Happy Monday, Fintech Takers!

I hope you had a good weekend and that you are gearing up to take at least a little vacation this summer. We all need a break.

I’ll be out most of next week on vacation, but we’ve lined up plenty of good content for you while I’m away.

I also have a ton of good stuff coming your way this week, so strap in.

- Alex

P.S. — I saw Toy Story 5 this weekend with my family and I am very happy to be able to report to you that it’s excellent. As good as any of the previous installments in the franchise. The level of care that the folks at Disney and Pixar continue to put into these films is so heartening. Tremendous work by all involved.

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Still Life with a Book, a Glass and a Bottle by Vilhelm Lundstrøm

3 FINTECH NEWS STORIES

#1: How do you ration a consumer right?

What happened?

The CFPB has a new plan for open banking:

Consumers will be able to share their bank account and credit card data with financial technology companies for free, but fintechs will have to pay for access after a certain point, under a highly anticipated open banking proposal from the Consumer Financial Protection Bureau that could land as soon as next month.

Banks would be able to impose access fees on fintechs after a yet-to-be-determined number of customer data pulls under the agency’s rewrite of a Biden-era open banking regulation

The proposal would essentially set up a rationing system for customer data and leaves many questions unanswered, people familiar with the issue said.

They expect the CFPB to ask for public input on the number of data requests that banks can process for free and who will be responsible for setting the cap. The CFPB also hasn’t determined how the fees will be set, they said.

So what?

In case you’re new to the never-ending open banking saga, here’s how we got here:

1. Congress writes a vaguely-worded section (1033) in the Dodd-Frank Act, requiring that consumers’ personal financial transaction and account data be made available upon their request.

2. Nothing happens for years.

3. The Biden CFPB finalizes a rule implementing section 1033 of Dodd-Frank. The rule positions this access to personal financial data as a consumer right and prohibits the holders of that data (banks, primarily) from charging for access to it.

4. Big banks sue the CFPB over the rule.

5. The Trump 2.0 CFPB initially sides with the big banks and agrees that the rule should be thrown out.

6. JPMorgan Chase starts charging for consumer-permissioned data access. Fintech and crypto companies flip out.

7. The Trump 2.0 CFPB changes its position on open banking and decides to rewrite the rule rather than getting rid of it. That process is still ongoing, though, as Bloomberg Law reports, it may be wrapping up soon.

Fundamentally, the CFPB has three problems:

1. There is no middle ground on this issue because of how it’s being framed. Fintech and crypto companies want to position it as an inalienable consumer right because unrestricted data portability is a net competitive benefit for them. This is what the Biden CFPB tried to implement. Big banks want to position it as a service delivered by the free market because they control most of the data and thus would have the most power in a purely free market system. This is what JPMorgan Chase has manifested under the Trump 2.0 CFPB. Any compromise between these two positions puts the CFPB in a tough position because there is no logical explanation for the compromise. You can’t ration a consumer right.

2. Operationally, any compromise on pricing in open banking would be incredibly difficult to implement. I talked about this with Rafe Mazer on the Fintech Takes podcast recently. Volume-based rationing is a rare model, when you look across all the countries in the world that have a regulated open banking system. Only the UAE runs it live. Brazil wrote a volume-based rationing system into its rule and then abandoned it because metering proved too costly to implement and maintain. Most markets that allow data providers to charge for access price by the cost or value of the transaction instead — South Korea's cost-recovery system, the EU's premium APIs — not by raw call volume. In the U.S., we have zero operational capacity to implement a centralized metering service for open banking. The CFPB doesn’t have the resources (or desire) to do it. The Fed has enough problems managing infrastructure that banks and non-banks are fighting over. And FDX isn’t going to do it. It’s a standards body, not a billing-and-dispute-resolution clearinghouse. There’s simply no way to implement the system that the CFPB is reportedly planning to propose.

3. Whatever the CFPB proposes on open banking is going to trigger an immediate lawsuit (or, perhaps, more than one). And thanks to the way that administrative law now works in the U.S., the courts do not owe any deference to federal regulators when their rules are challenged and such challenges can happen in perpetuity.     

So, suffice it to say, I don’t think this rationing idea is going to work.

#2: Is it possible to do AML for digital cash?

What happened?

FinCEN, along with the OCC, Fed, FDIC, and NCUA, proposed rules for how permitted payment stablecoin issuers (PPSIs), as defined by the GENIUS Act, must comply with Bank Secrecy Act requirements, including, most importantly setting up and maintaining customer identification programs (CIPs). The rule draws a very interesting distinction between primary market and secondary market activities: 

The proposed rule also includes a new definition for “customer,” to include those who open new accounts directly with an issuer, limiting the CIP obligation to primary market activity and excluding secondary market transactions where a user’s only interaction with a PPSI is through a smart contract.

