Fintech and crypto groups urge Trump to defend open banking rules as banks sue over data ownership and fees

Fintech and cryptocurrency advocacy groups have intensified pressure on President Donald Trump to defend open banking rules, as major banks challenge the regulations through legal action and financial barriers. A coalition representing the crypto, fintech, retail, and restaurant industries sent a July 23 letter urging the Trump administration to intervene in a lawsuit led by the nation’s largest banks, which argue the rules pose security risks and unfairly burden traditional financial institutions [1]. The letter, signed by groups including the Blockchain Association and the Financial Technology Association, emphasizes that financial data ownership should rest with consumers, not banks, framing the issue as a core American value tied to innovation and personal liberty [1].

The legal dispute centers on a finalized 2024 open banking rule that grants consumers the right to share their financial data with third-party apps, including crypto exchanges and stablecoin wallets. This framework, developed during Trump’s first term, aims to enable secure data-sharing via APIs, fostering competition and innovation in fintech and digital assets [1]. However, the Bank Policy Institute—a trade group representing JPMorgan Chase, Wells Fargo, and Bank of America—filed a lawsuit shortly after the rule’s adoption, alleging it creates compliance burdens and security vulnerabilities. Banks have also begun implementing fees for fintech and crypto firms accessing customer data, with JPMorgan reportedly charging payments companies higher rates for data usage [1].

The coalition’s letter demands the administration file a legal brief by July 29, advocating for court rulings that affirm consumer ownership of financial data and prohibit banks from imposing fees. The outcome could shape whether Americans can seamlessly connect their accounts to crypto platforms and other digital services. Meanwhile, major banks continue to expand into crypto themselves. In May 2024, Mastercard and ten U.S. banks tested tokenized deposits, and JPMorgan recently filed for a blockchain-based stablecoin trademark, signaling a strategic push into digital assets [1].

President Trump, a vocal proponent of crypto, faces a complex balancing act. While his administration has championed the industry—such as signing the GENIUS Act in July and declaring a goal to make the U.S. the “crypto capital of the world”—it also faces pressure from traditional banks, which are significant Republican campaign donors. The Bank Policy Institute and the American Bankers Association have called for stricter oversight of crypto firms seeking banking charters, arguing that lax regulations could destabilize the financial system [2]. This tension reflects a broader clash between innovation-driven sectors and established institutions, with open banking as a battleground for control over financial infrastructure.

The debate carries long-term implications for the U.S. financial ecosystem. Open banking supports innovations like real-time payments and DeFi applications but raises concerns about fraud and data breaches if implemented without safeguards. The Office of the Comptroller of the Currency (OCC) will play a pivotal role in mediating this conflict, as its decisions could either accelerate crypto integration or reinforce traditional banking dominance [2]. For now, the coalition’s advocacy highlights the urgency of the issue, with fintech and crypto firms likely to intensify lobbying efforts as the legal battle unfolds.

Sources:

[1] Cointelegraph, Fintech, crypto groups press Trump to protect open banking amid bank pushback

https://cointelegraph.com/news/fintech-groups-trump-open-banking-banks-crypto

[2] Banking Dive, Bank trade groups push back on crypto firms' bank charter pursuit

https://www.bankingdive.com/topic/regulations-policy/