Crypto and fintech groups urge Trump administration to defend CFPB's open banking rule
Quick Take The Consumer Financial Protection Bureau finalized a rule last year requiring banks, credit unions, and others to make available consumers’ data. In the letter on Tuesday, crypto and fintech groups said the open banking rule is needed to preserve the “fundamental principle that financial data belongs to the American people, not the nation’s largest banks.”
Cryptocurrency and fintech advocacy groups are pressing the Trump administration to back a contentious open banking rule that holds sway over consumers' ability to share their financial data.
The Blockchain Association, Crypto Council for Innovation, and the Financial Technology Association, among others, warned that consumer financial data rights are "under attack," while criticizing banks' pushback, in a letter sent Tuesday to the Consumer Financial Protection Bureau.
"The nation’s largest banks want to roll back open banking, weaken consumer financial data sharing, and crush competition to protect their position in the marketplace," they said in the letter.
The CFPB, which aims to ensure consumers are treated fairly by banks and other financial institutions, finalized a rule last year requiring banks, credit unions, and others to make available consumers' data "upon request to consumers and authorized third parties." The Bank Policy Institute, which represents the country's top banks, sued the CFPB, arguing that the agency overstepped and said the rule "jeopardizes consumers’ privacy" and said banks have a responsibility to protect consumers.
The Financial Technology Association pushed back, and in July of this year, the CFPB said it planned to reopen the rule, pausing litigation.
In Tuesday's letter, the groups said the open banking rule is needed to preserve the "fundamental principle that financial data belongs to the American people, not the nation’s largest banks." They warned that not having open banking policies would harm competitiveness.
"Strong open banking policies put us on par with leading economies, including the United Kingdom, Singapore, Brazil, India, Japan, Canada, and the European Union, which all safeguard consumers’ rights to their data," they said in the letter. "If we limit that right, we risk not just today’s financial progress, but American competitiveness and the future of innovation, particularly in fast-moving spaces like artificial intelligence."
The issue has also garnered a reaction from Gemini co-founder Tyler Winklevoss.
"Banks want to gut the Open Banking Rule (1033) so they can tax and control your financial data and remove your freedom to choose the services you want," Winklevoss said on Monday in a post on X. "This is bad for crypto and financial innovation in America."
Comments are due Tuesday on the rule.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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