Unofficially, a consumer protection official from the federal government is raising concern over JPMorgan Chase’s plans to charge fintech companies fees for customer account information.
Bloomberg reports that an unnamed official of the Consumer Financial Protection Bureau believes JPMorgan Chase may have the chance to charge fees because the agency is trying to stop the open banking rule enacted by the former US president Biden.
Several sources, who requested anonymity to discuss the controversy, claim that the same official has discussed the matter with fintech companies.
As a means to promote competition, the CFPB’s open banking rule was finalized in 2013. It prohibits banks from charging third parties, such as Coinbase Venmo, and PayPal, to gain access to customers’ credit and deposit card information.
Acting Director Russell Vought of the CFPB is asking a federal court to overturn the ruling on various grounds. He argues that section 1033 Dodd-Frank Act does not allow the Bureau to prevent banks from charging fees to maintain and provide access to the developer interfaces required.
JPMorgan Chase critics say that the proposed fee structure could have a negative impact on fintech.
Graham Steele is the former Assistant Treasury Secretary for Financial Institutions in Biden’s administration. He says that the Trump Administration has been trying to shut down the CFPB, and remove Biden policies. This will have a negative impact on the fintech sector.
By repealing the regulation without thinking through the implications, the government has caused many problems for the market and consumers.
At the time this article was published, there were no comments from the CFPB.
Jamie Dimon, JPMorgan’s CEO, defended this fee proposal on the second quarter earnings call.
It costs money to setup the APIs, and other stuff to protect the system.
Crypto companies, investors and cryptocurrency firms are among those who criticize the fees charged by banks.
Alex Rampell is a general partnership at the venture capital company Andreessen-Horowitz.
It’s not about creating a new source of revenue. This is about strangling the competition. If they succeed, then every other bank will do the same.
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The post JPMorgan Chase Plans to Charge Fintechs For Customer Account Data Raising concerns With At Least One CFPB official: Report could be updated as new information becomes available.
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