'JPMorgan CEO Jamie Dimon says 'it's time to fight back' on regulation' from https://www.reuters.com/business/finance/jpmorgan-ceo-says-i...
The comment from Dimon is the cherry on top.
'Dimon said he was not against open banking but noted that it could compromise consumer data and lead to fraudulent money transfers and he was set to fight it.'
His bank is happy to accept fraudulent checks and ACH transfers all day long, but his primary opposition to open banking rules is his overwhelming concern for his customers. Riiiight.
You have an entire commercial banking industry that has been dependent on being able to capture inexpensive deposits from unsophisticated financial services consumers (they make the spread between the ~0% they offer on demand deposits and what they can lend at), as well as charging exorbitant fees to move value around, and that is all coming to an end with open banking and FedNow instant payments. Sad folks gonna sad. You're a utility, sorry to say.
(obligatory credit union plug here)
https://mycreditunion.gov/about-credit-unions/find-join-star...
How is profit motivation supposed to help the customers of a bank? On paper this is just as customer-hostile as with any other industry—profit is waste that fundamentally should be going to employees and customers.
I don't think the issue here is that he doesn't understand. I think the issue is he's lying.
He's almost certainly starting with the policy that he wants for his own self-interest, then working backwards from that to come up with BS arguments for it that sound good. He's not an idiot so almost certainly knows full well what he's doing.
https://www.frbservices.org/financial-services/fednow/organi...
"the next conservative President should order the immediate dissolution of the agency—pull down its prior rules, regulations and guidance"
So don't get too used to your new financial data rights. We'll know Tuesday if you'll ever get a chance to apply them.
"Down with bureaucracy!" "Isn't that bureaucracy? A whole organization that focuses on waste?" "Yeah, but it's MINE. I only want down with YOUR bureaucracy."
So while it's true the CFPB would remain funded, it would also struggle to act effectively without senior staff to sign off on projects and pay salaries. This OMB rule is how Project 2025 is going to be executed, and it will go beyond chaos as they erase every federal agency including several that we all rely on within less than a year.
It's not outlandish at all
Of course you can, if people accept it. This dynamic is massive in the last three decades and is only going to grow.
The large banks just destroyed, through intense lobbying, what was called Basel III Endgame - a long-planned, carefully implemented regulatory structure designed to prevent future catastrophes like 2008. The Federal Reserve pretty much openly said they gave into pressure.
The problem with capitulating to make peace is that you don't get peace: The attacker is emboldened and tries for more, and now has precedent and momentum in the eyes of third parties.
With hindsight we know that the rules were far from sound and allowed banks to take on massive risk which they dumped on the taxpayers as usual.
Your bank would make it illegal to even talk about your banking transactions with anyone other than your bank if they could.
The gist of it: if you give it to someone, that’s on you.
I absolutely refuse to hand over my credentials and cannot wait for the practice to die.
I found this out because the company I was contracting for was trying to get the open banking API working against one of the banks and we ended up having to speak to four parties over an simple encoding issue that no one at any org could understand. It was basically the spider man pointing meme. One set of outsourcers blaming another set of outsourcers while their local managers were doing the same. No one even understood or communicated the issues.
When you do something at a bank and it takes longer than expected it’s that sort of shit happening.
Working adjacent to medicine,banking, supply chain, and some other fields, I'd say that most people don't realize that everything is just csv files and sftp servers underneath. You'd assume these fields would be using realtime web services to communicate with each other, but even the ones that seem roughly realtime are often using scheduled file transfers of batched data. A lot of the integration is essentially bat files and shell scripts converting between one type of csv to another. It's bandaids and bailing wire all the way down.
If you are banking with Wells Fargo or BoA, you are getting exactly what you signed up for. A customer base so large that they have no choice but to treat you like a row in a database (i.e., a piece of shit).
I disagree with this. Medium/regional banks often have the same dynamic where the people in the branches have to call in to centralized help lines to get anything done, rather than employees being empowered to exercise judgement and act. But yet their systems can be way less polished than the megabanks. And from what I've seen their fees are often higher and less forgiving (not that you should be paying fees anywhere though, as an individual retail customer)
My main combo is local bank/creditunion for cash/notary/medallion/safedepositbox/cashierschecks and then online-only large bank because it pays real interest and has a less janky UI. (although with the ever-ratcheting SMS login nags, I'm starting to question that last bit). Both refund third party ATM fees.
On the larger topic, I'm disappointed to see this regulatory push has very little to do with making sure users can get frequent automated access to their own transaction data. Continually verifying the transactions on your account is basically the necessary and sufficient condition for preventing the bank making you responsible for their being defrauded.
I'd argue there's exactly four banks to choose from if you plan on holding more than the FDIC limits at any one bank as I'm not as confident the rest would have an implicit "too-big-to-fail" guarantee.
- Private insurance is stil a thing. Banks are like some of the most underwriter-legible institutions known to man.
- Four is a bigger number than two anyway.
For better or worse US governmental policy is to encourage myriad amounts of banks, and it’s worked given we have more than any other nation by a long stretch.
In fact a lot of the disfunction in our banking system comes from the fact that we have too many banks.
No knowledgeable person thinks Americans lack for choice in banking.
This is a good decision by the CFPB but it's a drop in the bucket.
You can tell by the way the Federal agencies are still, you know, there. Doing things.
It doesn’t mean you shouldn’t be able to export your data, but this is a sensitive operation that maybe shouldn’t be too easy. People are definitely going to be tricked. The individualistic, libertarian assumption (that customers are responsible adults who know what they’re doing) is known to be false by anyone who has worked in a customer support role.
Congress passed an explicit law saying financial companies have to offer the ability outlined in this rule. They state the CFPB needs to make rules to enable it and now they are doing so.
This entirely fits within the current Supreme Court doctrine around regulatory agencies.
Now, that’s not to say there might not be some other constitutional objection the the law itself…
Actually it didn't. S1033 of the CFPA states a financial institution will upon request of a consumer provide covered information about their financial accounts in a digital format usable by consumers. The rule relies on an expansive interpretation of the statutory definition of "consumer", which is a natural person or "an agent, trustee, or representative" thereof. The agency asserts that representative can be any third party and off of this says banks have to make a developer interface available for them to access, that ironically it does not mandate actual consumers, i.e. natural persons like you and I, can access.
This expansive interpretation will not survive judicial review. The canons of statutory interpretation do not allow it, e.g. agent and trustee are fiduciary relationships, as they are mentioned before "representative" it limits the potential scope to other types of fiduciary relationship (ejusdem generis and noscitur a sociis). A fintech is not a fiduciary and has no obligation to act in your interest. It's a typical arms-length commercial transaction.
Whether or not the agency's goal is noble is besides the point. It has plainly and obviously gone way beyond the statutory authority granted to it by Congress.
[1] https://consumerdatastandardsaustralia.github.io/standards/#...