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Key Takeaways
- A new Consumer Financial Protection Bureau rule requires banks and other financial institutions to share customer data with competitors at the customers’ request, making it easier to switch accounts.
- Customers who switched banks could have their account information and transaction history transferred to the new provider, allowing things like bill payments to continue seamlessly.
- The changes will go into effect starting in 2026.
If you’ve thought about switching your bank account or credit card for a better deal but balked at the hassle involved, it might soon be time to give it a second look.
New banking rules are about to make it easier to shop around between competing providers of consumer financial services. The Consumer Financial Protection Bureau (CFPB), the government’s consumer watchdog, finalized rules Tuesday requiring banks and other financial companies to transfer customer data to a new provider at the customer’s request. The changes will go into effect for the largest companies starting in April 2026, with smaller ones having until 2030 to comply.
The rule changes, announced last year in preliminary form, are intended to make financial services more competitive and remove some of the obstacles that people encounter when they try to switch payment providers or banks to get better service or earn higher returns on their deposits or get lower rates on loans while protecting customers’ privacy.
“Switching a bank account or credit card now involves the risk of screwing up an auto-debit for a bill or incurring an unwanted fee. People are even warned that canceling an account might hurt their credit score or their ability to get another loan,” Rohit Chopra, director of the CFPB, said in prepared remarks scheduled to be delivered at the Federal Reserve Bank of Philadelphia Tuesday. “It’s no surprise that for millions of people across the country, they’re still using the same credit card that they first got when they became an adult. I know I’m guilty of this.”
The rule, part of a broader effort by the bureau to encourage an “open banking” system, could also spur more payments to be made by FedNow and other instant payment services rather than credit card payment networks, Chopra said.
The rule also gives customers the option of sharing their bank account transaction histories with mortgage lenders, potentially allowing people with little traditional credit history to qualify for loans.