- Key insight: The Consumer Financial Protection Bureau is stuck between two powerful industries — banks and fintechs — that are at odds over whether banks should be able to collect fees for sharing consumer data.
- Expert quote: "No matter what they propose or finalize, either the banks or the fintechs are going to litigate it."— Ashwin Vasan, partner at the consulting firm FS Vector
- Forward look: A 90-day review period is underway after the CFPB submitted its open-banking proposal to the Office of Information and Regulatory Affairs in early August.
The Trump administration will soon have to choose sides in a high-stakes fight between banks and fintechs — and though officials are expected to try to find a compromise that's acceptable to both industries, experts say litigation is highly likely.
The fight centers on whether banks should be allowed to charge fintechs fees for access to customer data under a new open-banking rule.
The Consumer Financial Protection Bureau is reportedly trying to appease both banks and fintechs with a plan that would permit access to consumer data up to a certain threshold, at no cost, but allow banks to charge fees above a set amount. That approach, reported on in June by
No matter the details, the plan, which is expected to be released soon, is likely to be a major about-face from a Biden-era rule that prohibited fees. The earlier rule has since been set aside.
The fee question has driven a wedge between banks and fintechs. The Bank Policy Institute, which represents many of the nation's largest banks,
"The statute is silent on fees, and no matter what the CFPB proposes, I would expect either banks or fintechs to litigate," said Ashwin Vasan, a partner at New York consulting firm FS Vector.
Former acting CFPB director Russell Vought initially asked a court to pause the BPI litigation while the bureau explored its options. But last year Vought had to backtrack after JPMorganChase
Banks and fintechs have been lobbying the White House and Treasury for the past year, observers experts said, in a sign of how difficult it will be to appease both sides.
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Fintechs claim the Trump administration's about-face on fees amounts to price-setting, or a toll on data access. They say charging fees undermines one of the primary goals of the rule, which was to empower consumers to more easily switch banks by giving them access to their own financial data to foster competition.
Penny Lee, the FTA's president and CEO, said that consumers, not banks, own their data and shouldn't have to pay to access it.
"We urge the CFPB to maintain the ban on data access fees — including data rationing — and uphold consumers' right to securely share their data with the apps and services of their choice," she said in an email.
In June, the FTA sent a letter to Vought, arguing that charging fees would give banks an advantage.
"Data rationing proposals are unlawful and unworkable," the FTA said in the letter. "A data access fee tied to bank-set pull limits would … allow the largest banks to decide how much competition they are willing to tolerate, using consumer data as the toll gate."
The Bank Policy Institute said in a statement that decades of investments from banks and fintechs have enabled consumers to have "secure and easy access to their financial data."
"The robust data sharing ecosystem that exists today is the result of private sector efforts, not a government mandate," the BPI's statement read. "A proposed rule should not interfere with this thriving ecosystem or jeopardize the safety and security of consumers' sensitive financial data."
Eyal Sivan, a consultant and host of the Mr. Open Banking podcast, said a CFPB proposal likely will include several alternative fee structures that will allow banks to recoup their costs and enable data to be widely shared.
"Fees are being charged now, even though the current rule says they shouldn't be," said Sivan, noting that the BPI litigation has been stayed pending the CFPB's new rulemaking. "The new rule has to acknowledge the new reality and put some guardrails around it and essentially bless what JPMorgan has already done" by charging fees, he said.
"On the other hand, a lot of the folks complaining about fees are massive companies in their own right that have been riding off this data for years and years, grabbing as much data as they want for free and building empires on the back of this free information, which is not fair and has to stop," Sivan added.
Other experts said the CFPB is going to have to provide legal reasoning and a cost-benefit analysis to explain why the bureau under the Trump administration thinks banks have the authority to charge fees, when the Biden-era agency said it couldn't. Some said they expect the CFPB to provide carveouts for community banks.
The open-banking rule is expected to be finalized under Brian Johnson, a Capital One Financial executive who has been nominated but not yet confirmed by the Senate to be the CFPB's next permanent director, replacing Vought. Vought, who is the director of the Office of Management and Budget, has remained at the CFPB as a senior advisor.
Johnson is expected to be leading the bureau when an open-banking rule gets finalized in late 2027 or 2028.
Though fees have captured the most attention, the CFPB has also identified other issues that it intends to change, including the definition of what constitutes a consumer's representative..
Another issue involves the "secondary use" of consumer data by fintechs for purposes other than to provide the specific product or service the customer has requested.
Fintechs are pushing for the CFPB to allow for secondary use, which the Biden-era rule strictly limited. Fintechs want to be able to use the data for purposes such as selling or licensing it to other third parties,
targeting advertising, and cross-selling products.
Yet another significant issue is when the open-banking rule will take effect.
Compliance with the previous rule was set to begin early this year for the large banks, and in 2029 for the smallest. The BPI lawsuit upended the compliance dates, pushing them out further, in what many saw as a win for banks.
"The law is now 15 years old, and the rulemaking process has been ongoing across three administrations with several years still to go," said FS Vector's Vasan. "It's an example of Congressional intent being effectively hampered by the realities of the rulemaking process."
Congress mandated in 2010 through section 1033 of the Dodd-Frank Act that banks provide consumers with access to their own financial data.
