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Bill Harris, former CEO of Intuit, Calls “Baloney” on J.P. Morgan and Intuit

February 3, 2017 in Personal Capital News by

As a former CEO of Intuit, I call J.P. Morgan and Intuit to task for their lack of support for Section 1033 of the Dodd Frank legislation to protect American’s right to access their own financial data.

Members of the administration in Washington announced today they would eliminate many parts of the Dodd-Frank legislation that was put in place to protect consumers and the country from the financial malfeasance that led to the Great Recession of 2008. I implore the administration to retain section 1033.

Section 1033 protects consumers from being denied access to their own financial data:

“SECTION 1033. CONSUMER RIGHTS TO ACCESS INFORMATION
(a) In general, subject to rules prescribed by the Bureau, a covered person [a bank or broker] shall make available to a consumer, upon request, information in the control or possession of the covered person concerning the consumer financial product or service that the consumer obtained from such covered person, including information relating to any transaction, series of transactions, or to the account including costs, charges and usage data. The information shall be made available in an electronic form usable by consumers.”

I can’t imagine any bank or broker trying to prevent their customers from getting access to their own financial data. And yet, that’s what they’re trying to do. Many of the largest financial institutions in the world have been lobbying Washington and strong-arming other firms to achieve this goal for over a year.

Here’s my commentary on an article that appeared in the Wall Street Journal on January 25, 2017. The quotes below are from the article, and you can read the full article here.

The headline reads: “J.P. Morgan, Intuit Give Mint, TurboTax Customers Wider Access to Bank Data.” Baloney. J.P. Morgan (which also owns Chase Bank) is decidedly not giving wider access, they are restricting access.

“J.P. Morgan Chase & Co. and Intuit Inc. have ended a long standoff.” When J.P. Morgan shut off Intuit’s access to their customers’ data a few months ago, they did not shut off the data to Personal Capital or Yodlee, the largest data aggregator. They’re hitting the smaller players like Xero and Intuit first, then using that as momentum and leverage to hit the bigger players who would otherwise have more clout to fight back. It’s amazing how transparent they are about their motivations: “J.P. Morgan Chase and Intuit said they will pursue similar agreements with other companies….The bank then said it would like to use the partnership as a blueprint for dealings with other more widely used sites.”

“H. Tayloe Stansbury, technology chief at Mountain View, Calif.-based Intuit, said the new deal would give customers more real-time access to their data and would enable them to make better financial decisions.” Baloney. Our customers, and those of other aggregating firms, already have real-time access to their data.

BREAKING NEWS:
Wells Fargo and Intuit announced they too would attempt to limit customer access to their data. As reported by Reuters, “The move follows a similar data-sharing agreement between Intuit and J.P. Morgan Chase & Co last week.” And, of course, Wells Fargo cites the same phony-baloney justifications.

“Many banks said the old arrangement could compromise cybersecurity.” Baloney. I founded three different cybersecurity companies and served on the board of RSA Security, the largest electronic security company in the world. I can tell you with certainty that the cybersecurity of Silicon Valley financial technology companies that use new state-of-the-art technology is far superior to the large banks which use old patched-together-with-chewing-gum technology that dates back four or five decades. Moreover, the best way to insure your accounts are not compromised is to use an aggregation service like Personal Capital to continually monitor activity in all of your accounts of all types in all financial institutions.

“Many banks said the old arrangement could…overload bank websites at busy times.” Baloney. It’s 2017. Google handles over 40,000 requests for information per second. Either this is a red herring, or the banks have technology from the 1970s. Oh, right, they do have technology from the 1970s. Still, the excuse that their servers are overloaded stretches credulity.

“Data will be shared via an application-programming interface, or API, which the companies say is more efficient and secure than the previous method.” Baloney. The largest aggregators already get the data via direct connections using APIs.

(In a different article in yesterday’s Wall Street Journal, this appeared: “‘We know customers love sharing their data, and banks are working hard to make sure they can share their data regardless of whether there’s a law or not,’ said Robert Morgan, vice president for emerging technologies at the American Bankers Association, a banking industry group.” Baloney.)

J.P. Morgan customers will have to “download their bank-account data through a bank-provided token.” Baloney. A bank-provided token puts the banks in control of who gets their own data and who doesn’t. This is what they want, so they can prevent you from comparing services and finding hidden fees – which unfortunately are rampant in our industry.

“More information is taken than the third party needs to do its job.” Baloney. This is a direct indication that they want to limit the breadth of access. What I’ve heard is that they want to limit access to just balances, and eliminate access to transactions, holdings and fees. This would obviously make the data useless and prevent consumers from getting true financial planning. Pretending to do financial planning without a comprehensive view of each family’s financial situation is close to malpractice.

