No matter what the bank says, it’s YOUR money, YOUR data, and YOUR choice

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The Consumer Finance Protection Bureau (CFPB) has just finalized a rule that makes it easy and safe for you to figure out which bank will give you the best deal and switch to that bank, with just a couple of clicks. 

We love this kind of thing: the coolest thing about a digital world is how easy it is to switch from product or service to another – in theory. Digital tools are so flexible, anyone who wants your business can write a program to import your data into a new service and forward any messages or interactions that show up at the old service.

That’s the theory. But in practice, companies have figured out how to use law – IP law, cybersecurity law, contract law, trade secrecy law – to literally criminalize this kind of marvelous digital flexibility, so that it can end up being even harder to switch away from a digital service than it is to hop around among traditional, analog ones.

Companies love lock-in. The harder it is to quit a product or service, the worse a company can treat you without risking your business. Economists call the difficulties you face in leaving one service for another the “switching costs” and businesses go to great lengths to raise the switching costs they can impose on you if you have the temerity to be a disloyal customer. 

So long as it’s easier to coerce your loyalty than it is to earn it, companies win and their customers lose. That’s where the new CFPB rule comes in.

Under this rule, you can authorize a third party – another bank, a comparison shopping site, a broker, or just your bookkeeping software

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