Latest news with #RohitChopra
Politico
4 days ago
- Business
- Politico
Crypto crashes CFPB open banking rule
Editor's note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. Quick Fix The Trump administration has spent months working to undo Biden-era policies loathed by big banks — such as restrictions on credit card late fees or overdraft charges. The CFPB's 'open banking' rule governing consumer data access, finalized last year by Director Rohit Chopra, by all indications was on that same chopping block. In May, Acting CFPB Director Russ Vought dropped the agency's defense of the rule in court and joined with big banks in urging a federal judge to nullify the policy entirely. But in a last-minute twist that's becoming a hallmark of Trump's second term, the crypto world stepped in. Top digital asset trade associations joined with retailers and fintech groups in urging the White House to preserve the Biden-era rule. Crypto billionaire Tyler Winklevoss took to social media to blast banks like JPMorgan Chase for fighting against the rule. David Sacks, Trump's crypo and AI czar, called the situation 'concerning.' And the president's son, Donald Trump Jr., who's also involved in crypto ventures, offered his public support, too. The result? The CFPB quickly halted its push to get a judge to kill the rule and is poised to launch an 'expedited' rulemaking to rework the policy. The bureau in the coming days is expected to release regulatory notice soliciting public input on key questions about how to reshape the policy. A CFPB spokesperson said that the administration had always planned to write a new rule governing consumer data on an accelerated basis. The crypto industry's ascendant clout in Washington adds a new wrinkle to the fight over the CFPB's 'open banking' rule as the bureau goes back to the drawing board on the policy. The Biden regulation was finalized after years of debate over how the CFPB should implement section 1033 of the Dodd-Frank Act, which gives consumers the right to access their financial data. The rule set the ground rules of a long-running battle between traditional financial institutions and fintech firms over how consumer data flows across an increasingly complex financial ecosystem of payment services and financial apps, which now include services offered by a wide range of crypto companies. Fintechs and crypto firms rely on that data-sharing — transferred through middleman data aggregators — to power their services and make it easy for customers to set up accounts and move money. A major sticking point in any future policy will be whether and how much a bank can charge financial technology firms for access to its customers' data. Such fees are prohibited under the current Biden-era rule, and fintech and crypto companies say it's important to keep requiring banks to make available that data for free. 'Open banking and consumer permissioned data-sharing are foundational to America's financial future — driving innovation, expanding competition, and empowering consumer choice,' said Penny Lee, president and CEO of the Financial Technology Association. 'Recent moves by the nation's biggest banks to impose fees on data access underscore the need for clear rules of the road for open banking.' Banks say that they need to have the ability to charge for access to data infrastructure that they invest heavily in and are responsible for keeping secure. 'Our position is clear and has not changed: maintaining the safety and security of sensitive consumer financial data has always been and will continue to be our number one priority,' said Paige Pidano Paridon, co-head of regulatory affairs at the Bank Policy Institute, which brought the legal challenge against the rule. 'One big outstanding question is why banks would still be expected to comply with the current rule that the CFPB has said it is going to substantially overhaul. This bizarre procedural situation is creating confusion and needs to be resolved.' It's Thursday — For econ policy thoughts, Wall Street tips, personnel moves or general insights, email Sam at ssutton@ Driving the day Tariff rapid fire: President Donald Trump said Wednesday he'll impose 100 percent tariffs on tens of billions of dollars of imported semiconductors used in consumer electronics and other products, but indicated he would not charge companies that commit to making chips in the U.S., Doug Palmer reports. Trump made the announcement at an event alongside Apple CEO Tim Cook, who said his company would increase its investment in the U.S. by $100 billion. Trump imposed an additional 25 percent in tariffs on India over the country's purchases of Russian oil, following through on his threat to ramp up pressure on Moscow to end the war in Ukraine. As our trade team colleagues report, those tariffs will add to the 25 percent levy Trump unveiled on India this month. Wall Street Bank execs at the White House: Citi CEO Jane Fraser and Bank of America CEO Brian Moynihan met with Trump on Wednesday to discuss plans to privatize mortgage giants Fannie Mae and Freddie Mac, Reuters reports. Moynihan's visit to the White House also comes after Trump earlier this week personally called out the executive, accusing Bank of America of rejecting him as a customer after his first term. Treasury U.S. targets popular Mexican 'narco-rapper' — The Trump administration on Wednesday sanctioned a popular Mexican rapper, El Makabelico, accusing him of laundering money on behalf of a major drug cartel operating in the country. The Treasury Department said the rapper, whose real name is Ricardo Hernandez Medrano, sent 50 percent of his royalties from streaming platforms directly to the Cartel del Noreste and