A US regulator has issued a final rule to grant consumers greater control over their financial data with the aim of creating greater choice and increasing competition in the market.

The Consumer Financial Protection Bureau’s (CFPB’s) final rule of the Personal Financial Data Right requires financial institutions, credit card issuers and other financial providers to grant individuals access to their personal financial data and transfer it to another provider upon the consumer’s request, at no cost.

The rule enables consumers to switch away from fintechs and banks that fail to deliver quality service, allowing them to transfer their bank data to another bank without losing significant portions of their banking history.

It will also allow consumers to compare options and move to a competitor offering better rates. This will be especially beneficial for people with shorter credit histories, such as young people, as it allows lenders to access data held by other institutions to help them secure credit or obtain credit on better terms.

The rule bans bait-and-switch data harvesting, as only third parties can collect, use or retain data to deliver the product the consumer requested. Therefore, lenders cannot secretly collect, use or retain consumers’ data for their own unrelated business purposes, such as offering a loan using consumer data that they also use for targeted advertising.

The rule is designed to fuel competition and consumer choice, which will in turn help to lower prices on loans and improve customer service across payments, credit and banking markets.

CFPB Director Rohit Chopra: “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 on bank accounts, credit cards, and more.”