America’s banking community is fighting back against a fintech, crypto-led letter to President Donald Trump, accusing fintech of trying to “mislead” the administration into backing Biden-era policies and “free ride” off of major banks.
Top fintech and crypto companies as well as venture capital firms wrote to President Donald Trump on Wednesday, urging him to stop American banks from charging fees for access to customer data.
“We urge you to use the full power of your office and the broader administration to prevent the largest institutions from raising new barriers to financial freedom,” the letter to Trump stated.
“We cannot allow the most powerful, entrenched banks to close the door on a more open and modern financial system,” the letter concluded.
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JPMorganChase and other top banks have argued that these fintech and crypto companies need to recoup the cost of transmitting the data. On the obverse side, the fintech and crypto companies believe that charging a fee for transferring a customer’s data would create another barrier to alternative fintech platforms.
Some also believe this debate is more about trying to get the Trump administration to back Biden-era Consumer Financial Protection Bureau (CFPB) policies.
“This policy debate has nothing to do with fintechs or crypto, and the data middlemen know that. Aggregators like Plaid are exploiting the goodwill these industries built up — and gaslighting the Trump Administration into supporting Biden-Era policies — to protect their bottom lines and shield themselves from any responsibility for consumer protection,” an industry insider and former adviser to several prominent Republicans told Breitbart News.
The Bank Policy Institute (BPI), American Bankers Association (ABA), and the Consumer Bankers Association (CBA) said in a response to the fintech and crypto letter:
Banks don’t charge consumers fees to access their data, and because of banks’ innovation and investments in secure systems, consumers have access to more financial products and secure services than ever. Today’s letter is another extraordinary example of data aggregators and middlemen trying to mislead the Administration into supporting Biden-era policies for personal profit and the right to free ride off the major investments banks have made in protecting consumers’ data.
The double standard these companies want to perpetuate, where they may charge fees for service while banks are expected to provide the same service to these private companies for free, is absurd. The Administration has taken bold actions to strengthen U.S. competitiveness, enable innovation and protect consumers from bad actors. We look forward to seeing a personal financial data rights rule that comports with the statute, protects consumers and ensures a level playing field to encourage innovation, a process the Consumer Financial Protection Bureau has already begun.
BPI stated in a release that banks have strongly backed the administration’s efforts to scrap regulations that restricted banks’ ability to work with crypto companies.
Banks also process billions of data requests from fintech companies every month and these data pulls come at a cost. They said that charging API data access is standard for most major companies, including Amazon Web Services, Microsoft Azure, X, and Google, including some companies named in the fintech letter.
A JPMorganChase systems employee wrote to retail payments head Melissa Feldscher, “Aggregators are accessing customer data multiple times daily, even when the customer is not actively using the app. These access requests are massively taxing our systems.”
“Calling a bank’s API when a user is not present once they have authorized a connection is a standard industry practice supported by all major banks in order for consumers to get critical alerts for overdraft fees or suspicious activity,” a Plaid spokesperson told CNBC.
The conflict between the banking system and fintech centers around a Biden-era CFPB rule that stipulated how customers can transfer data to third-party platforms. The CFPB plans to leave the rule as is while it seeks to update the rule.
If the Biden-era rule is struck down, or if it is substantially changed by the Trump administration, the debate may not be should data aggregators be charged for data access, but how much they would have to pay.
JPMorganChase has reportedly had productive conversations with many data aggregators on how to “right-size” data pulls.
“I think both sides fully acknowledge there are things they could do to right-size call volume,” a person familiar with the negotiation between JPMorganChase and the data aggregators told CNBC.
Sean Moran is a policy reporter for Breitbart News. Follow him on X @SeanMoran3
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