The head of JPMorgan Chase and a potential Treasury secretary candidate says he’s gearing up for a “knife fight” with the country’s top consumer watchdog agency — just after a lobbying group he chairs sued the agency to protect a scheme that prevents consumers from switching banks and particularly benefits his own bank.
The attacks come as corporate interests explicitly call for the ouster of successful consumer protection reformers within the Biden administration — and suggest that no matter who wins the election, big banks will be angling to ensure they’re free to waylay and swindle their customers.
In a presentation on Monday with the American Bankers Association, a banking industry group, JPMorgan Chase CEO Jamie Dimon blasted the Consumer Financial Protection Bureau (CFPB), the federal consumer watchdog agency, and its director, Rohit Chopra, warning of an “onslaught” of regulation against banks.
“If you’re in a knife fight, you better damn well bring a knife,” Dimon said of industry efforts to stop regulators.
Part of that “onslaught” is a new CFPB rule that will make it far easier for consumers to change banks — a step toward an “open banking” system that was envisioned by financial reforms after the 2008 financial crisis, in which predatory lending caused banks to fail and led to a global economic meltdown. (That year, JPMorgan Chase, helmed by Dimon, received a $12 billion bailout from the Federal Reserve.)
The CFPB finalized this rule last week. To come into compliance, banks will now have to allow consumers to access their personal financial data and transfer it to a new bank quickly and free of charge, which proponents say will help free consumers who say they are trapped at their longtime banks. In theory, the increased consumer mobility will force banks to improve their offerings — incentivizing fewer fees, lower interest rates, and better services.
This inertia may be costing them tens of billions of dollars — and has made some banks like JPMorgan Chase the target of lawsuits against these lending practices.
“A lot of things that make it so frustrating and difficult to switch banks would be addressed in this rule,” said Emily Peterson-Cassin, the director of corporate power at Demand Progress, a progressive nonprofit. “It sure seems like Jamie Dimon does not like that.”
Indeed, the pushback from big banks — led by Dimon — has been swift.
“We’re going to fight,” Dimon said of the open banking rule at Monday’s event. “We’re going to win this one, too.”
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The same day that the CFPB announced its open banking rule, the Bank Policy Institute, a banking industry think tank and lobbying group, sued Chopra and the CFPB, alleging that the new system of open banking was “fundamentally unsafe” and that the agency had exceeded its authority in developing it.
Dimon is the chairman of the Bank Policy Institute’s board, which also includes Bank of America, Citi, Capital One, and Goldman Sachs executives. More than 30 banks are members of the organization, helping fund the millions the group spends lobbying each year in Washington, D.C.
Dimon may soon wield additional political influence. The Trump campaign has his name as a potential Treasury secretary in a new administration, and Dimon has reportedly said he would consider the role under Harris, as well. A Treasury secretary pick would make him the chief economic and fiscal policy adviser to the White House, and it’s not the first time Dimon has been considered as a candidate.
An Incentive To Trap Consumers
Open banking was first envisioned more than a decade ago in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the slate of reforms passed in the wake of the 2008 global financial crisis, in which millions lost their homes to foreclosure.
The legislation granted consumers the right to access financial data like their transaction and deposit history from financial providers. To deter consumers from departing for a new bank that may offer lower fees or better perks, banks often try to make it difficult to access this data, regulators say. But the CFPB’s new open banking regime is designed to make it easy for consumers to transfer this data to a new bank or use it for other purposes, like applying for a loan.
“I’m very hopeful that this rule will incentivize financial companies to compete for consumers and do so by providing better interest rates and customer service,” said Mike Litt, the consumer campaign director at the U.S. Public Interest Research Group, a pro-consumer policy think tank.
Currently, the average U.S. consumer sticks with their checking account for an average of 17 years, surveys have found. This inertia benefits banks, who have a diminished incentive to provide consumers with lower fees or other benefits that might cut into their profits.
“Banks get money from having your money and investing it, charging you fees,” said Peterson-Cassin. “They have an incentive to keep as many people from switching as they can.”
Banks make billions from overdraft fees and other junk fees, which take a disproportionate toll on vulnerable consumers. They also are making more and more money from another scheme that’s called “net interest income.”