that his concerts were used to launder money to the organization. A spokesperson for YouTube, where he had nearly 2.8 million subscribers, said the company 'terminated YouTube channels associated with the sanctions' announced earlier on Wednesday. A spokesperson for Spotify, where El Makabelico had more than 3 million monthly listeners, said the company was 'reviewing the decision' and would comply with any legal obligations. On The Hill Still seeing SVB ripples — Sens. Bill Hagerty (R-Tenn.) and Angela Alsobrooks (D-Md.) are pushing to amend the must-pass defense authorization bill to extend deposit insurance to transaction accounts used by businesses and municipalities. Under their bipartisan amendment, deposits would be backed by the Federal Deposit Insurance Corp. for up to $20 million if they're parked at institutions with less than $250 billion of assets. In separate statements, Hagerty said the amendment is 'vital to strengthening regional and community banks.' Alsobrooks said the change to deposit insurance would protect payroll accounts used by small businesses. In a speech earlier this year, Treasury Secretary Scott Bessent said that the administration planned to work with Congress to extend deposit insurance to business payment accounts. New push to overhaul SBA loans: Sens. Todd Young (R-Ind.) and Amy Klobuchar (D-Minn.) introduced two pieces of legislation that would expand and modernize the Small Business Administration's 504 loans, one of the agency's more popular lending programs, Katherine Hapgood reports. At the regulators A deep dive on who uses the CFPB: 'Data obtained by ProPublica through a public records request shows that many of the same Republican members of Congress who have targeted the CFPB for cuts have collectively routed thousands of constituent complaints to the agency.' Banking Deposit milestone: The Community Development Bankers Association and National Bankers Association announced that a new initiative to channel funding to banks serving low-income and minority banks had reached $100 million of bank deposits. The program, which relies on IntraFi, makes it easy for large depositors seeking to maximize FDIC insurance to place funds at more than 80 participating community development financial institutions and minority depository institutions. Jobs report Parker Mantell is now chief speechwriter and comms adviser to SEC Chair Paul Atkins. He previously was executive writer to the president at Yale University and is an NRSC press and Cavalry LLC alum. — Daniel Lippman
Yahoo
6 days ago
- Business
- Yahoo
FICO Stock Has Plunged By Over 20% Since White House Announced Decision Allowing Mortgage Lenders To Use Alternative Credit Reports
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. The Federal Housing Finance Agency's recent decision to allow government-backed mortgage lenders to use alternative credit reports on mortgage applications had a dramatically negative impact on Fair Isaac Corp. (NYSE:FICO) stock. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership FICO has enjoyed a virtual monopoly in U.S. mortgage lending for decades because Fannie Mae and Freddie Mac were only authorized to use FICO reports when processing mortgage applications. Your FICO score and payment history are the two main pieces of information that credit reporting agencies Equifax (NYSE: EFX), Experian and TransUnion (NYSE: TRU) furnish to lenders when you apply for a mortgage. Don't Miss: The same firms that backed Uber, Venmo and eBay are investing in this pre-IPO company disrupting a $1.8T market — $100k+ in investable assets? – no cost, no obligation. FICO shares closed at $1,869 on July 7. The share price plunged to $1,565 after the FHFA announced its policy shift on the following day. Since then, FICO shares continued trending sharply downward before hitting a year-low of $1,471 on July 15. The price has recently rebounded slightly to the low $1,500 range. FICO creates an algorithm that determines your credit score and then sells that information to the credit reporting agencies. This is why you pay for credit reports when applying for mortgages. However, the costs associated with paying for credit reports have been rising for homebuyers. That's complicated by the fact that today's borrowers may apply for mortgages with multiple banks to get the lowest interest rate. However, each lender charges a separate application fee for the credit report. These application fees can be as high as $50, which means it could cost buyers hundreds of dollars just to compare different loan terms. Trending: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. These fees can be a significant barrier to prospective borrowers. That's part of why the Consumer Financial Protection Bureau launched an investigation into what it calls "junk fees" in the homebuying process in May 2024. The CFPB cited the rising cost of credit reporting fees as an area of focus of the probe. The Wall Street Journal reports that the fee FICO charges reporting agencies for pulling reports has jumped from $0.60 in 2018 to $4.95 today. "The market for credit scores has long been dominated by one company's algorithm: the Fair Isaac Corporation, which sells the FICO score," said then-CFPB Chair Rohit Chopra in a 2024 speech to the Mortgage Bankers Association. "Mortgage lenders have shared that costs for credit reports and scores have increased, sometimes by 400% since 2022." That could be about to change because of the FHFA's decision allowing lenders to use VantageScore. That announcement clears the way for Fannie Mae and Freddie Mac to use a different type of credit score, known as the VantageScore. This system can benefit consumers because it