“’While bilateral agreements between two big companies are a good first step, there will ultimately need to be more industrywide standards for data-sharing that include smaller banks and startups,’ says Beth Rockland, a managing director at the Center for Financial Services Innovation, an industry group.” Baloney. Creating an industry standard where all 14,000 financial institutions would be forced to enter bilateral contracts with other institutions would create a legal tangle that could never be untangled in my lifetime or yours. Some banks have even demanded compensation from financial technology companies to permit their customers to get their own data.

“When we all readily click ‘I agree’ online or on our mobile devices, allowing third-party access to our bank accounts and financial information, it is fairly clear that most of us have no idea what we are agreeing to, Jamie (Dimon, CEO of J.P. Morgan) wrote.” Baloney. Wow, is that the pot calling the kettle black. Have you taken a look at the agreements that banks make their customers sign by clicking an “I Agree” button? And by the way, when they click the “I agree” button at Personal Capital, they know exactly what they’re agreeing to, because aggregation is the specific reason they’re clicking.

“J.P. Morgan’s Mr. Dimon wrote in his annual shareholder letter.” Enough baloney to make a sandwich. Why in the world would Jamie Dimon – who runs one of the biggest and most complex financial institutions in the world – even pay attention to this issue? And why would the banks focus their mighty lobbying efforts in Washington to fight against their customers’ right to their own financial data?

In his annual letter to shareholders Jamie says that to allow “outside parties (their own customers) to have access to their bank accounts and their bank account information” is a grave threat to customer privacy and the security of the banking system. This is the final proof that the banks’ real objective is to cripple the new financial technology firms – which they view as competitors who have more agility and do more innovation – and prevent their customers from comparing offers and from getting the data they need to let non-bank financial advisors truly advise.

Please join me in calling on the banks and brokers to keep your data free.

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Bill Harris

Bill Harris

Bill Harris is the CEO of Personal Capital. He was formerly CEO of PayPal and CEO of Intuit, the makers of Quicken, QuickBooks and TurboTax. Harris also founded numerous financial technology and security companies, and served on the boards of RSA Security, Macromedia, SuccessFactors, GoDaddy and EarthLink.

26 comments

  1. James Kay

    I simply cannot believe that in this day and age, banks do not understand that customers, including small retail customers, want and deserve access to machine-readable financial data.

    There are far more important things to do in life than tedious manual entry of financial data.

    It must be that major customers such as say Amazon or Apple are getting machine-readable data. They simply could not run their business on manual entry.

    Reply
  2. Faith

    This is crazy!

    Reply
  3. Chuck White

    This power grab from our President and his big business partners is quite concerning. I trust no financial institutions to represent me. I will not let Wells Fargo, Chase or any other financial institution control any part of my financial decisions. Trump and the rest of his supporters can eat his used corn, I will never support this kind of leadership.

    Reply
    • It's not political

      This is not about Trump. Repealing certain parts of Dodd-Frank is actually a good decision. The bank’s are just trying to take the momentum built by the push for repeal to get what they want from every corner of the legislation… such as the repeal of section 1033, which if more for competitive purposes than anything. It has nothing to do with Donald Trump and even suggesting that shows a lack if understanding regarding the problem.

      Reply
  4. Suzanne Pressley

    I do not want the Dodd-Frank legislation changed or eliminated. I want to keep intact the section 1033 that allows for transparency of my financial data.

    Reply
  5. Alice Coker

    How do we come against this, another instance of the government taking over our lives.

    Who do we contact?

    Reply
  6. Kevin Thomas

    Thank you so much for speaking out here! Dodd Frank brought much needed sanity to financial services and now Trump in collusion with major banks and financial firms bring dishonor to themselves for what they propose.

    Reply
  7. Prasun Shah

    Awesome article Bill. Go get em!!

    Love Personal Capital

    Reply
  8. Matthew Rattay

    Please keep my data free.

    Reply
  9. Mike

    Hi Bill. I’ve worked in the banking technology industry for years. A few points / counterpoints from my perspective:

    > It’s true that banks are concerned about the competition from FinTech’s and any and all moves to stifle competition will be used. Part of the game which of course you know.

    > Banks in general use the same cybersecurity tools as everyone else. So there’s no advantage on either side here.

    > From a legal point of view, who is the custodian of the customer’s data – the bank or the aggregator? Complete baloney on your part to criticize any effort on the bank’s part to secure, and profit from, their customer relationships – including collected data. And that data collection effort is HIGHLY regulated and costs a lot to do so. Why SHOULD the bank’s give it away?

