Legal experts with close ties to the Trump administration and the Consumer Financial Protection Bureau (CFPB) hosted a seminar to discuss “Open Banking” — the complex policy under the Dodd-Frank Act that determines how consumers can connect their banking data to budgeting apps, payment programs, and a wide range of financial tools.
Todd Zywicki, a law professor at George Mason University who worked closely with President Donald Trump’s transition team, joined Paul Watkins, an alum of the first Trump administration’s CFPB, in a panel moderated by executive director of Consumers’ Research (CR) Will Hild. The event was hosted by the Federalist Society.
“Who controls your financial data and who decides how it can be used?” Hild opened the discussion by asking. “This has become one of the most consequential policy questions of the digital banking era. As Americans increasingly rely on fintech apps, digital wallets, and online banking tools, Section 1033 of the Dodd Frank Act has emerged as a flashpoint in the debate over whether consumers truly own their financial information or whether control remains concentrated in the hands of large banks.”
The Washington Reporter has closely covered the debate and its implications for industries like crypto. Panelists discussed the importance of an open banking system that empowers consumers to control their own data and prevents overreach and monopolistic behavior from big banks, by preventing fees or tolls on that data access.
“Big banks have control over data here that gives them essentially a monopoly power, and they have an incentive to try to charge very high fees; they have an incentive to make their systems incompatible and basically keep consumers trapped,” Zywicki said.
Watkins also pointed out how negotiations with big banks up to this point are tilted in the banks favor. “You’re talking about a group of banks that are all competing against fintechs,” Watkins explained, “and the banks have all of the data. That’s just not an even playing field for negotiations, we’re starting out with an incredibly inefficient market.”
The finalized rule from the Trump administration could come over the next few weeks, sources tracking the matter told the Reporter.
