Originally published at American Banker. 

Americans have more tools than ever before to save, borrow, invest and build their financial futures. That's a good thing, driven by investments from both banks and technology companies of all sizes that have identified market gaps and responded.

Read the full post on American Banker. 

Originally published at The Daily Economy. 

​Washington never misses a chance to promise “fairness” while tightening its grip on the financial system. For more than a decade, regulators and central bankers have stretched their authority far beyond the original intent of the law, distorting markets, punishing savers, and concentrating economic power in the hands of bureaucrats. 

The latest example is the Consumer Financial Protection Bureau’s Section 1033 rule, which marks a new front in Washington’s quiet campaign to nationalize financial data under the guise of “consumer empowerment.”

Section 1033 was intended to help consumers access their financial information. In practice, the Biden-era CFPB twisted it into a sweeping mandate that forces banks, credit unions, and fintech companies to share customer data with third parties, regardless of cost, security, or consent. Regulators call this “data portability.” But it’s really data coercion, forced transfer of private information directed by the government. 

By compelling institutions to open their systems to outside actors, the CFPB is creating massive cybersecurity risks and legal uncertainty. Once that data leaves a secure bank environment, who’s responsible if it’s hacked or sold? The agency doesn’t say, because it doesn’t have to. It operates as a mostly unaccountable branch of government funded by the Federal Reserve.

This new rule fits a pattern that stretches across administrations of both parties. 

The Federal Reserve has spent years manipulating the economy through its own version of central planning. Its balance sheet exploded from about $4 trillion before the COVID lockdowns to nearly $9 trillion at the peak, and even after years of “tightening,” it still sits around $6.6 trillion, roughly 20 percent of US GDP. That extraordinary expansion, coupled with record federal deficits, monetized Washington’s overspending and triggered the inflation surge Americans are still feeling today. 

The Fed’s interventions distorted credit markets, inflated asset prices, and fueled the illusion that easy money could substitute for productivity. The result has been slower growth, declining real wages, and a public that no longer trusts the dollar — or the institutions that manage it.

At the same time, agencies such as the Federal Deposit Insurance Corporation have extended open-ended guarantees to ever-larger deposits up to $250,000, signaling to financial institutions that risk doesn’t really matter because taxpayers will always clean up the mess. The more Washington insulates these institutions from market discipline, the more reckless behavior it encourages. That’s not consumer protection; that’s moral hazard on a national scale.

The CFPB’s Section 1033 rule compounds that problem by politicizing access to financial data. It hands Washington the ability to dictate not only how money moves but also how information about money moves. 

Once regulators can decide which companies may access data and on what terms, they effectively control the competitive landscape of American finance. This is industrial policy in digital disguise. And it’s already spilling into state politics, where legislators are introducing new caps on credit card interest rates, limits on interchange fees, and other well-intentioned but destructive interventions. Each of these measures increases costs for consumers, reduces credit access for the poor, and consolidates power among the largest incumbents who can afford the compliance burden. If this sounds like central planning, that’s because it is. 

A handful of bureaucrats now wield more influence over the financial system than the millions of Americans who depend on it. The Fed’s technocrats decide the cost of money. The CFPB dictates how data may flow. The FDIC guarantees risks that private firms should bear. And Congress keeps spending as if none of it matters, driving the national debt above $37 trillion and pushing annual interest payments past $1.1 trillion — a sum larger than the defense budget. These are not isolated mistakes. They are symptoms of a government that has grown far beyond its competence.

The path forward begins with humility and a return to first principles. The Fed should stop acting as an unelected economic czar and start shrinking its balance sheet toward historical norms, or possibly back to six percent of GDP, where it was before the Great Financial Crisis. Congress should reassert its oversight role and restore a rules-based monetary framework that ties money growth to economic fundamentals, not political convenience. The CFPB should be dismantled or at least stripped of its unilateral authority, with legitimate fraud enforcement consolidated under accountable agencies. Most importantly, Washington must end its obsession with managing markets and start trusting them again.