    > Your point on Dimon’s “I Agree” comment is also baloney. Dimon is ABSOLUTELY correct in saying we have no idea what we’re agreeing to. The fact that the bank’s terms & conditions are written to comply with an over abundance of regulation and other legal concerns, in no way changes his point. Users of Personal Capital and other aggregator services dilute the custodial aspects of the customer data relationship by agreeing to use these services. In the event of a breach, the banks need to ensure they are not held accountable for the aggregator’s mistakes.

    > In my technical experience, the answer to “who owns the interface” has always been very murky. The type of interface is ALWAYS negotiated between 2 parties. Making the point about API usage, whether it’s Dimon making it or you, is a complete red herring and adds nothing to your arguments.

    Finally, I personally have used aggregators for quite some time, first Mint and now Personal Capital. I like PC. I DO want to see my banking data on PC, and I know that as a general rule, both banks and aggregators employ strong cyber security measures. I’m fascinated as I watch the market forces play tug-of-war with personal data.

    I just know that your claim to any moral high road on this is baloney. Keep fighting though…it’s great theater!

    Reply
    • Bill Harris

      Hi Mike –

      Nice to talk to someone experienced in the banking technology industry.

      While I don’t agree with every point, your make some cogent arguments.

      Thanks for replying!

      Bill Harris
      CEO of Personal Capital

      Reply
  10. ScottT

    Thank you for championing this issue for us all, Mr. Harris. This ‘data prison’ move by the banks and other financial institutions is so clearly true… I’ve personally lived through the troubles of intermittent access issues in Mint and PC and Quicken and other financial tools. I entirely share the belief that we would all lose critical visibility to our collective finances without the tools provided by the aggregators and other TechFin companies. More power to you… and to great products/services like PC. Thanks.

    Reply
  11. Terry U

    Thanks to Personal Capital’s analysis of data from our “so called” advisors at one of the big banks we learned just how much our retirement savings were being compromised by fees and commissions of which we were largely unaware. This move to limit consumer access to all data must be stopped

    Reply
  12. Josh

    I value your service and hope you continue to both provide it and inform others of these unfortunate efforts.

    Reply
  13. Jeri P

    Great article, Mr. Harris. I’m so pleased that someone with your expertise is calling out the ‘baloney’ in the financial industry’s comments.
    I really appreciate the new digital technology that has helped me know and understand the ‘high fees’ that financial companies were charging me. And I appreciate this technology educating me on my financials to make better decisions.
    I absolutely agree that removing section 1033, consumer rights to information, is a huge step backwards!!!!!
    Please continue to help us keep access to our data!
    Thank you for your efforts!

    Reply
  14. Marco Papa

    I totally agree with you.

    Reply
  15. Garett L. Varricchio

    Bill – you said it – It’s all Baloney!

    Reply
  16. Anonymous

    I agree

    Reply
  17. Mike Bernhardt

    Would you please explain Intuit’s part in this? Are they positioning themselves to be the “secure gateway” for everyone now?

    Reply
  18. Chandra Nelogal

    Kudos Mr. Harris.

    Great article. We need to have access to our own data.

    Reply
  19. Cary Mandeville

    Do not remove Dodd-Frank legislation as a customer I need to be able to see my bank information anywhere I want

    Reply
  20. omprakash

    Before that happens could i with draw all the funds and close my accounts? I am scared and I do not understand how these bank steal money from hard working middle class and their life savings. Shame on billionaires
    .

    Reply
  21. Cece

    All can I say is thank you, for taking the time to explain this to all. I really hope that people listen.

    Reply
  22. Larry C

    Mr Harris, Thanks for providing this info. I’ve been using Personal Capital for 3 years and love its simplicity, ease of use and great set of analytical set of tools.

    I was not aware of these proposed changes under Dodd Frank. Could you pls respond to the rational counterpoints from Mike who appears to have the technical expertise from the banking perspective?

    From my perspective, consumers should continue to have full and unlimited access to their financial data and that transfer of data utilizes the latest encryption technologies. However, its also reasonable to assume that financial institutions incur substantial costs to provide this service to consumers. If consumers want this ability how can they expect it to be free?

    Reply
  23. Joe Fletcher

    Keep up the fight, Bill Harris! Loving that you are standing up for consumer rights. Just wish the banks would, too.

    Reply
  24. Samuel

    If fees are being made difficult to assess and forecast, then you’ll likely have a greater challenge of avoiding them or keeping them under control. PC ‘s 401K fee Analyzer opened my eyes to areas I never knew existed. Many thanks to PC.

    Reply

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