Texas Knows: Markets, Not Mandates, Drive Innovation & D.C. Should Take Note

Texas has shown what happens when policy supports growth instead of constraining it, and Washington should take note.

By Josh Posey
 
Texas is experiencing booming economic and population growth. Every day, families, entrepreneurs, and businesses are choosing Texas over states like California, New York and New Jersey because the Lone Star State has built a reputation for economic opportunity, financial freedom, and a regulatory environment that encourages innovation. This success reflects a consistent approach that favors competition over control, and markets over mandates.
 
As Washington debates the future of Section 1033 of the Dodd-Frank Act, that distinction matters. Most Texans have never heard of Section 1033, but the decisions being made under it could reshape how financial data is accessed and shared across the economy. Originally, the rule was intended to give consumers greater access to their own financial information. But the way the modern financial ecosystem has evolved looks very different from what policymakers originally envisioned.
 
Consumers should be able to access financial tools that help them budget, save, and invest without hesitation. But when consumers use digital payment platforms, budgeting tools or fintech applications, their financial data is often accessed by third party intermediaries operating outside the traditional banking system, at little to no cost to the Big Fintech companies that profit from that access. Big Fintech is fighting to keep it that way in perpetuity.
 
Big Fintech likes to present itself as a scrappy underdog fighting entrenched financial incumbents. But look closer, and the architects of this group are often the same Silicon Valley elite who built Big Tech, and they are running the same playbook.
 
Just like Big Tech, Big Fintech treats you as its product, not its customer. Many of these companies make their money by scraping and selling consumer data to the highest bidder, often without clear disclosure or consent. In 2022, Plaid settled a 58-million-dollar lawsuit after harvesting nearly 100 million customers data without consent. That data does not just get sold; increasingly, it is used to train artificial intelligence models and generate insights about consumers.
 
Big Fintech companies use this to increase their profits at the detriment of the consumer. They can sell data to the highest bidder with little regard for the security of the data because many of these data middlemen are not held to the same security standards as community banks and credit unions that Texans rely on every day.
 
If regulators decide in the coming months to effectively set the price of data access at zero or below market value for Big Fintech intermediaries, that is a form of price control, and like most price controls, it carries predictable consequences. Investment declines, infrastructure improvements slow and security innovation becomes harder to justify.
 
Financial technology is expanding rapidly even as data sharing arrangements have evolved in a more market driven direction. Consumers are adopting new tools because they deliver value, without realizing that Big Fintech intermediaries can profit from accessing the financial data generated through those services. Recent polling shows that 85.6 percent of voters support the idea that any institution accessing consumer financial data should help fund necessary security protections.
 
Long term affordability and access do not come from regulators dictating what Big Fintech intermediaries should pay for access to consumer data, but from encouraging competition and allowing the market to determine the value of access over time. As the Consumer Financial Protection Bureau finalizes its Section 1033 rules, regulators should reject price controls that subsidize data brokers at the expense of security.
 
A well-functioning financial system depends on clear rules, not artificially set prices. It depends on allowing markets to determine value while ensuring strong protections against misuse of consumer data. This requires holding Big Fintech companies to the same security and accountability standards as traditional banks.
 
Texas has shown what happens when policy supports growth instead of constraining it, and Washington should take note.
 
Josh Posey is Waller County writer and civic advocate focused on economic liberty, data privacy, and government accountability.