Latest news with #SteveBoms
Yahoo
16-07-2025
- Business
- Yahoo
Fintechs blast JPMorgan over data fees
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Financial technology companies assailed a move by JPMorgan Chase to begin assessing fees for access to customer financial data. The move likely foreshadows stricter control over consumer data by large banks if a federal court rejects a Consumer Financial Protection Bureau rule that was aimed at opening up access to data. JPMorgan, the largest U.S. bank, has been sending notices the past two weeks to data aggregators notifying them of new fees for data access. A new breed of fintechs are eager to use that data to compete with banks to provide financial services. The fees, which would be imposed as soon as September, come as banks and fintechs litigate in federal court over the future of the CFPB open banking rule. U.S. banks have sued to block the rule issued during the Biden administration before it takes effect next year. 'It's hard to look at this decision by Chase as anything other than a cynical attempt to take advantage of regulatory uncertainty and an about-face by the CFPB,' Steve Boms, executive director of the Financial Data and Technology Association North America, said Monday in an interview. 'I think they're banking on the court throwing the rule out.' Under the Trump administration, the CFPB has adopted the banks' position that the rule is unlawful and should be vacated by a federal judge overseeing bank groups' lawsuit in Kentucky. Nonetheless, fintechs disagree. Americans deserve the 'freedom' to control their financial data, the chief executive of the Financial Technology Association, Penny Lee, said Monday in an emailed comment. 'Charging for financial data access undermines that freedom and threatens to jeopardize millions of Americans' access to the financial services of their choice,' Lee said. 'This action is designed to crush competition, hold back American innovation, and lock consumers into bank-only products.' The Bank Policy Institute, which counts JPMorgan as a member, sued the bureau last year, arguing that the CFPB had exceeded its statutory authority in crafting the open banking rule, which stems from Section 1033 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. U.S. District Judge Danny Reeves in Lexington, Kentucky, ruled in May that the FTA can intervene to defend the rule. The banks also argue that the rule does not adequately specify liability protections for data fraud when they share information with third parties, nor does it allow, they contend, for appropriate compensation to banks for data security and other investments they've made. The open banking rule specifically precludes banks from charging for access to customer data. 'We've invested significant resources creating a valuable and secure system that protects customer data,' a Chase spokesperson, Emma Eatman, said Monday in an email. 'We've had productive conversations and are working with the entire ecosystem to ensure we're all making the necessary investments in the infrastructure that keeps our customers safe.' Bloomberg News first reported JPMorgan's planned fee schedule on Friday. The access fees are tiered and tied to the amount of JPMorgan data a fintech connects to, Bloomberg reported, citing a person familiar with the fee structure. User access for JPMorgan Chase data for payments is more expensive than non-payments, according to the report. The American Fintech Council called JPMorgan's fees 'a shameless attempt to further entrench the position of incumbents.' 'At a time when consumers are demanding more flexibility, transparency, and control over their financial lives, placing a tollbooth on data access will harm the very families a safe financial system is meant to serve,' AFC Chief Executive Phil Goldfeder said Sunday in a statement. No other banks have followed JPMorgan's lead on such fees, so far, according to Goldfeder and the FTA. A BPI spokesperson said Monday that 'we don't talk with our members about those decisions.' San Francisco-based Plaid, which says it connects about 8,000 financial apps with approximately 12,000 financial institutions in the U.S., Canada and Europe, would be among the large fintechs affected by fees. A Plaid spokesperson referred queries to the FTA and FDATA-North America. Other large fintechs that access financial data include Venmo, the payment app owned by PayPal Holdings; Block, the parent of CashApp, Square and Afterpay; Lehi, Utah-based data aggregator MX Technologies; and Dave, a Los Angeles fintech company which focuses on financial services tools. JPMorgan's imposition of fees is 'defensive' and 'a testament to the growing value and importance of fintechs in the broader payments ecosystem and the threat they pose to traditional banks,' Mizuho Securities analyst Dan Dolev wrote Friday in a client note. The CFPB enacted the open banking rule in October 2024, with the first implementations, at the largest banks, with provisions for it to take effect in July 2026. JPMorgan has incurred costs to set up technical connections and other infrastructure for open banking and should be remunerated, CEO Jamie Dimon said Tuesday on a quarterly earnings call with analysts. 'It costs a lot of money to set up the APIs and stuff like that to run the system,' he said. 'We just think it should be done and done right. And that's the main part.' Dimon also alluded to the open banking conflict in his April letter to shareholders, saying that third parties 'want full access to banks' customer data so they can exploit it for their own purposes and profits' and that banks should be paid for such information. Dimon wrote that JPMorgan has 'no problem with data sharing but only if it is done properly.' Part of that proper sharing involves companies seeking consumer data to 'pay for accessing the banking system and payment rails,' Dimon wrote. Boms said the proposed fees — which he called 'prohibitive' — reflect 'a philosophical worldview at the very top of the bank that says, 'These are our customers, and we're not going to allow them to use services that compete directly with us.'' Caitlin Mullen contributed to this article. Clarification: This article has been updated to clarify the BPI's statement on its members' business decisions. Recommended Reading Open banking to survive Trump, fintechs say
Finextra
06-05-2025
- Business
- Finextra
CFPB to revisit open banking rule
In its latest about-turn under the Trump administration, the Consumer Financial Protection Bureau is preparing to reopen its recently finalised open banking rule, according to Bloomberg Law. 0 In October, the CFPB published the Personal Financial Data Rights final rule, designed to give Americans the right to instruct their banks to share their financial data with third party providers. However, according to Bloomberg Law, citing sources, the Trump administration is now set to reopen the rule and potentially vacate it. The plan comes as banks raise concerns about potential liability for data breaches and the ability to charge for access to data, says Bloomberg. The banks also want to the ability to stop firms that abuse their access to customer data from the system. It is not known whether the rule will be amended or eliminated. Steve Boms, CEO of open banking advocates FDATA North America, says: 'Reopening this rulemaking means stalling financial innovation and prolonging uncertainty for both businesses and consumers in America." However, the plan has long proved unpopular with many in the traditional financial industry. Within days of the rule being finalised, the Bank Policy Institute and Kentucky Bankers Association filed a lawsuit against the CFPB, alleging that the regulatory agency overstepped its authority with the new rules. The suit argues the rule puts the entire responsibility of protecting customers on the banks, while the CFPB takes no accountability for the oversight or supervision of data recipients. For the CFPB, this is the latest example of a starkly different approach under Trump as it scales back its activities and reverses previous positions under acting Director Russell Vought. In March it ditched an interpretive rule declaring that pay-in-four BNPL lenders should be treated in the same way as credit cards. In recent weeks it has also dropped a host of lawsuits, including against JPMorgan Chase, Bank of America and Wells Fargo over fraud on the Zelle P2P payments network. Meanwhile, a rule that would give the watchdog oversight of tech giants such as Apple, Google and X, that offer digital payment apps and wallets has been killed off by the Senate and House of Representatives.
