FDIC Proposes Stricter Recordkeeping Rules for Banks Partnering with Fintechs

New regulations follow Synapse Financial's collapse, aiming to protect consumer funds and improve banking stability.

The Federal Deposit Insurance Corporation (FDIC) has proposed new rules requiring banks to maintain detailed records of fintech customer accounts.
The regulations are a response to the bankruptcy of Synapse Financial Technologies, which led to thousands of accounts being frozen.
Banks must now identify the beneficial owners of each account and their balances, ensuring timely access to funds even if a fintech partner fails.
The FDIC's proposal allows third parties to maintain records, provided banks retain unrestricted access to data during insolvency events.
The FDIC has also finalized a policy to scrutinize bank mergers resulting in entities with over $100 billion in assets, updating guidance for the first time in 16 years.