Crypto and Fintech Groups Urge Trump to Defend Open Banking

By: Eva Baxter

A coalition comprising major trade groups from the crypto, fintech, retail, and restaurant industries has collectively appealed to President Donald Trump to take a decisive stand in support of the nation's open banking framework. This call to action comes in the wake of legal challenges from the country's most prominent banks which threaten to disrupt consumer data rights and potentially thwart innovation initiatives linked to the administration's fintech agenda.

On July 23, a letter was dispatched to President Trump, signed by organizations like the Blockchain Association, Crypto Council for Innovation, and the Financial Technology Association, alongside several national retail groups. The letter asserts that major banks are striving to dismantle the progress fostered by open banking rules implemented during Trump's first term. This is notably achieved through the imposition of hefty data access fees on fintech companies and by legally contesting the open banking regulations.

Originally designed to empower consumers by facilitating secure, cost-free connectivity between their bank data and third-party services, the open banking rule is currently endangered as large banks pursue legal routes to halt its execution. This has significant implications for the usage of digital wallets, payment apps, and investment platforms, all of which depend on seamless bank connectivity. Notably, institutions like JPMorgan have already laid down plans to levy charges on fintech companies for accessing customer data, with fees varying based on data usage.

The coalition's letter emphasizes the critical juncture approaching on July 29 when the administration must present its brief in the ongoing case. It urges the government to make a resolute declaration affirming consumers' proprietary rights over their financial data. Consumers should retain autonomy in sharing their data with chosen fintech or crypto services, without bearing additional costs. The trade groups warn that failure to uphold consumer rights could endanger the U.S.'s leading position in fintech and digital asset innovation, particularly amid rising global competition aggressively adopting open banking and blockchain-based financial services.

This collective appeal is not just about preserving consumer interests; it's also about maintaining America’s competitive edge in the innovative realms of fintech and crypto. As international markets increasingly embrace open banking and blockchain technologies, any erosion of consumer data rights domestically could impede the U.S.'s standing as a frontier of financial technology innovation.