Banks generally offer consumers extremely low interest rates on checking accounts — less than 0.1 percent on average — while then charging consumers ever-higher interest rates on auto loans, mortgages, and other lending. While net interest income has always been a cornerstone of banks’ business models, in recent years, profits from this scheme have reached historic levels.
As The Lever reported last year, banks are making more and more from net interest income. The nation’s four largest banks now see a stunning $175 million per day in revenue from this income. Even amid interest rate cuts by the Fed, profits from net interest income have stayed high, a sign that consumers are still losing out on billions in interest payments while banks rake in profit. One Wall Street Journal estimate found that consumers lost $42 billion in a single quarter on their savings by sticking with banks that only paid pennies in interest.
Perhaps no bank is benefiting from the scheme as much as JPMorgan Chase — and Dimon.
Last week, the bank reported a surprise jump in its net interest income: $23.4 billion in a single quarter. The bank is projecting that it will make $92.5 billion in 2024 profits, about $1 billion more than expected.
JPMorgan, like other big banks, is currently facing lawsuits brought by customers over the “unreasonably” low interest rates it offers on brokerage accounts. In 2022, U.S. Sen. Jack Reed (D-R.I.) sent Dimon a letter inquiring about JPMorgan’s extremely low interest rates on consumer savings accounts, demanding to know “why your bank still pays the same very low interest rates on deposits even as it makes giant profits by charging borrowers higher interest rates on loans.”
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Still, on Monday, Dimon was adamant that he — and the banking industry at large — has only benevolent reasons for opposing open banking and the CFPB.
“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.”
Dimon was referring to concerns that giving consumers greater access to their financial data and allowing it to be more easily transferred to third parties poses data security risks for consumers.
The Bank Policy Institute’s lawsuit over the rule made similar claims: “Forcing banks to liberally share customers’ sensitive financial information while handcuffing banks from managing the risks of doing so is a recipe for fraud and misuse of customer data,” attorneys for the organization wrote in the complaint.
Yet Litt and other advocates dismiss this allegation. They emphasize that the CFPB has built strong guardrails into the rule, which are meant to ensure that consumer data is protected and cannot be used recklessly by third parties.
“The rule makes it clear that federal data protections apply,” Litt said.
What’s At Stake On Election Day
Whether or not the CFPB is able to bring open banking to fruition may be determined not in the courts, but at the ballot box.
Frustrated by the relatively hostile Biden administration, which brought Chopra to the helm of the CFPB, big banks are courting both the Trump and Harris campaigns, hoping that whatever administration takes power in January will be friendly to bankers.
Dimon himself has refused to make a public endorsement — but has dined with Harris and reportedly privately told confidants he supports her.
It’s not yet fully clear whether a Harris administration would keep the aggressive pro-consumer leadership that has defined the Biden administration, like Chopra or Federal Trade Commission chair Lina Khan, who has been aggressively enforcing antitrust laws, taking on Big Tech and other powerful monopolies. Harris has been under pressure from billionaire donors to fire Khan, should she come into power.
Project 2025, the right-wing blueprint for a second Trump presidency, suggests the CFPB’s efforts would face a far more existential threat should former President Donald Trump win next week. Already, the consumer watchdog agency has been facing mounting attacks from corporate interests.
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“The future of the leadership at the CFPB is at stake,” said Litt.
The Heritage Foundation, the conservative think tank that drafted Project 2025, is funded by the same Wall Street interests that stand to benefit from a second Trump administration. The Project 2025 chapter on the CFPB was authored by Robert Bowes, a Trump appointee and former Chase bank executive.
In it, Bowes calls the agency a “highly politicized, damaging, and utterly unaccountable federal agency” and suggests that the next president should immediately dissolve it. Under Project 2025’s plan, all of the agency’s rules would be reversed, and Dodd-Frank itself — the law that established the CFPB — would be repealed.
For the big banks, this development would certainly be a victory.
“I am really hopeful that these policies will be able to continue in whatever administration that we have,” said Peterson-Cassin. “It’s a sign, when people in power get upset like this, that policies are working — that the economy is changing, and it’s changing for the better.”
