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The US CFPB Proposes New Financial Data Sharing Rules To Boost Competition
The United States Consumer Financial Protection Bureau (CFPB) came up with a proposal on Thursday to boost competition between financial technology firms. This is good news for consumers as they would be able to transfer their data between financial services more easily. The consumers were actually waiting long for this proposal for change.
The proposal came as a banking draft rule, which is expected to finalize in 2024. These new rules will allow more competition in the market. The customers will have the power to transfer their money if they feel a particular service is not good enough, leading to more power to switch. Reuters received the news from Rohit Chopra, the director of CFPB.
According to Reuters.com,
“Currently, consumers face varying conditions for accessing their own financial data depending on lenders’ policies, and a lack of industry norms that harms customers, according to the CFPB. Giving consumers the right to control and share their data with the companies of their choice should open a new world of products and services, according to the CFPB.”
The United States still lacks open banking laws like the UK, Europe, and other countries. In the US, Congress mandated the rule after the financial crisis of 2007-09. As per the reform law of Dodd-Frank Wall Street, customers have the right to access their data “upon request” from banks. The law states that customers can access costs, usage, and transaction histories, and the CFPB must set rules to standardize data sharing.
In July 2021, the White House urged the CFPB to set the rules running as the President wanted to push for more competition. On the other hand, various fintechs and lawmakers have also been pressing CFPB to bring the rules soon. Both the CFPB and the White House National Economic Council jointly unveiled the rule.
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