After 15 years of regulatory tug-of-war, banks and fintech companies have reached private arrangements for sharing customer data.

Private markets work well when they are allowed to function free from big government directives. The latest example is in the world of financial data sharing, where Washington tried to dictate prices, warring industry interests warned of disaster, and the free market quietly delivered a solution on its own.

Since the passage of major financial industry reform legislation in 2010, policymakers have debated how to create a regulatory framework within which personal data portability and sharing can occur safely and securely. Unsurprisingly, the Biden Administration sought to finalize rulemaking that was supposed to put an end to some 15 years of speculation on what this framework, under Section 1033 of Dodd-Frank, would look like.

For years, banks were required to provide financial technology companies with customer data for free, with few limits on how that data could be monetized. The Biden Administration embraced that policy, finalizing a rule that required banks to share data with aggregators at no cost. It was a government-mandated price control of zero dollars, delivering a “solution” to a problem that didn’t exist.

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