America’s prosperity was built on sound money, competition, and personal responsibility — not on bureaucratic control. If we want a financial system that works for everyone, we must end the centralization of both money and data. Section 1033 isn’t just another bad rule; it’s a warning sign of how far we’ve drifted from a truly free economy. The stakes are simple: either Americans control their financial future, or Washington does. It’s time to choose the former.

Originally published at The Washington Examiner.

The Consumer Financial Protection Bureau, the bureaucratic brainchild of Sen. Elizabeth Warren (D-MA), has become a textbook example of how government overreach hides behind feel-good slogans. Now, its supporters are trying to use religious freedom as cover for one of its worst ideas yet: Section 1033, the so-called “open banking” rule.

Let’s be clear: Section 1033 isn’t about consumer empowerment. It’s about expanding federal control over America’s financial system by forcing banks and credit unions to hand over access to their infrastructure to third-party financial technology firms — at no charge.

That’s not innovation. That’s theft.

Alliance Defending Freedom founder Alan Sears recently argued that the rule is necessary to help faith-based groups and nonprofit organizations denied service by major banks. He’s not wrong that religious and conservative organizations have been victims of debanking.

But here’s the real story: These weren’t just corporate decisions. They were done under pressure from the Biden administration, which spent years coercing banks to drop politically disfavored clients. Through environmental, social, and governance mandates, regulatory intimidation, and informal guidance, Washington weaponized the financial system against those with whom it disagreed. The problem wasn’t market failure; it was government pressure.

So why are we now being told the solution is to give the government even more control?

Finalized under former President Joe Biden’s CFPB and now under review by the Trump administration, Section 1033 compels banks to give fintechs access to consumer financial data — without compensation. In 2022 alone, banks spent over $200 billion on digital infrastructure and cybersecurity. These aren’t spreadsheets; they’re secure networks, fraud monitoring systems, and customer platforms built to protect users and maintain trust.

​Section 1033 treats all that like a public utility — mandating free access for any third-party app or data aggregator that a consumer approves. No negotiation. No security guarantees. Just a federal edict.

This is a price control, and like all price controls, it will backfire. When the government mandates free access, banks have fewer incentives to invest in cybersecurity or innovate. Fintechs, meanwhile, are encouraged to ride for free rather than compete or create. Over time, this means less innovation, more risk, and fewer real choices for consumers.

Some claim the rule is needed to prevent discrimination. But we already know where that discrimination originated: from Washington itself. The best way to stop financial deplatforming isn’t to build a federally mandated data-sharing pipeline. It’s to get the government out of the way.

If consumers want to leave a politically biased bank for a community bank or fintech alternative, that’s great. But those companies should have to negotiate access, just like any other industry. They should also be held to the same standards for privacy and security. Section 1033 does neither.

As David McGarry of the Taxpayers Protection Alliance rightly pointed out, Section 1033 is a ticking time bomb. It’s pitched as “pro-consumer,” but it creates a centralized system ripe for abuse by the next administration that decides your beliefs are “too risky.”

To its credit, the Trump administration has paused the rule and reopened the rulemaking process. Now it should finish the job and scrap the rule entirely. If the goal is to empower consumers and protect liberty, the answer is not more federal mandates; it’s voluntary exchange, private contracts, and a free market where consumers and innovators thrive without bureaucratic interference.

If consumers want to leave a politically biased bank for a community bank or fintech alternative, that’s great. But those companies should have to negotiate access, just like any other industry. They should also be held to the same standards for privacy and security. Section 1033 does neither.

As David McGarry of the Taxpayers Protection Alliance rightly pointed out, Section 1033 is a ticking time bomb. It’s pitched as “pro-consumer,” but it creates a centralized system ripe for abuse by the next administration that decides your beliefs are “too risky.”

