The Consumer Financial Protection Bureau (CFPB) was supposed to be a consumer watchdog.  It’s mostly been a regulatory thicket.

Before Trump officially closes it down – hopefully soon – it must reverse an October 2024 Biden rule forcing banks to share customer information with financial technology companies for free.

The idea was that you should have easy electronic access to your own account balances and such, to easily populate tax prep software, financial management systems, etc.  So far so good.  But the aggregators that collect the data built business models around monetizing billions of data requests NOT initiated by customers, potentially imperiling their privacy and security while bearing none of the cost or risk. And once the account holder gives these companies permission for what they think is a specific purpose, these companies get an open door to pull info forever.

JP Morgan Chase has sounded the alarm and notes that the largest financial technology company, Plaid, made over a billion requests to their computers in June – but only 6% came from actual customers. That’s a cost on the banks to carry out a government rule on behalf of the aggregators.

The Trump administration promised to scrap this bad rule, but suddenly they’re saying they’ll rewrite it instead:

“In light of recent events in the marketplace, the bureau has now decided to initiate a new rulemaking to reconsider the rule with a view to substantially revising it and providing a robust justification,” the agency said in a court filing, adding that it would begin an “accelerated” rulemaking process within three weeks.

Why not erase the Biden regulatory legacy by immediately repealing this rule? Banks, their customers, and financial technology companies should work this out themselves.