Why Are Conservatives Telling Businesses What They Can Charge?

There’s no such thing as a “free lunch.” Unoriginal, trite, simplistic, and most of all, obvious? Yes on all four. But sometimes the obvious requires stating.

Consider the outcry among conservatives over the decision to remove Rule 1033 from the much commented on GENIUS Act. While the Trump administration is known to very much dislike Rule 1033, former Consumer Financial Protection Bureau (CFPB) head Rohit Chopra was a big fan of it. Which should have conservatives wondering why conservatives support what Chopra did.

For background, Rule 1033 states that financial institutions (think large banks) must provide their customers secure access to their financial data, transactions, account balances, and other information. The Rule reads as a tad superfluous in consideration of the happy truth that banks would go to the expense to compile and provide this information either way, but nonetheless.

What’s important is that in possessing direct access to their own financial information, customers of financial institutions have not only had their own data right at their fingertips, they’ve been able to pass the information on to other financial services providers.

Crucial here is that they’ve been free to do so of their own accord, and with an eye on securing the help of financial service providers operating outside the banks and other financial institutions compiling the information. Where it becomes interesting and puzzling at the same time is that Rule 1033, beyond mandating that big banks provide the information to their customers, also mandated that the banks not charge a fee to outside financial service providers accessing the data. Which brings us back to the outcry mentioned up top, and the rather unoriginal mention of the old as economics truth that there’s no free lunch.

Thought of in terms of the banks and financial institutions that compile consumer data in highly secure fashion, there’s a cost associated with doing so. And with costs in mind, the compilers of the information have understandably and ethically begun charging outside financial service providers for accessing the information.

What’s happening is understandable simply because there are once again costs associated with compiling the data. Banks have a right to profit, no? As for the ethical aspects of charging for the data, banks have shareholders whom they serve, and who understandably don’t want to pay for a market good that is given away for free.

Which brings to conservatives and their emotional outbursts about the scrapping of a Rule that vandalizes simple economics. On the face of it, how very “man bites dog” that conservatives are siding with a government-produced Rule that tells for-profit businesses what services they can and cannot charge for.

Worse, imagine disallowing charges for information access that is plainly valuable to those attaining it. Translated, outside financial service providers aren’t acquiring data at the pleasure of the owners of it because they want to stare at it lovingly, rather they want to profitably access the information themselves by offering would-be customers their own suite of financial products based on information compiled. Yet the “big” banks are the enemy here?

More realistically, the banks charging a fee for their essential work is banks acting like businesses. There was a time when conservatives reveled in just that kind of profit-motivated activity.