To its credit, the Trump administration has paused the rule and reopened the rulemaking process. Now it should finish the job and scrap the rule entirely. If the goal is to empower consumers and protect liberty, the answer is not more federal mandates; it’s voluntary exchange, private contracts, and a free market where consumers and innovators thrive without bureaucratic interference.

​Religious liberty should never be used as a fig leaf for central planning. We don’t need more power handed to the same regulators who helped push people out of the banking system in the first place. We need less.

Section 1033 is the wrong solution to a real problem. It should be repealed, not retooled.

Originally published on Substack. 

Imagine being told to build a billion-dollar bridge before the city decides where the road is going. That’s exactly what America’s banks are facing under the CFPB’s Section 1033 “open-banking” rule.

This month, banking groups warned that the CFPB’s deadlines—beginning in April 2026—will force them to pour time and money into compliance systems for a rule already in legal limbo. (Consumer Finance Monitor has the details in the source link under the paywall.)
​
This is bureaucracy at its worst: compliance before certainty, costs before clarity.

What Section 1033 Really Is

Section 1033 of Dodd-Frank sounds harmless: consumers should be able to access their own financial data. Who could argue with that?

But under President Biden’s CFPB Director Rohit Chopra, that idea became a sweeping mandatory data-access regime. Banks must build APIs, grant broad third-party access, and maintain complex compliance systems.

Supporters—including fintech lobbyists—say it will empower consumers and spark competition. But history tells us otherwise: government mandates don’t create innovation; they create red tape, rent-seeking, and regulatory capture.

Why Banks Are Fighting Back

The lawsuit filed by the Bank Policy Institute and state associations isn’t just whining—it’s highlighting the economic flaws:

• Massive compliance costs. Community banks and credit unions will bleed resources building systems they don’t need, raising costs for families in higher fees and fewer services.
• Legal limbo. A federal court already stayed enforcement, and the CFPB itself has admitted it’s planning a rewrite (JD Supra). Why invest billions in infrastructure for a rule that might not survive?
• Arbitrary deadlines. Tiered rollout from 2026 to 2030 punishes smaller banks based on asset size, not readiness. It’s government deciding winners and losers.
• Privacy risks. Mandated data pipelines expand attack surfaces and blur liability. Who pays when a fintech mishandles consumer data? Consumers will sign endless “I agree” forms, but consent fatigue is not empowerment.

And as the Bloomberg Law coverage of the JPMorgan-Plaid deal shows, the real beneficiaries are big players jockeying over who controls and monetizes your data—not the customers they claim to serve.

Bad Economics, Plain and Simple

From a free-market economist’s lens, Section 1033 is flawed at its core:

1. Regulated innovation is fake innovation. Standards set by regulators advantage big incumbents. Smaller innovators get shut out.
2. Moral hazard is built in. When fintechs don’t bear full liability, misuse is inevitable.
3. Capital is misallocated. Banks should be lending, improving services, and investing in communities—not wasting billions on compliance armies.
4. Regulatory creep is guaranteed. Once the pipes exist, Washington will demand more: new data types, longer retention, deeper reporting. Bureaucracies never shrink.

This is exactly what I outline in my Finance Policy Guide: regulation doesn’t just fail to solve problems—it creates new ones by distorting incentives and protecting insiders.

The Trump Opportunity — Reject & Repeal

This bad rule was born under President Biden’s Chopra CFPB. Now President Trump has an opportunity:

• Step 1: Kill the Section 1033 rule. Don’t delay, don’t rewrite—reject it.
• Step 2: Confront the root cause: Dodd-Frank. That law handed unelected bureaucrats sweeping discretion over credit, compliance, and now consumer data. It has crushed community banks and entrenched Wall Street giants who can afford compliance.

Rejecting Section 1033 is just triage. Rolling back Dodd-Frank is the cure.

