JP Morgan Chase building in New York.
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One policy trend that has continued this year is introduction and assessment, but not the transition, state legislation undergoing banks, credit card companies and other payment processors in new restrictions on the evaluation of credit card exchange fees. These accounts were deposited in more than twelve states this year, but no one came into force, keeping the Illinois as the only state to have such a law on books (though not in force, as its application has stopped awaiting the result of an ongoing legal challenge).
Retail traders, in particular box stores, are among the leading supporters of the legislation to submit credit card exchange fees to new state regulations. A recurring defect with arguments in favor of regulating exchange fees, however, is the tendency to minimize or ignore the significant costs associated with the safe operation of global payment processing networks.
With most state legislative bodies now out of the year for the year, Statehouse’s discussions on exchange fees have been cooled for now. However, banks are now in another political and political battle with an industry that wants to fully take on a significant cost of data for third parties. In this case, it is the billions of dollars associated with safe management and maintenance of sensitive consumers and API. While large -box retailers are driving force behind the proposals for the regulation of exchange fees, intermediary brokers are important supporters of the Open Banking Rule, a Biden era rule issued by the Consumer Protection Office Banks to third parties redeemable for free.
Although banks are already able to charge third parties to access consumer banks to existing contracts, the banks had provided access without any burden waiting for the implementation of Biden Era. This changed, however, after the submission of CFPB under Trump on a summary of a summary judgment to the court, acknowledging that the Agency exceeded its legal authority in issuing the rule. Responding to JP Morgan’s recent announcement that they will start charging data for repeated access to consumer data, data concentrators have been criticized, some of which were misleading or simply false.
On July 19, Tyler Winklevoss criticized “Jpmorgan and Banksters” in a statement Posted on xclaiming that “they want to remove your right to access your bank data free applications via @plaid and instead charge you Fintechs outrageous fees to access your data.”
Winklevoss’s claim that JP Morgan and other banks are trying to “charge you and Fintechs”, is not fully expensive. JP Morgan is not going to charge customers to access their own data. On the contrary, the bank will charge total data and other intermediaries, which have been using JP Morgan’s API for years to access and then sell consumer banks to a variety of stakeholders, including Fintech companies.
Which representatives of the data brokerage, executives and investors do not refer to their attacks on JP Morgan and other banks are the fact that data concentrators are not limited to accessing consumer data when it is necessary to serve the consumer. APIs receive billions of data attraction requests, much more than most customers know. Maintaining the protection of fraud, cyber security and software needed to safeguard consumer data will naturally be burdened for the bank.
The same inaccurate speech points used by Winklevoss were repeated in a joint letter On July 23, sent to President Donald Trump, signed by the Chamber of Progress, the Blockchain Union, the National Retail Federation, the Association of Financial Technologies and a coalition of other commercial associations representing the FINTech, Crypo and Retail sectors. In this coalition letter, the signatories claimed that banks “move to charge excessive pay for access to Fintech and Crypto applications”, which is not true. What banks are moving is to charge data concentrators for repeated access to consumer data.
Biden Open Banking Rule supporters accumulate irrelevant issues
In addition to misleading messages about the entity in which banks will charge the data access fee, along with the nature and frequency of this access, the signatories of the above -mentioned Coalition Letter are trying to forgive the issue of data access charges with the issue of debanking.
The term ‘debanking’ fell into the letter as a complete non -sequitur with no connection or evidence provided to justify the claim. The White House and the members of the Congress are working to end the unjustified and politicized frustration, but this issue is not fully related to the discussion of concentrated data to consumer banks. The only purpose of reporting the discussion in the discussion of data access fees is to associate with something the president does not like, even though they are not related.
“From today, the” Open Banking “rule developed in accordance with Article 1033 of the Consumer Protection Act gives you the right to access your bank data through third -party applications,” Winklevoss said on July 23, adding that banks “brought the CFPB to abandon the Open Banking Rule and Treasury”.
The initial statutes of Section 1033 is short and expresses the intention of providing consumer banks to the customers themselves without any reference to third parties. The law was not intended as a price control brochure for data brokers. What President Joe Biden tried to do in accordance with Article 1033 is one of the numerous cases in which Biden’s rules was criticized as incompatible with the legal intention, so Trump’s administration reverses the course of the court rule.
Data concentrators are not exclusive for progressive experts and politicians. The same speech points have been adopted with voices on the right. An article published in Daily wirefor example, is described Evaluation of data access charges for third -party applications as “an immediate attack on consumer selection, economic innovation and free market”, adding that “the largest bank in America effectively imposes a tax on consumers”. Not even the claim is true.
Although data concentrators and Fintech companies appear to be more at stake by retailers in the race for consumer bank data access, the inclusion of retailers in the coalition under the leadership of Fintech has some logic in it, as discussions about their regulations and regulations. Despite the embarrassing attempts to gather the two, the same cannot be said about discussions about the access fees of consumer banks and politicized frustration. While supporters of Illinois price controls for the exchange fees want credit card companies to fully cover the significant costs associated with the operation of a secure global payment system, data concentrators now want banks to boost the entire API and API Conservation Bill.
“CFPB acknowledges that the median reported cost of an interface programmer per customer is estimated to be $ 3.37 per year,” he notes joint letter Sent to CFPB on August 1st by a free market coalition. “These costs have a significant potential burden on large institutions and G-SIBs that serve tens of millions of customers, as well as an overwhelming blow to Community banks and credit associations already at high regulatory costs.”
“The free data access order for data links will not strengthen consumers,” the Coalition letter of August 1 added. “It is a check of prices that subsidized unjustly grants data intermediaries at the expense of banks and credit associations, forcing the expropriation of sensitive data.
Trump’s application on July 29 for Biden’s open banking order will be granted and the Financial Consumer Protection Office is now in the process of re -registering the rule. Interested in all aspects of this issue will have enough time to make their case, as it will be a matter months before CFPB is completed this regulatory re -registration. Given the high stakes and the capabilities of the previous result, you expect that this issue will remain in the news for a while.
