The big banks are at it again. They enjoy tremendous market power over American consumers, and between government regulation and the shift to digital payments, it’s nearly impossible to function without a bank account. You can barely pay with cash for much of anything anymore. And checking accounts are notoriously sticky – anyone who has tried to switch banks and move their auto-deposits and autopay subscriptions knows it’s a nightmare.
This is exactly how banks have gained power over customer data. Just as third-party payment providers that could bring real competition to the payments system are having their moment, banks are grasping consumer data like a hawk with a fresh catch. It remains a significant challenge for customers to port their financial information to new providers or simply use innovative third-party payment services that could save them money and offer better experiences.
Enter the CFPB’s new rule on personal financial data rights, which is fundamentally reasonable. For an agency that has otherwise struggled to find its policy mission, and one that I have nearly always disagreed with as an agency engaged in regulatory overreach, this time they actually got it right.
Banks enjoy such overwhelming market power over consumers through the payment system that this concentration calls for a regulatory response. The better solution would be to eliminate federal subsidies and protections that give banks their privileged position, but since that’s not happening anytime soon, it’s helpful that the government is at least limiting big bank abuse of customer data.
While the Trump administration works through its approach to Section 1033 rulemaking, JPMorgan Chase is trying to game the system with crushing new fees on data access. Jamie Dimon’s attempt to force the president’s hand while the administration develops rules to preserve open banking represents a naked ploy to consolidate power and box out competition. This is particularly rich coming from Dimon, who has been a longtime ally of Democrats and supporter of the Dodd-Frank Act that created the CFPB in the first place.
Levying fees on customers who want to access their own banking information will destroy Americans’ ability to participate fully in the 21st century economy. The dangerous legal interpretation that banks are pushing would effectively preclude customers from sharing their data with trusted applications acting on their behalf—applications that help them save money, manage their finances, and access credit.
While the banking lobby has admitted that the 1033 rule remains in place during the Trump administration’s rulemaking process, their actions pose a serious threat to consumer rights. Data ownership without data access is not ownership at all—it’s an empty promise designed to maintain the banks’ stranglehold on customer relationships while blocking innovative competitors.
We’ve seen this type of anti-competitive behavior before. In the 1970s, telecom giants tried to maintain their death grip on market control to slow development of mobile phone technology. Regulators rightly recognized this monopolistic behavior and intervened on behalf of the American people, putting us on the path to technological developments that supercharged American innovation and gave consumers unprecedented choice and value.
What the CFPB is positioned to do now is no different. The question is whether they’ll stand up to the same kind of entrenched interests that once tried to prevent Americans from benefiting from mobile communications.
The stakes couldn’t be higher. American leadership in financial technology, digital payments, and artificial intelligence depends on maintaining an open, competitive marketplace where innovative companies can serve consumers directly. When Jamie Dimon tries to impose what amount to toll booth fees on the digital economy, he’s not just protecting JPMorgan’s profits—he’s threatening America’s technological competitiveness.
The solution is straightforward: enforce the existing rule that prohibits these predatory fees while the rulemaking process continues. Consumer data rights shouldn’t be held hostage to the political calendar or bank CEO machinations. Americans deserve the freedom to choose how they manage their money and which financial services serve them best.
The Trump administration has an opportunity to demonstrate that it stands with consumers and innovators over entrenched banking interests. The choice is clear: preserve open banking and American innovation, or let Jamie Dimon and his peers maintain their profitable stranglehold over customer data.
The future of American financial innovation hangs in the balance.
