Hello (costly) APIs; Goodbye CFPB, DEI, & CDFIs
Happy Wednesday, Fintech Listeners!
Here’s a question for you.
Let’s just say, theoretically, that we were going to start doing a bunch more podcasting here at Fintech Takes. What topics would you most like to hear more about? What crevices of fintech and banking would you want to see explored in more depth? Which all-star guests should we try (and likely fail) to book?
Hit reply and send me your thoughts! You may see them reflected in future episodes!
And speaking of podcast episodes …
— Alex
3 BIG IDEAS FROM THE PODCAST
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This week’s episode of the Fintech Takes podcast welcomes back special guest Evan Weinberger, Bloomberg Law reporter and chronicler of financial services regulation drama.
Together, we unpack JPMorgan Chase’s aggressive new open banking API fees and the uproar from data aggregators, the slow-motion implosion of the CFPB (including its open banking rule and, well, its staff), and why CDFIs and disparate impact analysis are suddenly out of vogue.
Tune in for the full conversation here
And read below for my three big ideas...
#1: ICYMI: Chase Paywalled the Fintech EcosystemCopy anchor linkCopied
Chase is charging for access to its open banking APIs. And we’re not talking a nominal fee, but possibly an ecosystem-breaking one.
Here’s what’s happening.
Data aggregators (Plaid, MX, et al) were informed that fees are coming. Pricing is tiered: higher for payments use cases (i.e., any time a tokenized account number or TAN is requested), lower for all other data pulls (for use cases like budgeting and cash flow underwriting).
Chase says this is cost recovery, and there is an element of that here, to be sure.
However, this isn’t just about infrastructure costs. It’s about reclaiming control and revenue from “middlemen” aggregators who monetize Chase data (without cutting Chase in).
Or, to quote Evan quoting Caddyshack: “Hey aggregators, how about a little something for the effort?”
It’s not just Chase. PNC’s CEO publicly applauded the move. Translation: the penguins are watching and expect more to follow Chase’s plunge off the cliff once the waters feel safe.
Paying for access is one thing. Using pricing to reshape who gets to swim where? That’s something else entirely.
🎬 DIRECTOR'S COMMENTARY
Evan and his colleague Paige Smith broke the news about Chase a couple of weeks ago, and we spent a bit of time on the podcast talking about the behind-the-scenes process that went into reporting the story.
I don’t come from a traditional journalism background, so I found this fascinating.
#2: The CFPB’s Open Banking Rule (Ghosted)Copy anchor linkCopied
The CFPB under the Biden administration spent years crafting a relatively middle-of-the-road open banking rule. One that most stakeholders (banks, fintechs, data aggregators) agreed they could live with, even if none of them loved it.
Then: Trump wins, Chopra exits, and the CFPB enters its Vought era.
The new CFPB not only declines to defend the rule in court; it asks the judge to vacate the rule it wrote. (Not revise — vacate!)
What’s next?
No one knows. Some folks inside the administration are talking about drafting a new rule.
But with the CFPB downsizing from 1,500+ employees to potentially under 200, it’s hard to see how they’d pull that off. They have no money, no people, and a massive backlog of things they’re legally required to do.
Meanwhile, fintech companies, crypto companies, and merchant groups (yes, strange bedfellows) are all sounding the alarm over Chase’s API fees becoming the default.
The crypto/VC crowd is already branding it Operation Choke Point 3.0 (kill me … kill me right now.)
And at least one political appointee at the CFPB has admitted (to Evan): We didn’t anticipate fees from the banks being this high.
If you were betting on fully operational open banking in the U.S. anytime soon … reconsider your timeline?”
#3: Fair Lending & CDFIs: DEI Targets in the Rollback WaveCopy anchor linkCopied
There are two things the Trump administration has recently deprioritized, and there’s a pretty obvious through line connecting them:
1. Disparate Impact
Disparate impact is a key tool regulators have used for decades to detect lending discrimination (not by proving intent, but by analyzing outcomes).
If a bank’s lending patterns disproportionately harm a protected group unintentionally, disparate impact lets regulators flag it and work with the lender behind the scenes to fix it.
But now? It’s gone.
Per President Trump’s April executive order, the OCC has scrubbed disparate impact from its exam manual. The FDIC and the Fed are likely to follow.
Without it, regulators can’t use statistical analysis to flag systemic lending bias — only direct, intentional discrimination (which is rarer and much more challenging to prove).
Disparate impact was a useful early warning system. Most of what it caught wasn’t malicious; it was solvable.
Federal enforcement may be scaling back, but banks and lenders are still worried about private lawsuits, the unpredictable nature of state-level enforcement, and long lookback periods (you don't want to be caught in 2029 with a new administration looking back at your 2025 underwriting).
There’s real concern that shifting standards could mean new kinds of legal exposure down the line, and most institutions are taking a more cautious approach to risk — even if the signalling from the federal government is clear.
2. Community Development Financial Institutions (CDFIs)
CDFIs are specialized financial institutions that are certified by the U.S. Treasury to provide financial services and capital to underserved communities. Many rely on federal support (like grants from the CDFI Fund) to unlock private capital from banks or philanthropic sources.
These tiny but important lenders bring capital to rural and underserved areas, and they’ve enjoyed bipartisan support for decades.
That is, until now. The Trump administration is gutting funding for CDFIs. And no one can explain why (it’s directly contrary to what’s good for the President politically).
This is more than regulatory whiplash. It’s a full-scale reshuffling of priorities; one that seems to ignore what even banks and credit bureaus want.
WHAT I'M LISTENING TO
#1: If Trump’s Economic Ideas Are So Bad, Why Isn’t the U.S. Economy Doing Much Worse? (by Derek Thompson, Plain English) 🎧 Copy anchor linkCopied
Great question! And typically great and nuanced conversation from Derek Thompson. I absolutely love this podcast.
#2: Live Oak: The Small Business Bank (Business Breakdowns) 🎧Copy anchor linkCopied
I am utterly fascinated by Live Oak Bank. This provides some insights into why.
WHERE I'LL BE
September. My god in heaven. Tell my family I love them.
(If you’ll be at any of these shows, hit me up!)
✈️ Symposium on Agentic AI & Consumer Payments | 9/8 - 9/9 | Washington D.C.Copy anchor linkCopied
Put on by my friends at the Consumer Bankers Association. I look forward to learning more about a topic that fascinates me.
✈️ FinovateFall | 9/8 - 9/10 | New York CityCopy anchor linkCopied
I’ll be giving a 7-minute presentation on a trend in financial services that banks and fintech companies should be thinking about. I’ve done this specific session before, and it’s more difficult than it sounds. Looking forward to the challenge!
✈️ Cash Flow Underwriting Summit | 9/10 | New York CityCopy anchor linkCopied
I’ll be doing A LOT at this event, which is fortunate as I am OBSESSED with cash flow underwriting, as you have probably noticed!
✈️ Money Experience Summit | 9/15 - 9/17 | Salt Lake CityCopy anchor linkCopied
One of my favorites. I never miss it. My panel this year should be a lot of fun!
✈️ Salt Flats Summit | 9/17 - 9/18 | Salt Lake CityCopy anchor linkCopied
Truly one of the most unique events I’ve ever attended. Looking forward to year 2!
✈️ AI-Native Banking & Fintech Conference | 9/30 | Salt Lake CityCopy anchor linkCopied
Year 2 for this one as well. The first one was a lot of fun (plus, I’m digging all these conferences in my backyard … Silicon Slopes for the win!)
Thanks for the read! Let me know what you thought by replying back to this email.
— Alex