A Better Way to Empower Consumers

Real reform doesn’t start with coercion—it starts with markets. Here’s the alternative:

• Incentive-based portability. Reward voluntary data sharing by lowering liability risks for firms that empower customers.
• Controlled pilots. Allow opt-in frameworks with strict privacy protections, then scale what works.
• True consumer rights. Focus on transparency, revocation, and damage remedies—not “click to consent” box-checking.
• Sunset rules. Any mandate should expire unless it proves measurable consumer benefit.

That’s how you empower individuals: by trusting markets, respecting choice, and demanding accountability.

My Take

The CFPB’s Section 1033 rule is a Trojan horse: marketed as “empowerment,” but in practice it will raise costs, weaken privacy, and entrench incumbents. Families will be left with fewer choices, higher fees, and more exposure of their private data.

President Trump should take this moment to reject Section 1033 outright and begin dismantling the failed architecture of Dodd-Frank. That’s the path to a financial system rooted in freedom, innovation, and prosperity—not bureaucracy and capture.

Originally published on Substack. 

President Trump’s new Executive Order on Guaranteeing Fair Banking for All Americans takes aim at “debanking,” the practice of closing accounts for political or reputational reasons. That’s a worthy goal. No one should lose access to basic financial services because of their lawful business or beliefs.

In most cases, banks aren’t waking up one morning and deciding to cut customers for political points. They’re responding to a tangle of Washington regulators, political mandates, and legal threats. The free market isn’t the problem here—big government is. And unless we fix that, even well-intentioned orders like this risk making things worse.

Banks can be considered the middlemen of the economy. They connect people who have money with those who need it—whether it’s to start a business, buy a house, or invest for the future. This matchmaking role helps put resources where they can do the most good, which is exactly what drives growth.

In a true free-market system, banks compete for customers based on service, price, and trust. They make decisions based on profitability and the likelihood that a borrower can repay a loan. That’s the essence of voluntary exchange—what Milton Friedman celebrated as the foundation of prosperity.

But banking today is far from that ideal. It’s one of the most regulated industries in America, overseen by the Federal Reserve, FDIC, OCC, CFPB, Treasury, and state regulators.

Every one of these entities imposes rules—from how much capital banks must hold, to the types of loans they can make, to the interest rates they can charge. Add to that political mandates like ESG and DEI, and you have a system where many lending decisions are made with one eye on the customer and the other on Washington.

This environment set the stage for Operation Choke Point, a program launched under the Obama administration. Regulators used a vague term—“reputational risk”—to pressure banks into cutting off entire lawful industries, like firearms dealers and payday lenders.

The reasoning was political, not financial. And the message was clear: serve these customers and expect trouble from your regulators. Reports suggest similar pressures existed under President Biden.

President Trump’s Executive Order goes after this abuse directly. It bans the use of “reputational risk” in regulatory guidance, orders agencies to strip that language from their rules, and calls for reviews of past cases where it was used to force account closures. Those are good steps.

But the EO also gives the Treasury Department and other agencies new authority to investigate past debanking cases and impose “remediation.” In Washington, that usually means more compliance costs, more reporting requirements, and more penalties. And when banks are already drowning in regulation, new burdens push them to take the path of least resistance—closing accounts not just for illegal activity, but for anything that might draw regulatory attention later.

In a free market, banks have every reason to serve more customers. Closing an account without good reason means losing business to a competitor, and likely losing credibility and other customers. But when the government sets vague rules or threatens costly penalties, banks respond by avoiding any customer that could be seen as risky—politically or otherwise.

Without that government pressure, how much political debanking would really happen? Probably very little, if any. The bigger problem is that the regulatory state has so much control over banking that it distorts the market’s natural incentives.

History offers a striking contrast. In the early 1900s, J.P. Morgan famously organized a rescue of the financial system during the Panic of 1907—without orders from Washington—because keeping the system stable was good for business.

That’s what markets can do when they’re free to operate. Today, by contrast, interest rates are manipulated by the Federal Reserve, lending standards are shaped by thousands of pages of regulations, and credit decisions are warped by political checklists.

