an institution’s access must be direct and straightforward.  

The new guidelines prevent third parties from misusing consumer data for their own benefit. Specifically, the practice of “screen scraping” will be discouraged. Screen scraping is when a consumer provides personal account information to a third party to access online banking portals.

In May, the CFPB tightened rules on “buy now, pay later” services. After numerous complaints, the announced guidelines gave consumers rights to dispute charges and get refunds for unwanted purchases.

The CFPB’s open banking rules were first proposed over 14 years ago but have just now been finalized. Large financial institutions will need to comply with the new mandates by April 1, 2026, with smaller firms following by April 1, 2030.