The Consumer Financial Protection Bureau (CFPB) is nearing a final decision on the hotly-debated “Open Banking” rule 1033, which, among other things, would determine whether banks can extract fees any time consumers access their own financial data. The Washington Reporter has covered this debate extensively.
The Reporter has learned that while circumstances could change in the next few weeks, the CFPB’s current plan is a mid-July Notice of Proposed Rulemaking that will allow banks to charge these hotly debated fees, with a structure based on the volume of transactions, which conservative groups, consumer advocates, the crypto community, and current and former members of the Trump administration have previously strongly opposed.
Sen. Cynthia Lummis (R., Wyo.), wrote in an comment letter to the CFPB on this rule that “we cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation, and increase costs. If the new 1033 rule permits volume-based fees without meaningful guardrails, it risks entrenching incumbents, slowing fintech and crypto development, and leaving everyday consumers — particularly those who would benefit most from lower-cost financial alternatives — paying the price.”
Todd Zywicki, a member of the Trump transition team who has advised the CFPB described the fees as “tolls on data” that allow banks to control data and essentially exercise monopoly power.
In a similar vein, John Czwartacki, a veteran of President Donald Trump’s first administration’s CFPB, described the big bank fees as an effort to “snuff out innovation on the vine,” and an effort to “build up walled gardens” around legacy institutions.
Donald Trump Jr. also weighed in on the debate, joining crypto leader and Trump ally Tyler Winklevoss in calling out the bank’s effort to use fees to destroy competition, Tyler wrote, “banksters are trying to kill fintech and crypto companies. They want to take away your right to access your banking data for FREE via-third party apps like Plaid and instead charge you and fintechs exorbitant fees to access YOUR DATA… This is the kind of egregious regulatory capture that kills innovation, hurts the American consumer, and is bad for America.”
David Sacks, co-chair of the President’s Council of Advisers on Science and Technology has also called the big bank fees “concerning.”
On the specific issue of volume-based fees, Alex Rampell, general partner at Andreessen Horowitz, said, “if it suddenly costs $10 to move $100 into a Coinbase or Robinhood account, fewer people will do it — or if it costs $10 to get a cheaper loan from a fintech, consumers may be forced to take a worse one from the incumbent bank instead. For crypto platforms specifically, which rely on seamless account linking to enable on-ramping, even modest per-call fees can impose costs that are prohibitive relative to low-dollar transaction sizes — effectively pricing less wealthy Americans out of digital asset participation.”
As the Reporter previously reported in October, a group of crypto and fintech trade associations, including the Financial Technology Association, the Blockchain Association, the National Retail Federation, and several others, wrote that the proposed fees are an “attack” on Americans’ rights and freedom. They add that those fees “create a barrier to entry for innovative competitors and limiting options for consumers.”
Consumer advocacy organization Save our States has campaign aggressively against big bank fees, arguing in one ad that the fees were an effort from the big banks who debanked President Trump to “sabotage President Trump’s affordability agenda,” and would drive up costs for families at the worst possible time. The Reporter was the first to cover Save our States’s latest campaign as well.
Sources tell the Reporter that a finalized rule could come as soon as mid-July, and advocates still hold out some hope of the CFPB reversing course on the fee issue.
