JPMorgan Chase has finalized agreements that guarantee payment from the fintech companies handling almost all data requests from third-party applications linked to customer bank accounts, according to information. The bank has entered into revised agreements with the fintech intermediaries responsible for over 95% of the data extractions on its platforms, which include Plaid, Yodlee, Morningstar, and Akoya, as stated by JPMorgan spokesperson Drew Pusateri. “We’ve reached agreements that will enhance the safety and sustainability of the open banking ecosystem, enabling customers to reliably and securely access their preferred financial products,” Pusateri stated. “The free market worked.” The milestone represents a significant development in the ongoing contention between conventional banks and the fintech sector regarding customer account access. For years, intermediaries such as Plaid incurred no costs to access banking systems when a customer sought to utilize a fintech application like Robinhood to withdraw funds or verify account balances. The situation seemed to be codified in legislation in late 2024, when the Consumer Financial Protection Bureau, under the Biden administration, finalized the “open-banking rule” mandating that banks provide customer data to other financial institutions without charge.

However, banks initiated legal action to block the CFPB rule from being implemented and appeared to have the advantage in May when the Trump administration requested a federal court to annul the rule. Shortly thereafter, JPMorgan — the largest U.S. bank by assets, deposits, and branches — allegedly informed the intermediaries that it would begin imposing fees that could total hundreds of millions of dollars for access to its customer data. In response, executives from fintech, crypto, and venture capital sectors contended that the bank was participating in “anti-competitive, rent-seeking behavior” that would negatively impact innovation and consumers’ capacity to utilize popular applications. Following extensive negotiations between JPMorgan and the intermediaries, the bank has consented to a pricing structure that is more favorable than its initial offer. Additionally, the fintech intermediaries have secured concessions related to the management of data requests, as reported by sources. Fintech firms opted for the assurance of securing data-sharing rates due to the uncertainty surrounding the current CFPB, which is revising the open-banking rule and may lean towards either banks or fintech companies, as noted by a venture capital investor who requested anonymity to discuss his portfolio companies.

The bank and the fintech firms opted not to reveal specifics regarding their agreements, such as the compensation for the intermediaries and the duration of the contracts. The transactions signify a transformation in the power structure among banks, intermediaries, and the fintech applications that are progressively posing challenges to established players. Industry observers indicate that an increasing number of banks are expected to start imposing fees on fintech firms for access to their systems. “JPMorgan tends to be a trendsetter. They’re sort of the leader of the pack, so it’s fair to expect that the rest of the major banks will follow,” stated Brian Shearer. Shearer, who was employed at the CFPB during Rohit Chopra’s tenure, expressed concern that this development could pose a barrier to entry for emerging startups, potentially leading to increased costs for consumers. Advocates of the 2024 CFPB rule asserted that it empowered consumers regarding their financial data while fostering competition and innovation. Banks such as JPMorgan indicated that it subjected them to fraud and unjustly burdened them with the escalating expenses of sustaining systems that are increasingly utilized by intermediaries and their clients.

In September, the announcement of Plaid’s agreement with JPMorgan was accompanied by a joint press release highlighting the continuity it offered to customers. However, the industry group associated with Plaid has strongly condemned the development, indicating that although JPMorgan has secured a significant victory, the continuing conflict may still unfold in legal settings and in the public eye. “Introducing prohibitive tolls is anti-competitive, anti-innovation, and flies in the face of the plain reading of the law,” stated Penny Lee, in her remarks regarding the JPMorgan milestone. “These agreements do not reflect the principles of a free market; instead, they illustrate how major banks leverage their market dominance to exploit regulatory ambiguities,” Lee stated. “We encourage the Trump Administration to adhere to the law by preserving the current ban on data access fees.”