The Consumer Financial Protection Bureau (CFPB) has proposed a set of rules to allow customers in the US to have more control over their financial data and accelerate the shift towards Open Banking.

The proposed Personal Financial Data Rights rule aims to prevent financial institutions from retaining exclusive access to an individual’s data and forces them to share data if users request it. The CFPB said that this will promote competition and allow customers to switch providers for better services.

The CFPB said that the way individuals access their data varies across different financial institutions, explaining that these inconsistencies can allow some organisations to manipulate information to their advantage.

As part of the new rules, customers would have the right to walk away from bad services and get their data without charge in a secure manner, it added.

Additionally, the government agency says that the rules would mean organisations would no longer be allowed to collect data using “risky” practices and there would be more protection against the misuse of data.

The requirements would be implemented in phases, with larger providers being subject to them much sooner than smaller ones, the CFPB said. Banks and credit unions which have no digital interface with their customers would be exempt from the requirements.

“With the right consumer protections in place, a shift toward open and decentralized banking can supercharge competition, improve financial products and services, and discourage junk fees,” said CFPB director Rohit Chopra. “Today, we are proposing a rule to give consumers the power to walk away from bad service and choose the financial institutions that offer the best products and prices.”

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