Fintech and Banks Clash Over Open Banking Rules in High-Stakes Policy Battle

The battle for the future of the financial system has taken a public turn, with fintech firms and traditional banks clashing over open banking regulations. At the heart of the dispute is the long-stalled open banking proposal from the Consumer Financial Protection Bureau (CFPB), initially outlined in the 2010 Dodd-Frank reform and still awaiting finalization 15 years later [1]. Fintech companies like Plaid advocate for the policy as a way to empower consumers to control and freely transfer their financial data across institutions, while banks have raised concerns over security and data integrity [1].

The conflict intensified after the Trump administration’s early move to scale back the CFPB, effectively putting open banking on hold. In response, major banks have begun threatening to impose new fees on fintech firms for accessing consumer data—a move labeled “Operation Chokepoint 3.0” by venture investor Alex Rampell [1]. This has led to a high-stakes lobbying effort from fintech and crypto leaders, who have urged the administration to oppose the proposed fees, framing the issue as a matter of consumer rights and innovation. Banking industry groups have fired back, calling the fintech claims “misleading,” while the restructured CFPB has announced it will reconsider open banking rules [1].

The broader implications of this conflict reflect shifting power dynamics in Washington. Traditionally, legacy banks held significant sway, but the Trump 2.0 administration has seen the rise of a technologically savvy and crypto-backed political cohort that challenges the old guard. The administration’s recent executive order targeting banks accused of politically motivated service denials—rather than regulatory bodies—highlights this new front in the financial landscape [1]. Meanwhile, even as banks begin to embrace once-avoided technologies like crypto, they are losing some of the political leverage that once defined their influence in D.C.

The tension is also evident in the growing role of fintechs in shaping financial innovation, from open banking to AI-driven financial tools. These companies are not only challenging banks on data access but also pushing for a regulatory environment that supports rapid technological integration. Whether the outcome will favor the agile, tech-native upstarts or the established institutions remains uncertain, but the battle has already redefined the fault lines in the financial world [1].

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Source: [1] Inside the battle between the old guard and the upstarts for the future of the financial system (https://fortune.com/2025/08/18/open-banking-fintech-trump-crypto-cfpb-jp-morgan/)