CR praises proposal that aims to promote competition and better opportunities for consumers by making it easier to switch banks and other financial service providers
WASHINGTON, D.C. – A proposed Personal Finance Data Rights rule announced by the Consumer Financial Protection Bureau today would help consumers seek out better deals and services if they are unhappy with their bank or other financial institution and prevent misuse of their personal data, according to Consumer Reports. The CFPB’s “open banking” proposal gives consumers greater access to and more control over their personal financial data and is expected to foster greater competition and innovation among traditional financial service institutions and new fintech startups.
“Consumers should be able to access and control their financial data and leverage it to find better and more affordable financial products and services,” said Delicia Hand, director of financial fairness for Consumers Reports. “The CFPB’s proposed rule gives consumers the power to take control of their financial data and prevent it from being monetized and manipulated to their detriment. It will encourage banks and financial institutions to compete more by offering higher quality products at more affordable prices and enable consumers to break up with unsatisfactory companies and find better opportunities.”
Hand continued, “Ultimately, this proposal could help consumers gain access to more affordable credit, budget their earnings, and save towards their goals. The consumers who are likely to benefit the most from this proposed rule are those who traditionally have been excluded and underserved by the financial system.”
Under the CFPB’s proposed rule, consumers would have the ability to grant permission and share data about their use of checking and prepaid accounts, credit cards, and digital wallets with third parties at no charge. The proposed rule aims to give consumers the power to share their data to access new services and competing products, while limiting its use to that intended purpose and preventing it from being used for surveillance and manipulation by financial institutions or fintech companies. The proposal gives consumers the right to revoke access to their data and require that it be deleted by third parties.
Michael McCauley, micael.mccauley@consumer.org