The new rules may make it easier to switch banks

The new banking rule will make this easier change bank or financial service providerbut he is already facing rejection from the financial industry.

The Open Banking Rule, finalized by the Consumer Protection Bureau (CFPB) last week, requires financial institutions, credit card issuers and other financial providers to unblock a customer’s personal financial data and share it with another provider free of charge upon the customer’s request, the CFPB said in a statement.

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Customers have been complaining about the hassle of changing banks or lenders for a long time. It may take several days or weeks for the money to transfer, and you will need to manually transfer all automatic payments coming from your account, which may delay payments.

The federal agency said the new rule would promote competition and make it easier for customers to switch to financial providers with better rates and services. The CFPB says it will also help lower credit prices “and improve customer service in the payments, credit and banking markets.”

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“Too many Americans are stuck with financial products with terrible rates and service,” CFPB Director Rohit Chopra said in a prepared statement.

What is open banking?

According to payments app Stripe, open banking is the practice of banks and other financial service providers sharing customers’ financial data through application programming interfaces (APIs) with the customers’ consent.

Why are banks and credit card companies opposed to open banking?

The Banking Policy Institute, a banking lobby group and the Kentucky Bankers Association filed a lawsuit challenging the new Open Banking rules. The lawsuit accuses the CFPB of overreaching and claims that open banking could put customers’ financial data at risk, Reuters reported.

At a recent banking event, JP Morgan Chase CEO Jamie Dimon said the industry plans to fight the new rules.

“We’re going to fight,” Dimon said at the event Lever. “We’re going to win this one, too.”

If the rule survives industry challenges, it will take effect in 2026 for large banks and in 2030 for smaller institutions.