A growing coalition of US crypto, fintech, and retail trade groups is pushing back against major banks’ attempts to weaken a landmark open banking rule.
Key Takeaways:
- US crypto, fintech, and retail groups are urging regulators to defend against big banks’ efforts to limit open banking access.
- The coalition warns that data access fees and tighter definitions could weaken competition.
- Industry leaders say restricting open banking would leave the country trailing behind global fintech hubs.
In a letter sent Tuesday to the Consumer Financial Protection Bureau (CFPB), groups including the Blockchain Association, Crypto Council for Innovation, National Retail Federation, and Financial Technology Association urged regulators to preserve strong consumer protections in Rule 1033.
The rule guarantees individuals the right to access and share their own financial data with third parties like digital wallets, fintech apps, and crypto exchanges.
Big Banks Push to Limit Open Banking Access, Threatening Crypto Wallet Links
The coalition argues that large banks are trying to narrow who qualifies as a “consumer representative” and introduce fees for data access, a move critics say could choke off connections between the banking system and digital finance platforms such as stablecoin wallets.
“A strong open banking rule is crucial to a competitive, flourishing, and innovative financial services ecosystem,” the groups wrote.
“The largest banks want to roll back open banking, weaken data sharing, and crush competition to protect their market dominance.”
The CFPB finalized its version of Rule 1033 last year, requiring banks and credit unions to make consumer financial data available to authorized third parties.
However, the Bank Policy Institute, which represents the country’s largest banks, sued the CFPB, claiming the rule oversteps legal bounds and jeopardizes privacy.
The regulator later paused litigation and reopened consultations amid intense industry debate.
Crypto and fintech groups say the stakes are high. If banks succeed in imposing barriers, the United States could fall behind global peers like the UK, Singapore, and Brazil, all of which have well-established open banking frameworks supporting fintech growth.
The coalition’s letter warns that restricting data access could not only undermine digital innovation but also limit consumers’ freedom to choose financial services tailored to their needs.
“Financial data belongs to the American people, not the nation’s largest banks,” the letter states.
Industry leaders, including Gemini co-founder Tyler Winklevoss, also joined the discussion, arguing that Wall Street’s lobbying aims to “tax and control” users’ financial data.
“This is bad for crypto and financial innovation in America,” he said in a post on X.
Watchdog Warns Privacy Laws Are Blinding Regulators to Crypto Risks
Last week, the Financial Stability Board (FSB), the G20’s top financial watchdog, cautioned that strict data privacy and confidentiality laws are preventing regulators from properly monitoring the fast-growing crypto sector.
In its latest peer review, the FSB said fragmented national rules and divided supervisory responsibilities have made it increasingly difficult for authorities to share crucial transaction and risk data across borders.
The 107-page report described how these barriers create blind spots that delay cooperation and allow crypto firms to exploit regulatory loopholes by shifting operations between jurisdictions.
While privacy protections remain vital, the FSB warned that limited access to reliable data leaves regulators “blind” to systemic risks.
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