Americans’ financial freedom is under threat as debanking discussions continue in Washington. Much of the debate centers on the sudden closure of an individual’s bank account and the responses from Congress and the Administration to protect access to financial services. However, an equally critical issue is the quiet effort by major banks to restrict Americans’ control over their own financial data and limit access to the apps and services millions rely on.
Here’s what’s happening: Today, eight in 10 Americans rely on digital financial apps to manage and move their money. Whether it’s splitting the bill at dinner, investing in stocks, or using a budgeting app or crypto wallet, these services are powered by ‘open banking’ – or your ability to securely connect your bank accounts to financial apps and services you want to use.
Open banking is core to how Americans manage their money today. But now, the largest banks are working to restrict your access to these tools, limit competition, and lock people into an outdated financial system.
In 2024, the federal government finalized a rule – initiated under the first Trump Administration and backed by bipartisan support from the start – that enshrined the right of the American people to control their own financial data. Strong financial data rights make it easier for people to switch banks and choose services that suit them, driving competition and innovation. But the largest banks have banded together to directly challenge this rule, weaken consumers’ financial freedom, and hold back a vital component of our nation’s global financial leadership.
Personal Data Rights: Key to Innovation and America’s Global Competitiveness
If we want a fair and competitive financial system, Americans must have the freedom to control and securely move their financial information to access better services. Consider this: our nation’s largest banks offer a savings rate as low as 0.05% APY (annual percentage yield), while leading fintech apps provide rates as high as 5.0%, orders of magnitude higher. Today, Americans can freely switch accounts to access these higher rates. Yet, the nation’s biggest banks want to be in control and are trying to take your options away.
Telling Americans where and how they can and can’t manage their money doesn’t just stifle innovation – it hurts small financial institutions, including community banks and credit unions, which lack the massive technology budgets of big banks but serve tens of millions of Americans who rely on digital financial tools. Allowing people who choose to use small financial institutions to connect their accounts to digital financial tools is critical to ensuring competition in the financial ecosystem.
We must not allow Americans to be cut off from the world of digital financial apps and services. Allowing people to retain agency over their financial information drives innovation, promotes healthy competition, and provides the freedom to choose the platforms and services that best fit their needs.
Countries such as the U.K., Brazil, and Australia have already implemented robust frameworks to give their citizens more control over their financial future. If Americans are denied the right to choose and control how they interact with their own financial information, we risk falling behind and putting the U.S. at a distinct disadvantage globally.
The stakes could not be higher. If big banks are allowed to block access to financial apps, the American people will be forced back into a closed system where banks control their choices. A “debanked” future could look like having to go in person to the bank for simple transactions, sending checks to friends or family, or having to settle for lower rates and fewer options. That’s not just bad for American consumers – it’s bad for competition, innovation, and America’s global standing.
The U.S. has a choice: protect consumers’ right to control their own financial futures or surrender to a system that protects entrenched interests at the expense of innovation. As the Trump Administration builds out its vision for spurring innovation in financial services, protecting these rights must be a core priority. The time to act is now.
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