The challenge in analyzing JPMorgan Chase's proposed pricing for open banking data access is that the pricing is trying to accomplish multiple goals. I think it's worth pulling those goals apart and trying to understand the motivations behind this aggressive move from JPMC. So, here it is. My most up-to-date theory, which I call The Theory of the Five Motivations. #1: We need to cover our costs. Banks don't want to eat the costs of standing up and maintaining APIs. This strikes me as entirely reasonable and something that other countries with regulated open banking have solved for (in various ways). I think the Biden-era CFPB erred in not building a defined cost-recovery fee into the final open banking rule. #2: We need to price in our liability. Use of bank data can create liability, especially for certain well-regulated use cases like payments. Banks don't want to be on the hook for that liability when the consumer uses their data to empower a third party to facilitate the use case. This also strikes me as reasonable and an area where the Biden-era CFPB fell short in the final rule. It should have included a liability framework that aligned incentives across various stakeholders. #3: We need to discourage abusive secondary data use. JPMC argues that a vast majority of the calls to its open banking APIs are not initiated by its customers and are, therefore, evidence that the aggregators and fintechs are using the data for their own commercial purposes. I think there has definitely been some of this abusive secondary data use by aggregators and fintechs, but I also think a big chunk of these batch API calls are legitimate under the use cases authorized by the customer (e.g., PFM apps sending notifications to users when a certain transaction happens or a balance falls below a specific threshold.) I think the Biden-era CFPB correctly restricted the vast majority of secondary data use in its final rule (over the objections of aggregators and fintechs). #4: We need to get a cut of the value being created. Reading the public comments from JPMC executives (including Jamie Dimon), you get the impression that they don't like giving their data away for other companies (particularly the aggregators) to monetize. This seems to bother them on an almost philosophical level and it's not hard to imagine them looking at the revenues generated in this space and thinking, "we deserve a cut of that." I completely understand this reaction, but personally I don't believe that banks should be allowed to directly monetize open banking. Being a bank (particularly a SIFI) comes with a lot of privileges and a lot of obligations. I think it's fine, as a matter of public policy, to say that one of those obligations is the requirement to provide access to customers' data (at their discretion) and to only charge a modest fee for cost recovery. This would not preclude a bank from finding other ways to monetize its first-party data (e.g., Chase Media Solutions) or to compete directly in the data aggregation business (e.g., Akoya). #5: We need to crush competition. JPMC has made it very clear that it views fintech companies as a serious competitive threat and it's understandable why the bank might view the opportunity to raise the operational costs for those competitors as too good to pass up. Indeed, as others have pointed out, the bank has fiduciary duty to seize all such opportunities. To me, this is a legitimate motivation and I think it's naive to assume that any company wouldn't do the same thing in JPMC's position. They would. However, as a matter of public policy, there's a good reason why we tend to restrict large incumbents from flexing their market power in ways that are obviously anti-competitive. Preventing market incumbents from stifling competition was clearly a goal of the Biden-era CFPB in drafting the final open banking rule, and I think it was right to make it a priority. So, what do we make of the bank's proposed pricing? Which motivations are the primary drivers? The pricing that JPMC proposed to the data aggregators is significantly higher than what you would expect if the bank's goal is just to cover its costs (#1) and price in its liability risk (#2). This suggests to me that the pricing is motivated, at least partially, by a desire to crack down on secondary data (#3), extract value from the open banking ecosystem (#4), and hurt competitors (#5). Personally, my guess is that #4 isn't a huge motivator for JPMC (they have plenty of other, more lucrative opportunities to generate revenue). The bank has publicly stated that #3 is a big motivator, and I think #5 is as well, even though the bank will obviously never say that out loud. The irony, which is important to reiterate, is that #3 was actually addressed by the CFPB's open banking rule. And #1 and #2 could have been easily addressed if the rule had been revised by the Trump Administration. Instead, the current CFPB has responded to JPMC's lawsuit by asking the court to throw out the open banking rule entirely, which narrowed the bank's options for addressing those concerns while giving it more latitude to use the one option that it had been waiting to use: charging for access to its open banking APIs. We'll see how it plays out.