also factors in on-time rent payments into an applicant's credit score. By contrast, FICO scores were mainly calculated by using the applicant's payment history with their creditors. The VantageScore system was formulated by FICO's customers Experian, Equifax and TransUnion. Both algorithms will award scores between 300 and 850. The higher an applicant scores on the scale, the more likely it is that their loan application will be approved. It also goes a long way towards determining what interest rate the borrower will pay. Applicants with higher scores are perceived as better credit risks and get lower interest rates as a would-be borrowers and loan applicants have long complained that the FICO scoring system did not factor their rent payments into the scoring equation. This is particularly ironic because monthly rent, like a mortgage, would be the borrower's single biggest expense. The idea of a scoring system that didn't give borrowers credit for on-time rent payments has never seemed completely logical. There is still doubt among lending professionals, like TD Cowen housing policy analyst Jaret Seiberg, about whether the use of VantageScores will replace the traditional FICO scoring for Fannie Mae and Freddie Mac. The Journal cited a research note from Seiberg saying, "This is a win for VantageScore, but we don't see it as an immediate risk to FICO." FICO shareholders will certainly be hoping that Seiberg's analysis is correct. If he's right, FICO's stock could eventually reverse its downward momentum and recover. On the other hand, FICO stock may face more losses if VantageScore takes hold with major lenders and becomes a major player in the mortgage industry. Read Next: , which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. Image: Shutterstock This article FICO Stock Has Plunged By Over 20% Since White House Announced Decision Allowing Mortgage Lenders To Use Alternative Credit Reports originally appeared on Sign in to access your portfolio
Forbes
24-07-2025
- Business
- Forbes
Information Is Extraordinarily Valuable. How Dangerous To Make It Free
Creative / Feature: Waze und Google Maps-App auf einem iPhone (Photo by Hoch Zwei/Corbis via Getty ... More Images) Google purchased Waze for $1.15 billion in 2013. Why would it pay so much for an app that people can access for free, and that charges them nothing for usage? The answer is that information is incredibly valuable. While Waze once again doesn't charge anyone for usage and directions, how people use it along with when and where people go with it is surely valuable to businesses eager to meet and lead the needs of an acquisitive public. The price paid for Waze back when $1 billion was $1 billion is useful to think about as conservatives get all worked up about the removal of Rule 1033 from the GENIUS Act. The Rule, one whose implementation was initially cheer-led by former CFPB head Rohit Chopra, mandates that banks and other large financial institutions provide outside businesses free access to information gathered about existing bank customers. Something's wrong with this Rule, which is more than an understatement. To understand why, please yet again contemplate the 2013 acquisition of Waze. If the information produced by the latter rated such a high acquisition price, stop and think what large financial institutions could command for databases pregnant with knowledge about the saving, investing, and buying habits of hundreds of millions of clients and depositors. In contemplating the above, stop and think about the shareholders of the largest financial institutions, and their understandable expectation that the institutions they own maximize their profit-making potential. Considered in that way, Rule 1033 quickly becomes much more than a costly regulatory burden foisted on large financial institutions. Worse than that, it becomes a subsidy for the myriad other businesses inside and outside of finance eager to poach some of the most remunerative customers in the world while armed with some of the best information. No business can give away something so valuable for free. From there, just ask why FinTechs and other non-bank entities would be so interested in accessing information about big bank customers in the first place. Rest assured that the interest isn't rooted in staring lovingly at the data. See above. What banks go to great expense to compile and store in highly protective fashion is extraordinarily valuable to businesses outside the banking system for the same reason that it's valuable to the entities compiling it. Translated, they're eager to use the information gathered by the big banks with an eye on courting those same customers with products and services not just tailored to meet their individual needs, but to lead them. Which easily explains why banks and financial institutions have begun charging a fee for access to the information. It's not just that there are substantial costs associated with compilation, it's that there must be compensation for creating crucial knowledge that is so valuable to so many. What's puzzling is that these truths are even being debated. More puzzling is that some of those debating them are conservatives who, at least in the past, would have been the first to defend businesses against price controls foisted on them from the proverbial Commanding Heights. Rule 1033 isn't just wrongheaded and a price control, it's also anti-customer exactly because it mandates giving away what's crucial and valuable for free. If there's no value in producing essential knowledge about customers, what's the point of continuing to create what businesses of all stripes very much require to meet and lead the needs of their customers?
