JPMorgan Chase’s plan to charge fintech companies for access to customer account data is causing a stir, with at least one official at the Consumer Financial Protection Bureau (CFPB) expressing serious concerns.
CFPB Concerns
A high-ranking CFPB official, who chose to remain anonymous, believes that the agency’s attempt to overturn a key open banking rule could be paving the way for JPMorgan Chase’s controversial fee structure. This official is reportedly discussing the matter with worried fintech firms. The open banking rule, finalized last year, was designed to prevent banks from charging companies like Coinbase, Venmo, and PayPal for accessing customer data, ensuring a level playing field. However, the CFPB’s acting director is now trying to get a judge to scrap the rule, arguing that it exceeds the agency’s authority.
Criticism Mounts
Critics argue that JPMorgan Chase’s fee proposal could severely hinder the fintech industry’s growth. Former Biden administration official Graham Steele points to the attempt to overturn the rule as a major contributor to the problem, stating that it’s causing significant issues for both the market and consumers.
JPMorgan’s Defense and Further Criticism
JPMorgan Chase CEO Jamie Dimon defended the fees, citing the high costs associated with setting up and maintaining the necessary systems. However, this explanation is being met with skepticism. Venture capitalist Alex Rampell calls the move a blatant attempt to stifle competition, warning that other banks will likely follow suit if JPMorgan gets away with it. Cryptocurrency companies and investors are among those voicing strong opposition to the proposed fees.