Major Banks Accused of Blocking Fintech Growth with High Fees and Data Barriers

Large U.S. banks are reportedly using high fees, restricted data access, and app-blocking tactics to suppress competition from cryptocurrency and fintech platforms, a strategy critics have labeled “Chokepoint 3.0” [1]. The term was first introduced by Alex Rampell, partner at Andreessen Horowitz, who warned that while the previous regulatory initiative—“Operation Chokepoint 2.0”—has ended, major banks are now employing similar tactics privately. Rampell cited JPMorgan as a case in point, highlighting how banks are erecting barriers to entry for platforms like Coinbase and Robinhood [2].

The strategy reportedly includes charging fees for access to basic customer data such as routing numbers and account details, which are supposed to be available free of charge under Section 1033 of the Dodd-Frank Act [3]. Critics argue that this practice not only undermines open banking principles but also exploits the public at large. JPMorgan, for instance, has been accused of implementing a policy that imposes costs on fintechs for integrating with its data systems, a move that could disproportionately impact smaller competitors reliant on seamless banking partnerships.

Tyler Winklevoss, co-founder of Gemini, has publicly criticized JPMorgan for what he described as anti-competitive behavior. He directly called out JPMorgan CEO Jamie Dimon, accusing the bank of trying to “take away your right to access your banking data for free through third-party fintechs like @Plaid” [4]. Winklevoss warned that such policies could “bankrupt fintechs” that depend on free data integration to offer services like crypto trading.

Coinbase has also entered the fray, accusing the Federal Deposit Insurance Corporation (FDIC) of obstructing its request for documents related to “Operation Chokepoint 2.0” through a Freedom of Information Act (FOIA) request. The exchange argues that full access to these documents is essential to understanding the extent of institutional and regulatory obstacles facing the crypto industry [5].

The renewed focus on “Chokepoint 3.0” comes amid a broader debate over the balance of power between traditional financial institutions and emerging financial technologies. While some suggest that charging for data access could improve security and data control, critics view it as a deliberate strategy to slow innovation and preserve the dominance of legacy banks. The situation has drawn comparisons to the original “Operation Chokepoint,” a 2013–2017 regulatory effort that targeted industries like payday lending through bank disengagement, and which was ultimately abandoned following bipartisan backlash.

The ethical and regulatory implications of these tactics remain under scrutiny, particularly given that many of the banks involved, including JPMorgan, received significant taxpayer bailouts during the 2008 financial crisis. If these practices become standard, they could deter consumer adoption of fintech and crypto services, shifting user activity back to traditional banks and stifling the development of decentralized finance (DeFi) and other emerging technologies.

As the debate continues, industry leaders and regulators are urging the Consumer Financial Protection Bureau (CFPB) to enforce data access rights and prevent anti-competitive behavior. Whether these efforts will lead to meaningful oversight or merely delay the inevitable evolution of financial services remains to be seen.

Sources:

[1] https://www.ainvest.com/news/bitcoin-news-today-major-banks-accused-blocking-fintech-growth-high-fees-data-barriers-2508/

[2] https://coinpedia.org/

[3] https://timesofindia.indiatimes.com/technology/social/we-will-never-stop-fighting-for-billionaire-tyler-winklevoss-to-jp-morgan-ceo-jamie-dimon-for-rejecting-his-crypto-exchange/articleshow/122920133.cms

[5] https://cryptonews.com/news/coinbase-accuses-fdic-of-hiding-operation-chokepoint-2-0-files/