FOR IMMEDIATE RELEASE
Oct. 21, 2024

CONTACT:
Carter Dougherty
carter@ourfinancialsecurity.org

CFPB Proposal Empowers Consumers and Protects Sensitive Financial Data
Shift to open banking creates a more competitive financial services marketplace 

Today, the Consumer Financial Protection Bureau (CFPB) finalized its Personal Financial Data Rights proposal, a long-overdue measure that can help create a more consumer-friendly and competitive financial services marketplace. 

The new measure gives consumers greater control over their personal financial data by allowing them to move it between institutions more easily and securely. Also, people who are not satisfied with their financial institution will no longer have to surrender their banking history or data from their previous transactions when they switch financial service providers. Data access ends immediately when an account is closed. 

“Everyone’s been through the cumbersome, time-consuming, and privacy-eroding process of closing one bank account and opening another,” said Christine Chen Zinner, senior counsel at the Americans for Financial Reform Education Fund. “Banks should compete for customers based on the quality of products, services, and prices, instead of essentially making them captive consumers by creating barriers that make it a hassle to switch to a new bank.”

Americans for Financial Reform Education Fund (AFREF) supported this rule and encouraged the CFPB to make sure the rule was as strong as possible when it was first proposed as a means to help people control and protect their personal financial data.

The rule also improves privacy protections by allowing companies to collect only personal financial data that is needed to fulfill their duties; they will not be allowed to sell this data to third parties for unrelated reasons. Currently, many banks sell or share personal financial data to third parties like data brokers or other companies for marketing or other purposes. Customers’ financial data is especially valuable to data brokers because it includes not just consumer purchases but also can include their history of deposits, savings, investment, credit, and other information. 

“The new privacy protections offered by this proposal will help protect people from having their sensitive personal financial data collected and sold to third parties without their knowledge or consent,” said Chen Zinner. “This rule will protect all consumers, but critically it provides long overdue protections for the most financially vulnerable consumers, including lower-income consumers and consumers of color, who are often explicitly targeted for predatory lending products due to aggressive data collection practices.”  

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