Consumers should have control over their personal financial data and be free to choose a new bank or other financial service without restrictions.

AARP welcomes the Consumer Financial Protection Bureau’s (CFPB) recent decision to finalize a rule on October 22, which gives consumers the right to transfer their financial data to another provider for free. This means people can more easily shop for better interest rates on bank accounts, loans, payment apps and other financial products, the CFPB explained in a notice of the final rule.

AARP submitted comments in support of the rule, which also establishes strong privacy protections, including the requirement that personal financial information can only be used for purposes requested by the consumer. Third parties will not be allowed to secretly collect or use personal financial data for their own purposes, such as targeted advertising.

Protecting consumers’ privacy — and making it easier for them to find the best deals for their financial needs — is essential, David Certner, AARP legislative counsel and director of legislative policy, told CPFB in advocating for the new ruler.

“AARP believes that consumers should be in control of their personal financial data. Bank account transactional data is among the most sensitive personal information of an individual,” Certner wrote in public comments. “Analyzing, sharing and/or selling data to third parties may put the consumer’s privacy at risk, particularly when done without the consumer’s voluntary consent.

The rule (which will come into force gradually between April 1, 2026 and April 1, 2030, depending on the size of the financial firm) applies to all consumers, but is of particular importance for people over 50 years. Older Americans are key drivers of the global economy; a 2022 AARP study found that while people aged 50 and over make up 24 percent of the world’s population, they accounted for 34 percent of the world’s gross domestic product.

Protecting consumers from fraud

The CPFB Rule requires financial institutions, credit card issuers, and other financial service providers to unlock a consumer’s personal financial data (such as transaction information, account balances, and information necessary for transfer payments) and, upon request, to transfer them to another provider free of charge. cost. This makes it easier and cheaper for consumers to switch banks, lenders or credit card companies and encourages competition among financial service providers.

The ease of transferring financial information also helps consumers who use “pay by bank,” a process that allows suppliers to be paid directly from a consumer’s bank account. This market has long been uncompetitive, the CFPB said, and the new rule will help encourage competition.

“Too many Americans are stuck in financial products with poor rates and service,” CFPB Director Rohit Chopra said in a statement when the rule was finalized. “Today’s action will give people more power to get better rates and service on bank accounts, credit cards and more.”