If the goal is to protect customers from losing accounts for political reasons, the rules should be simple: a bank should only close an account if the customer violates agreed terms or breaks the law. That’s it. No political nudges from regulators. Just clear, objective standards set by individual banks so customers can pick which ones they prefer.

Beyond that, the real fix is to shrink the government’s role in banking.

That means repealing harmful laws like Dodd-Frank that drove bank consolidation and reduced competition. It means removing ESG and DEI mandates from financial oversight. It means encouraging more competition from community banks, credit unions, and fintech companies so customers always have alternatives.

Prosperity comes from voluntary exchange, not from bureaucrats deciding who can do business with whom. When banks are free to serve customers based on merit, and customers are free to take their business elsewhere, both sides win.

The more we let the market work, the more people will prosper.

Conclusion

President Trump is right to call out politicized debanking. No American should lose access to banking because of lawful business or beliefs. But the real source of the problem is the government’s outsized power over the financial system. Giving that same government more authority to police “fairness” in banking risks making the problem worse.

If we want fair banking for all, the solution is clear: less government, more competition, and simple, objective rules that keep politics out of financial decisions. That’s how we protect both customers and banks—and that’s how we let people prosper.

Originally published at RealClear Markets. 

The Consumer Financial Protection Bureau’s (CFPB) Section 1033 “open banking” rule—driven by President Biden’s former CFPB Director Rohit Chopra—hasn’t been vacated yet. But growing criticism from across the financial landscape is a clear signal: this top-down mandate threatens to do more harm than good.

Crypto champions, fintech advocates, and some government officials have framed this rule as vital for innovation. But that’s simply not true—and it’s not grounded in sound thinking. The Chopra rule isn’t about expanding consumer control. It’s about centralizing government control over how financial data moves—setting a dangerous precedent that weakens privacy, distorts competition, and politicizes the future of banking.

Let’s be clear: consumer access to financial data is a good thing. But the market already delivers it. Banks and fintechs have developed secure, voluntary APIs that let consumers connect budgeting apps, crypto platforms, and online lenders to their accounts. These systems didn’t arise because of government pressure—they exist because of consumer demand. Biden’s CFPB stepped in not to fix a broken market, but to replace it with their preferred market.

Under Section 1033, banks would be required to share customer data on demand with third parties—under rigid, federally dictated standards. But the rule fails to impose strong, uniform security protocols or clarify who’s liable if that data is misused, stolen, or resold. It mandates data outflows but doesn’t guarantee protection or accountability once the data leaves.

This isn’t consumer protection—it’s a blueprint for confusion and risk.

Some supporters argue the rule is necessary because banks could charge fintech firms for access to consumer data—implying this would harm competition. But in a functioning market, nothing is free. Banks invest heavily in cybersecurity, data infrastructure, and fraud prevention. Charging third parties for access to that infrastructure isn’t predatory—it’s economics. If a fintech provides real value to consumers, it can compete on price and service, just like any other business.

The Chopra rule would have overridden that basic market mechanism. By forcing data sharing on non-market terms, it risks creating cross-subsidies where smaller banks and institutions bear the cost while large, VC-backed fintechs enjoy privileged access. That’s not competition—it’s central planning.

Many in the crypto space have rallied behind 1033 as if it’s the gateway to decentralized freedom. But that’s a contradiction. You can’t claim to be building alternative currencies and financial rails, then demand the government force legacy institutions to hand you access to their infrastructure for free. The crypto world should thrive on competition, not coercion. Markets—not mandates—should determine who wins, and it’s never a good idea to hand federal agencies more control over who gets access to financial data—and how. Empowering regulators to pick winners and losers makes the threat of government interference more likely and warps the market. If regulators control the pipes, it’s only a matter of time before they control who gets to drink.

Fintech absolutely has a place in a competitive economy. Consumers benefit from innovation, convenience, and better services. But innovation must be earned in the marketplace—not locked in through regulation. That’s how you get durable progress—and guardrails against abuse.

