tl;dr
A CFPB official is concerned that JPMorgan Chase’s plan to charge fintech firms for customer data access is enabled by the agency’s efforts to dismantle a Biden-era open banking rule. The rule bans banks from charging third-party platforms for access to deposit and credit card data to promote fintec...
One official at the Consumer Financial Protection Bureau (CFPB), a federal consumer protection agency, is expressing concerns about JPMorgan Chase’s plan to impose fees on fintech companies for accessing customers’ account data. This official, who remains unnamed, suggests that the agency’s efforts to dismantle an open banking rule introduced during the Biden administration might be enabling JPMorgan to charge these fees.
The open banking rule, finalized last year, prohibits banks from charging third-party platforms like Coinbase, Venmo, and PayPal for access to customers’ deposit and credit card information, promoting competition in the fintech space. However, Russell Vought, the CFPB’s Acting Director, is challenging the rule in court, arguing that the bureau lacks the authority under Section 1033 of the Dodd-Frank Act to forbid banks from charging fees for access through required developer interfaces.
The proposal by JPMorgan has sparked criticism, with fintech advocates warning it could hinder innovation and competition. Graham Steele, former assistant Treasury secretary under Biden, attributes the troubles in fintech to the Trump administration’s moves to dismantle the CFPB and roll back Biden-era regulations, saying these actions have negatively impacted both the market and consumers.
JPMorgan CEO Jamie Dimon defended the fee plan during a quarterly earnings call, citing the high costs involved in setting up and maintaining secure API systems. Nonetheless, opposition remains strong among cryptocurrency firms and investors. Alex Rampell of Andreessen Horowitz characterized the fee proposal not as a revenue initiative but as a strategy to restrict competition, warning that if successful, other banks might adopt similar practices.