The Consumer Finance Protection Bureau (CFPB) has ruled that, essentially, consumers own their banking data and banks must make it easy to retrieve that data and, if they wish, transfer it to another institution. That’s big news and another chapter in the FTC’s recent ruling that companies must make it as easy to quit a subscription as it is to sign up for it. I wrote about that here and here.
It’s the same issue as the FTC’s ruling because banks have been using the same tactics to keep their customers in the stable. They make it as hard a possible to transfer your data and thus change banks. The banks are, of course, upset that they will have to share their data with competitors but as the EFF says, it’s not their data, it’s yours.
All of this is important because banks charge wildly different fees for their various services and their policies make it impossible to comparison shop. Banks love that, of course, and you can be sure that they won’t acquiesce to this ruling quietly. Indeed, they are already suing the CFPB to block the rule. It’s for our own good, of course. Just ask them. The CFPB, it seems, is specifically authorized to make rules such as these so the banks may have a hard time convincing the courts.
Let’s hope that the CFPB prevails and that the banks are forced to stop these abusive practices. Let them, for once, compete on the quality of their offerings rather than laying down bear traps.