If the CFPB truly wanted to empower consumers, it would get out of the way and let the financial sector continue building secure, consent-based data sharing on its own terms. Instead, the Chopra rule reflects a familiar reflex: Washington assuming it knows best.
​
Open banking shouldn’t mean government-directed banking. It should mean consumer-driven choice in a free and competitive system. The 1033 rule hasn’t been killed yet—but it should be. For privacy, innovation, and a financial future shaped by people—not planners.

Originally published on Substack. 

President Trump’s visit to the Federal Reserve wasn’t just a photo op—it was a reckoning.

While Americans face inflated grocery bills, housing unaffordability, and rising debt payments, the Fed is spending up to $3.1 billion on renovations to its D.C. headquarters. Rooftop gardens, VIP elevators, premium marble—Versailles on the Potomac.

Fed Chair Jerome Powell brushed off criticism beside Trump at the site, hard hat in hand. But no cosmetic tour can cover up what’s really wrong with the Fed: it’s fueling booms and busts, distorting production, and losing public trust.

The Fed’s $6.7 trillion bloated balance sheet, inflated through years of easy money and deficit monetization, is not just a number. It’s a weapon of central planning that misallocates capital, rewards speculation, and punishes saving. The costs aren’t always visible in CPI inflation—but they show up in falling productivity, unaffordable housing, fragile banks, and a growing sense that the economic game is rigged.

Now, add a luxury construction project that’s at least $700 million over budget and may rise to $3.1 billion, according to President Trump. The Fed’s defense? Preservation, asbestos, and historical charm.

But insiders like Russ Vought, OMB director, point to rooftop terrace gardens, VIP dining rooms, water features, and elite finishes. At $1,923 per square foot, this is less renovation than self-congratulation.

And the claim that the Fed is “self-funded” is disingenuous. It earns interest on trillions in Treasuries and mortgage-backed securities—purchased with money it prints—and collects fees from banks that ultimately get passed to customers. That’s a taxpayer burden in disguise.

Meanwhile, the Fed has racked up more than $200 billion in operating losses—the first sustained losses in its 110-year history. And yet it keeps expanding its footprint, not just with buildings, but with regulation.

Under Powell, the Fed has veered far beyond interest rates into climate policy, capital rules under Basel III, and pressure on community banks that disproportionately hurts local economies.

This isn’t technocratic oversight—it’s ideological mission creep. And the Fed’s internal politics tell the story.

In 2024, 92% of campaign donations from Fed employees went to Democrats. Since 2016, employees have donated nearly $3 million to Democrats and just $243,000 to Republicans. This is not a neutral institution. It’s a partisan power center for democrats.

All of this distortion—on rates, regulation, and spending—feeds back into the broader problem: government is too big, too costly, and too intrusive.

We don’t need lower interest rates while inflation is still running above the Fed’s own flexible 2% average target. The problem isn’t that Powell won’t cut—it’s that Congress refuses to cut spending. Interest on the national debt topped $1.1 trillion last year, not because of tight monetary policy, but because Washington spends like there’s no tomorrow.

If the U.S. wants sustainable growth, we need to stop using the Fed to mask the real problem: fiscal irresponsibility.

So what should be done?

First, Congress must conduct a full external audit of the Federal Reserve—not a surface review, but a deep dive into its balance sheet, regulatory reach, and political activity. It’s long overdue.

Second, the Fed’s balance sheet should be shrunk to a more reasonable level—closer to the pre-Great Financial Crisis norm of 6% of GDP. That would mean reducing it from $6.7 trillion to under $2 trillion. Anything less leaves markets dependent on central bank distortions.

Third, policymakers must adopt a rules-based approach across the board. That means strict limits on federal spending growth, hard constraints on monetary expansion, and curbs on the regulatory state’s ability to unilaterally impose costs on Americans.