This particular decision drew concern from Fed Governor Michael Barr:

In a separate statement, Fed Governor Michael Barr expressed concern that the GENIUS Act regulatory framework “does not do enough” to address illicit finance risks in secondary market stablecoin transactions and said he would carefully review comments on whether the CIP rule should be extended to such activity.

Separately, but relatedly, multiple groups of law enforcement professionals raised concerns with the White House about the AML provisions in the Clarity Act, which is currently under consideration by Congress:

A coalition representing more than 70,000 US prosecutors, police chiefs, sheriffs and other law enforcement professionals has warned the Trump administration that key provisions of the proposed Digital Asset Market Clarity Act (CLARITY Act) could undermine efforts to combat money laundering, sanctions evasion and other forms of financial crime by creating regulatory gaps that sophisticated criminals could exploit.

In a 23 June letter seen by GLI News and sent to Acting Attorney General Todd Blanche and Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, four leading US law enforcement organisations urged the administration to reconsider section 604 of the legislation, arguing that it could weaken existing anti-money laundering safeguards at a time when digital assets are increasingly being used in organised crime.

Section 604 has emerged as one of the most contentious provisions in the bill … [it] is intended to clarify that certain blockchain developers and infrastructure providers who do not control customer funds should not automatically be treated as money transmitters.

So what?

There are two ways to look at stablecoins.

The first is that they’re a new, parallel payments system; something that can supplement, compete with, and maybe one day replace the ACH, correspondent banking, and the card networks.

The second is that they’re the digital equivalent of cash.

Both views have real merit. But watch the debate closely and you'll notice crypto advocates slide between the two depending on which argument they need to win in the moment. When the pitch is growth and disruption, stablecoins are the future of global money movement. When the subject turns to compliance, they're suddenly just cash.

The money-laundering fight is one of the areas where the cash comp comes out. The argument goes like this: we don't run a KYC check on every person who touches a twenty after it leaves the ATM, so why would we force that onto stablecoins — a requirement that would be exceedingly onerous, bordering on impossible?

In drafting their proposed CIP rule, the agencies basically agreed. The rule splits stablecoin activity into two zones. The primary market is anything where you deal directly with the issuer: buying coins from them at issuance, or cashing them back in at redemption. The secondary market is everything that happens after that: the coins changing hands between wallets, getting swapped on exchanges, or moving peer-to-peer, all without the issuer ever being a party to the transaction. By defining "customer" to cover only people who open an account directly with an issuer, the CIP rule KYCs everyone at the issuer's door — issuance and redemption — and waves through every holder downstream in that secondary market. That is the cash model, written into the rule. And it’s precisely what Governor Barr was pointing at when he said the framework "does not do enough." He voted for it, but went out of his way to state his concern, on the record.

The concern is that the cash analogy only works if stablecoins behave exactly like cash.

They don't.

Physical cash is a genuine pain to acquire, store, and move in bulk. If you don’t believe me, try walking a few million in USD across a border. That friction is a feature. It's a built-in rate limiter, and it's the reason criminals can't simply pull money out of the banking system and keep it out forever. Eventually they have to bring it back in, and the re-entry point is where we catch them.

Stablecoins strip the friction out. They move instantly, in effectively unlimited size, anywhere on earth. They can be swapped directly for goods and services without ever re-entering the banking perimeter. If they do need to come back in, they can go shopping for the weakest on-ramp anywhere in the world. And if the Clarity Act ends up weakening the GENIUS Act’s prohibition on yield, stablecoins will even be able to sit and earn like a savings account, programmatically, through a smart contract. Cash can't do any of that.

This is the context for what the National District Attorneys Association, the National Association of Assistant United States Attorneys, the International Association of Chiefs of Police, and the National Sheriffs’ Association are worried about.

Today, if you run a money transmitter — a Western Union, a check casher, a crypto exchange — you're a "money services business" under the Bank Secrecy Act, and that comes with a standing set of obligations: register with FinCEN, identify your customers, monitor the flow, and file reports when something looks suspicious. Crucially, those duties don't turn on whether you intended to help anyone launder money. Fail to register or fail to monitor, and you have legal exposure. That strict, no-intent standard is a deliberate design choice. It turns every transmitter into a tripwire, with a legal incentive to watch the money and flag what looks off, generating the leads that law enforcement chases.

(You can absolutely critique how well that machinery works in practice — but the principle is sound.)

Section 604 in the Clarity Act removes the tripwire for non-custodial intermediaries. It says they aren't money transmitters at all, which is the exact classification prosecutors used to go after Tornado Cash's Roman Storm. Take that away and the whole burden flips onto law enforcement: instead of a transmitter handing them a lead, they now have to develop their own and chase it all the way to a showing that someone knowingly helped move dirty money.

“Fine,” crypto advocates might reply. “That's survivable, because we're handing law enforcement something they've never had: total transparency. It's all on the blockchain. Every transaction, visible, forever. That radical visibility more than compensates for stablecoins' reach and for the Section 604 shield.”

