US banks are preparing for a significant change in how consumer financial data is shared, following the finalization of a new rule by the Consumer Financial Protection Bureau (CFPB).

This regulation requires banks to give customers access to their financial data, allowing them to request, download, and transfer this information to other lenders or financial service providers without any charge.

The open banking rule is intended to promote competition in the financial industry, making it easier for consumers to switch providers in search of better rates.

CFPB Director Rohit Chopra emphasized that this initiative aims to reduce loan costs and enhance services by fostering a more competitive environment among financial institutions.