Ultimately, we must ask whether the Fed is still serving Americans—or just protecting its power. A serious debate about ending the Fed and exploring market-based alternatives, such as competitive currencies or private monetary systems, must be on the table. Until then, a strong, rules-based system is the best option for taming this unaccountable behemoth.

The Fed was created in 1913 as a lender of last resort. Today, it’s a financier of federal deficits, a regulator of everything from housing to climate, and apparently, a luxury real estate developer.

It’s time for that to end. Let’s strip away the marble, audit the books, and get Washington—starting with the Fed—out of the business of managing the economy.

Watch my interview for more:
​
What did the Trump-Powell meeting at the Fed tell us? I explained yesterday on NTD News.

Originally posted at Americans for Tax Reform.

​​The Consumer Financial Protection Bureau (CFPB) has taken the rare step of reversing a major regulatory initiative. In a significant concession, the Bureau now says it will ask a federal court in Kentucky to vacate its recently finalized Section 1033 rule—an “open banking” mandate that would have forced banks and financial institutions to share consumer data with third-party fintech companies.

This reversal is more than procedural. It reflects the growing recognition that the rule lacked legal authority, imposed major risks to privacy and competition, and failed to undergo proper cost–benefit analysis. In short, the CFPB conceded what critics warned from the start: the rule was unlawful and unworkable.

Finalized last year under former Director Rohit Chopra, the Section 1033 rule imposed sweeping, mandatory data-sharing requirements on financial institutions. While promoted as a way to enhance consumer choice and competition, the rule ignored serious legal, economic, and technological concerns. It would have weakened existing privacy protections, unfairly advantaged some firms over others, and created new vulnerabilities in the financial system—all in the name of regulatory “openness.”

At the center of the legal pushback is a lawsuit filed in the U.S. District Court for the Eastern District of Kentucky. The complaint alleges that the CFPB overstepped its statutory authority and failed to analyze its rule’s costs and consequences properly. In particular, the suit raises alarms about how liability would be handled for data breaches by third-party firms, especially once sensitive information leaves the control of banks.

This litigation—and the CFPB’s retreat—has placed the entire fintech and banking ecosystem in limbo. Institutions that had begun recalibrating compliance strategies, investing in new data-sharing systems, and preparing for a wave of technical implementation are now forced to pause. Many are left wondering how much sunk cost will go unrecovered and how best to navigate future regulatory risk.

This moment offers an important lesson: Durable reform must be rooted in legislative clarity, not bureaucratic ambition.

New mandates that affect consumer data, competition, and systemic risk should come from Congress, not federal agencies acting unilaterally. When regulators try to force the adoption of specific technologies or frameworks—especially in fast-moving sectors like financial tech—they risk distorting the market and stifling innovation. Consumers suffer when agencies pick winners and losers in the name of efficiency.

Another core issue is accountability. While Section 1033 centered on empowering consumers to share their data, it never answered the fundamental question of who is responsible when things go wrong. If financial data is compromised after being shared with a third party, who bears the liability? Regulators must ensure that responsibility follows the data. Anything less invites risk, confusion, and erosion of trust.

The good news is that there’s a better way forward. As we found in our recent analysis of the rule’s impact, voluntary industry standards for secure data sharing have already emerged through market pressure and consumer demand. APIs and partnerships between banks and fintech allow consumers to safely connect their accounts to apps and services they choose without a government mandate. The private sector has shown that innovation can deliver real portability, privacy, and convenience.

What’s needed now is a clear framework grounded in market incentives and the rule of law. Any new data-sharing policy must begin with explicit legislative authorization, include thorough cost–benefit analysis, and ensure that privacy and liability protections are not afterthoughts.

The CFPB’s reversal is a welcome acknowledgment that its original approach was flawed. But the underlying lesson is broader: Freedom to share financial data must come with freedom from regulatory overreach. By respecting market dynamics and protecting consumer rights, we can build a financial system that is both open and secure.

This is how we let people prosper—through competition, clarity, and trust.

Originally published at X.com.