That’s (mildly) reassuring, except that one of the hottest things in stablecoin infrastructure right now is privacy. No company wants its payroll, its supplier list, or its treasury moves broadcast to every competitor with a block explorer. So stablecoin infrastructure providers are racing to make stablecoin payments more private. Tempo, the Stripe- and Paradigm-backed payments chain, launched "Zones," private execution environments built on the principle that the parties to a transaction should see the details, the broad public should not. On the custody side, The Vault and Hinkal are using zero-knowledge tech to do the same.

To be fair, these companies aren't building pure anonymity. Tempo's Zone operators retain visibility for compliance and reporting and Hinkal supports viewing keys so approved parties can look. Additionally, Clarity’s Section 604 leaves criminal liability intact for anyone knowingly moving dirty money.

Still, what’s happening now is decidedly strange.

We’ve decided that stablecoins are just digital cash, even though they have properties that physical cash doesn’t have, and now we are moving to weaken the one property — transparency — that made the cash comparison survivable in the first place.

#3: Can fintech help people find new jobs?

What happened?

EarnIn launched a new product:

EarnIn … today announced the launch of Earn Better, a jobs platform designed to help the American workforce get back to work faster and improve their earnings over time with better-paying roles. By expanding from helping people access the pay they’ve already earned to helping them get back to earning faster after job loss, EarnIn is extending its mission to support workers through every stage of their financial journey.

Earn Better is now built directly into the EarnIn app and will launch with access to more than 5 million job openings, along with free, AI-powered tools to help people get hired faster. These include an AI resume and cover letter builder, personalized interview preparation and coaching, and a job tracker to manage applications, all without subscriptions or paywalls. Over time, the platform plans to incorporate EarnIn’s proprietary earnings data to identify opportunities that offer stronger pay and more consistent income.

So what?

I really like this!

The product itself looks genuinely useful. It's free, feature-rich, and it hits people right when they need it most: between paychecks, after a job loss.

And the point EarnIn makes in its press release about this product category is genuinely interesting: In most job marketplaces, the employer pays — slots, promoted listings, recruiter seats — so the roles that get surfaced are the ones whoever's paying wants filled, not the ones best for the searcher. It's the same flaw in the financial product lead generation space: a website like NerdWallet looks like neutral guidance, but the recommendations are funded by referral fees from the products it's recommending.

I think these examples fit into a category of products, which we might refer to as “adjacency-preferred products,” things that should exist but only stay honest when built by a company whose money comes from somewhere adjacent, leaving the product free to be valuable and unbiased.

When it comes to financial product comparison and shopping, lead generation is the wrong engine. The recommendation and the revenue are the same thing, so it always bends. What we need are companies with adjacent revenue (interchange, lending, banking) that can afford to build honest comparison tools and actually compete with the NerdWallets and Credit Karmas of the world.

Job search looks like the same opportunity, and EarnIn is making the bet that earned-wage access is the right adjacent business to build it from. Because EarnIn makes money when you are employed, its incentives point the same way yours do.

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2 READING RECOMMENDATIONS

#1: Coverd Is A Late-Stage Capitalism Fever Dream (by Jason Mikula, Fintech Business Weekly) 📚

I had the pleasure of getting to closely follow along last week as Jason learned about Coverd and then proceeded to do the type of reporting that very few people in our industry do.

A joy, as always.

Make sure to tune into this week’s Fintech Recap episode to hear us discuss the company (though, bear in mind that the conversation was recorded last week).

#2: America Needs Independent Regulators (by Todd Phillips) 📚

The U.S. Supreme Court just ruled that the President can remove members of independent federal agencies at will, except for Federal Reserve board members like Lisa Cook because … reasons!

Truly just a baffling combination of decisions that remind me more of the compromises that my wife and I make when trying to parent our toddlers than it does the deliberations of our highest judicial body.

But whatever, fun! Democracy is fun!

Todd’s piece, which was published last year, contains some good thoughts on why independent regulators are a good thing. It’s worth revisiting today.

*Bonus: Introducing the Oscilar Agent Hub 📚

Single-task agents make silos faster; they don't make the institution smarter. That is, until now. Agent Hub gathers 30+ specialized agents across fraud, AML, credit, onboarding, sanctions, analytics, and more onto one shared risk memory. Learn how Oscilar is turning isolated AI assistance into a shared risk foundation in 7 minutes here.

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1 QUESTION FROM THE FINTECH TAKES NETWORK

There are a TON of interesting questions being asked in the Fintech Takes Network. I’ll share one question, sourced from the Network, each week. However, if you’d like to join the conversation, please apply to join the Fintech Takes Network. 

What fintech/banking events are you headed to in the second half of 2026? I have a fairly well-defined list at this point, but I’d love to hear where you are planning to be!

If you have any thoughts on this question, reply to this email or DM me in the Fintech Takes Network!

Thanks for the read! Let me know what you thought by replying back to this email.

— Alex