CFPB finalizes rule that lays the foundation for open banking

The Consumer Financial Protection Bureau (CFPB) is poised to transform the U.S. financial landscape with its final rule mandating open banking, aiming to empower consumers and promote competition.

CFPB Director Rohit Chopra highlighted the importance of this rule, stating, 'Too many Americans are stuck in financial products with lousy rates and service. Today's action will give people more power to get better rates and service.'

The new open banking rule emphasizes data privacy, ensuring that personal financial data is shared only at the consumer's request and for specified purposes, with a one-year access limit.

In a significant move, the CFPB is activating Section 1033 of the Dodd-Frank Act, aligning the U.S. with open banking frameworks seen in the U.K. and E.U., thereby setting the stage for innovation.

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