US Open Banking Under Threat As CFPB Mulls Approval Of Bank Data Fees

Following a period of strong global momentum, open banking’s future faces a serious threat in the US as banks move to charge fees for data access, while the US financial watchdog reassesses its rules to allow the shift.

On August 21 the Consumer Financial Protection Bureau announced plans to rewrite its open banking framework. The existing regulation, published last year and due to come into effect in 2026, forces banks to give firms free access to payments data with customer permission, supporting the development of new apps and services (including by new entrants), and giving customers greater choice.

However, in July JPMorgan told data aggregators it would start charging fees for payments-related data access later this year, before the rule prohibiting it comes into effect.

The scale of these prices has not been confirmed, but reports suggest it could total hundreds of millions of dollars a year.

A spokesperson for JPMorgan told Reuters that charges would “incentivise more responsible data access behaviours”, limiting the amount of data third parties would request.

PNC Financial chief executive Bill Demchak has also said his bank is considering the same move.

While this would become banned in 2026 under the current version of the rules, the CFPB’s consultation suggests the rules could be changed to allow banks to charge fees.

The day after the proposed rule changes were published, Visa announced the closure of its US open banking business, prompting onlookers to speculate that the threat of fees drove the exit.

A person familiar with the market told The Banker: “Visa is exiting the US market because their largest customer, JPMorgan, wants to start charging fees for data access.

“They don’t think they can profitably run the business if they have to pay those fees, and they are not going to fight their largest customer over those fees.”

Visa said the decision was taken to focus on “high-potential markets like Europe and Latin America”.

Payment firms have criticised the proposed imposition of fees as threatening their business and contravening customers’ data rights.

John Pitts, head of industry relations at US open banking firm Plaid, said that allowing banks to charge would have an “immediate impact on competitiveness, competitions and innovations”.

Huw Davies, chief executive at open finance company Ozone API, said: “It will be unsustainable to be charging fees.”

JPMorgan’s plan to charge for data access has also been criticised by crypto lobbyists, with the president’s son Donald Trump Jr and investor Tyler Winklevoss arguing fees would unfairly advantage the incumbents in the space.

Pitts added: “If the regulator is silent, there will be market-distorting prices put into place by people with monopoly or oligopoly power over data.”

Despite these growing headwinds, the current open banking market in the US is in a strong position. In 2024 the CFPB estimated that at least 100mn US customers have authorised a third party to access their account data, while research by Open Banking Excellence found that the American open banking market is worth $7.08bn, projected to grow to $35.79bn by 2031.

Davies said: “The US has been a pretty vibrant open banking market for a number of years”.

Despite the regulatory uncertainties, the open banking sector remains confident of its place in the US’s financial ecosystem.

Pitts said: “There is more open banking happening in the US market than in all other markets combined. It’s not a bell that can be unrung.”