Update, courtesy of David Sirota’s The Lever www.levernews.com/…
Following the CFPB’s Implementation of the Open Banking Rule, Jamie Dimon, head of J.P. Morgan and potential Treasury secretary candidate in a new Trump administration (he has also said that he would ‘consider’ taking that role in a Harris administration as well) AND chair of the lobbying group, Bank Policy Institute’s board, says he’s “gearing up for a ‘knife fight’ with Rohit Chopra and the CFPB by suing the CFPB over the Open Banking Rule, claiming that it is “fundamentally unsafe” and that the agency had exceeded its authority in developing it.
“It sounds great, except for one thing: We protect the customer,” Dimon said. “I’m not against open banking.” In fact, he added, “No one is against open banking.”
(It sounds like Jamie Dimon is taking a page from Trump (as well as the Mafia) and wants to impose his ‘protection’ upon those who do not want it or need it from those who have been ripping them off for decades)
Further updates, as events warrant, will be made.
From Matt Stoller at www.thebignewsletter.com/…
“The poor have sometimes objected to being governed badly. The rich have always objected to being governed at all.” - said Gilbert K. Chesterton.
Today, SpaceX and Tesla CEO Elon Musk, the richest man in the world, tweeted that he will get rid of his own regulator, Federal Trade Commission Chair Lina Khan.
His pledge to remove Khan comes after he stood on stage and said he would personally oversee a $2 trillion cut to the Federal budget, which would cause, in his words, “hardship.”
Musk can’t fire Khan directly. But Donald Trump, if he wins, would fire Khan, because administrations almost never hold over officials from their opponents. But Musk is going out of his way to highlight that point.
And Musk, while the most colorful billionaire, isn’t alone in making this kind of pledge. There are billionaires on the campaign trail for both parties, and they all, to one extent or another, offer similar sentiments. All of the politically involved billionaires, the Democrats like Reid Hoffman, Barry Diller, and Mark Cuban, and the Republicans like Musk, have asked for Khan to go.
But these men, who are often under investigation, have frustrations that go beyond Khan. The real target is the idea that the law applies to the powerful. And with the power of tech platforms, it is actually possible to target ideas. I have had Tweets and Facebook posts blocked for content reasons, like alleging corporate consolidation and inflation are linked, or citing articles about strikes. I get notes from readers all the time about this experience. The ability to manipulate the distribution of content isn’t just real, it’s the business model of trillion dollar firms. That they do it largely for ad money doesn’t preclude them doing it for other reasons.
To give you a sense of what corporate revenge might look like, Dave Dayen and I did an interview with entrepreneur and national security reporter Ken Klippenstein on how he and some of his readers were subjected to censorship by all the major tech platforms, and then an FBI visit, merely for publishing widely available information about a major VP candidate. Conservatives have for years been complaining about censorship and de-banking, in some cases reasonably and in other cases not. But one thing that’s crystal clear is that the capacity to do what they fear is real. And it has been used.
(Incidentally, I highly recommend listening to this episode, it’s both fascinating, hope-inspiring, and terrifying all at once.)
https://www.organizedmoney.fm/p/episode-6-monopolies-and-censorship
“I’ve had it with this shit”
The possibility of this kind of social reorganization of the public commons reflects the failure over the last four years to root out lawlessness within big business. And so now some of these leaders are seeking to wield political power directly over a system they thought they controlled, but that momentarily in some areas slipped out of their grasp.
Take the Consumer Financial Protection Bureau, the agency started by Elizabeth Warren as a minor concession to the bank bailouts in 2008-2010. The idea behind the CFPB is that the entire financial system would be bailed out to the tune of trillions, but in return, they would have to stop the tricks and traps that extract from consumers, with rules enforced by this bureau. But powerful bankers simply never accepted the legitimacy of the CFPB, especially when run by a leader, Rohit Chopra, who seeks to fulfill its legal mandate.
A few weeks ago, I did a piece on how large banks diverted roughly $1 trillion from American consumers to themselves by keeping savings rates artificially low, even as the Federal Reserve raised interest rates and allowed banks to hike their lending rates. It’s just a pain to change bank accounts because we have a lot of financial data associated with our accounts, from bill pay to transaction lists. And so most of us didn’t change our savings accounts, even though we could have gotten higher rates elsewhere. This kind of “anchoring” or “lock-in” is a powerful tool for incumbents.