CNBC
22-07-2025
- Business
- CNBC
Former CFPB Director on GENIUS Act: Would've liked to see much stronger protections for consumers
Former CFPB Director Rohit Chopra joins 'Squawk Box' to discuss the passage of GENIUS Act, what it means for crypto, private market access in 401(k)s, and more.
Forbes
18-07-2025
- Business
- Forbes
Why Are Conservatives Telling Businesses What They Can Charge?
Information Technology Abstract Concept There's no such thing as a 'free lunch.' Unoriginal, trite, simplistic, and most of all, obvious? Yes on all four. But sometimes the obvious requires stating. Consider the outcry among conservatives over the decision to remove Rule 1033 from the much commented on GENIUS Act. While the Trump administration is known to very much dislike Rule 1033, former Consumer Financial Protection Bureau (CFPB) head Rohit Chopra was a big fan of it. Which should have conservatives wondering why conservatives support what Chopra did. For background, Rule 1033 states that financial institutions (think large banks) must provide their customers secure access to their financial data, transactions, account balances, and other information. The Rule reads as a tad superfluous in consideration of the happy truth that banks would go to the expense to compile and provide this information either way, but nonetheless. What's important is that in possessing direct access to their own financial information, customers of financial institutions have not only had their own crucial information at their fingertips, they've been able to pass the information on to other financial services providers. Crucial here is that they've been free to do so of their own accord, and with an eye on securing the help of financial service providers operating outside the banks and other financial institutions compiling the information. Where it becomes interesting and puzzling at the same time is that Rule 1033, beyond mandating that big banks provide the information to their customers, also mandated that the banks not charge a fee to outside financial service providers accessing the data. Which brings us back to the outcry mentioned up top, and the rather unoriginal mention of the old as economics truth that there's no free lunch. Thought of in terms of the banks and financial institutions that compile consumer data in highly secure fashion, there's a cost associated with doing so. And with costs in mind, the compilers of the information have understandably and ethically begun charging outside financial service providers for accessing the information. What's happening is understandable simply because there are once again costs associated with compiling the data. Banks have a right to profit, no? As for the ethical aspects of charging for the data, banks have shareholders whom they serve, and who understandably don't want to pay for a market good that is given away for free. Which brings to conservatives and their emotional outbursts about the scrapping of a Rule that vandalizes simple economics. On the face of it, how very 'man bites dog' that conservatives are siding with a government-produced Rule that tells for-profit businesses what services they can and cannot charge for. Worse, imagine disallowing charges for information access that is plainly valuable to those attaining it. Translated, outside financial service providers aren't acquiring data at the pleasure of the owners of it because they want to stare at it lovingly, rather they want to profitably access the information themselves by offering would-be customers their own suite of financial products based on information compiled. Yet the 'big' banks are the enemy here? More realistically, the banks charging a fee for their essential work is banks acting like businesses. There was a time when conservatives reveled in just that kind of profit-motivated activity.