​Imagine you're at the grocery store, using your rewards credit card to earn points for a future flight or cash back. But behind the scenes, lawmakers are pushing policies that could render that card obsolete, along with your access to credit.
Credit is not a luxury. It’s often a lifeline. Whether covering a surprise car repair, bridging the gap between paychecks, or financing groceries during tough times, credit cards play a crucial role in financial resilience for millions of Americans. Yet lawmakers in states like Texas, Louisiana, Alaska, and Florida are considering—or have considered—proposals that would gut this system from within, all under the banner of “consumer protection.”

Bills targeting interchange fees—such as Texas HB 4124 , Louisiana HB 417, Alaska HB 171, and Florida SB 564—seek to prohibit banks and credit unions from collecting interchange fees on the tax and tip portions of credit and debit card transactions. Though Florida’s bill ultimately died in the Senate calendar in 2023, its mere introduction reflects a troubling willingness among some lawmakers to undermine competitive markets with government price controls.

At the same time, federal efforts like the Credit Card Competition Act and proposals to cap credit card interest rates—most notably by Senator Bernie Sanders (I-Vt.) and Senator Elizabeth Warren (D-Mass.)—seek to limit what banks and credit unions can charge for lending. The economic term for this is price control. And history is clear: price controls don’t work. They distort markets, shrink supply, and hurt the very people they claim to help.

Interchange fees are a core component of the payment ecosystem. These small charges fund fraud prevention, support the infrastructure of global payment networks, and help make rewards programs possible. More importantly, they balance a two-sided market: merchants gain customers, and consumers gain access to credit, security, and convenience.

When states legislate the portion of a transaction that is exempt from fees, they are effectively capping the price banks can charge for providing these services. That’s not just economic micromanagement—it’s market sabotage. Smaller banks and credit unions, in particular, are unable to absorb these losses. With thinner margins and higher compliance costs, they’ll be forced to scale back rewards or tighten lending standards. For consumers, that means fewer credit options and reduced access, especially for those who need it most.

On the federal stage, proposals to cap credit card interest rates at 10% may seem like a favor to consumers, but in practice, they would eliminate credit options for millions. Risk-adjusted pricing is a method that helps lenders to serve a diverse range of borrowers. Remove the ability to price for risk, and lenders retreat to serving only the safest customers. The unbanked and underbanked—already 22% of Americans—will be pushed further to the margins.

These rate caps are a rerun of Regulation Q, which once capped interest on bank deposits. It was phased out in the 1980s for good reason: it distorted savings markets, reduced access for small savers, and discouraged capital formation. Applying similar caps to credit markets will yield similar results—less availability, less flexibility, and more people turning to costly payday loans or unregulated lenders.

Credit access enables individuals to navigate emergencies, invest in themselves, and mitigate financial volatility. It’s the freedom to act in the moment, to make choices based on needs rather than constraints. Limiting access through regulatory price caps doesn't make credit more affordable—it makes it vanish.

And that’s the heart of the issue. These bills and proposals claim to protect consumers, but in reality, they serve to protect political optics while harming working families. A parent trying to buy back-to-school supplies or pay an unexpected medical bill doesn’t benefit from these rules. They suffer when their card is declined or their account is closed.

If lawmakers want to help consumers, they should start by encouraging competition and reducing federal regulatory barriers that prevent smaller banks and fintech companies from entering and innovating. Let institutions compete on pricing, service, and value, rather than limiting them by legislative fiat.

Consumers don’t need protection from their own financial choices. They need access, transparency, and the freedom to choose the tools that best suit their needs.

Milton Friedman once said that “one of the great mistakes is to judge policies and programs by their intentions rather than their results.” The intention to “protect consumers” is noble, but the result of these policies is clear: reduced access, fewer options, and a step backward in financial inclusion.

​Legislators must reject the temptation to impose price controls on financial services. Instead, they should protect consumer choice and promote access to credit. The future of financial empowerment depends on freedom, not fiat.