One of the prime beneficiaries of both lock-in and the Federal Reserve’s interest rate policy is the large government-backed bank J.P. Morgan, which has 12% of the deposits in America. In 2024, it made $91 billion in net interest margin, or the spread between what it pays out to depositors and what it receives in interest for loans. Not all of this profit is illegitimate, of course, but banks do make a lot of money locking customers into their accounts and keeping rates artificially low.
Congress, in the Dodd-Frank Act in 2010, mandated that banks make it easier to change bank accounts by sharing this data, at the request of consumers. And earlier this month, the CFPB finally implemented an “open banking rule” to force that. Here’s the description:
The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free. Consumers will be able to more easily switch to providers with superior rates and services. By fueling competition and consumer choice, the rule will help lower prices on loans and improve customer service across payments, credit, and banking markets.
The rule will let consumers and businesses comparison shop for credit, bank deposit rates, and payment services. It also prohibits the unauthorized use of data by banks for “unrelated business reasons,” like targeted advertising. It will open up financial product markets for new fintech firms, and foster innovation. It’s a reasonable regulation to promote competition, reduce the unfair subsidy that’s been going to bankers, and it even has support from the top Republican on the Financial Services Committee, Patrick McHenry. “As Republicans have said for years,” McHenry said, “Americans should have greater control over their sensitive financial data.”
So what’s the response from the banking industry to this extremely tepid and reasonable rule? It’s very similar to what Musk said about Khan.
JP Morgan CEO Jamie Dimon, who is another politically influential billionaire, responded with anger. “I’ve had it with this shit,” he said at a forum at the American Bankers Association. “It’s time to fight back.”
Jamie Diamond at a summit of the American Bankers Association
Dimon also singled out the regulator responsible for this rule. "Rohit is a very smart guy who has one major flaw,” he said, “which I told him personally, which is that you use your brains to justify what you already think."
At the event, Dimon’s attack on regulators was met with roaring applause.
There’s more.
“That’s bullshit!”
Earlier this month, Chopra (head of the CFPB) gave a speech saying that large asset managers, who controls tens of trillions of dollars of stock, are a “natural oligopoly” and should not be able to abuse a loophole in the law that lets them buy stakes in banks without having to go through banking regulators. This loophole exists because Blackrock and Vanguard claim they are “passive” owners who simply hold stock but do not exert control. Criticism of these asset managers is bipartisan, with conservatives arguing that these firms force corporate America to engage in social policy they dislike.
Chopra’s argument synced up nicely with that framework, though he focused on the competitive dynamics. Major asset managers, he pointed out, “conduct thousands of engagements with corporate executives behind closed doors to share substantive views on priority areas.” Sometimes he likes what they have to say, sometimes he doesn’t, but Chopra’s point is that they are anything but passive. “These asset managers and the power they wield,” he said, “has raised serious concerns from a broad spectrum of policymakers.” At one point, a large asset manager served on the board of directors of a bank, while still being considered “passive,” a policy Chopra called “quite weird.”
So what should be done? Chopra called for revising “passivity agreements” and “regulatory deference,” and suggested a size cap on these multi-trillion dollar firms. It’s something that some conservatives, such as fellow FDIC commissioner Jonathan McKernan, found compelling.
And the reaction from the industry? More cursing.
“That’s bullshit,” Mick Mulvaney, who led the consumer watchdog during the Trump administration, said when asked for comment on Chopra’s speech. “That’s actually probably grounds for a lawsuit.”
“It’s a pretty outrageous speech,” Eric Pan, the chief executive officer of the Investment Company Institute, told MM.
This anger is now routine. Years ago, Kevin Modany, the CEO of ITT Educational Services, sent around an email about Chopra, who was on the trail of for-profit college scammers. “This guy,” Modany wrote, “should be sent to Guantanamo Bay for about a decade of R&R; which should include an aggressive regimen of ‘water sports’!” Unsurprisingly, ITT later went bankrupt in a spectacular fraud in which they were found to load up students with Federal student debt with promises of a college education, but instead leave them with nothing.
In the waning days of an election, it’s become very clear that there is a moral anger among monopolists, in response to any moves made to establish the rule of law against the powerful. If they get control of the government, under either party, I think the response is going to be aggressive and punitive. They may overreach, which will present opportunities as a lot of business leaders realize the rule of law is actually not a good thing to turn over to monopolists.
As Congressman Wright Patman once put it about those who resisted the New Deal, “Some of the members of that group only believe in law and order when they can make the law and give the order.”
Some things change in history, but that one never does.
(Emphasis mine throughout)