US Regulators Request Information About Bank-Fintech Partnerships

US banking regulators have issued a warning about potential risks associated with third-party deposit arrangements and called for more information on the relationships between lenders and fintech companies, as stated in Finextra News.

In a joint statement on July 26, 2024, the Federal Reserve, FDIC, and Office of the Comptroller of the Currency requested information on various bank-fintech arrangements. These include partnerships concerning deposit, payment, and lending products and services.

The agencies are «seeking input on the nature and implications of bank-fintech arrangements and effective risk management practices,» as they consider future steps.

Additionally, the regulators highlighted that some banks have partnered with third parties to offer deposit products and services, such as checking and savings accounts. They emphasized that «a bank’s use of third parties to perform certain activities does not diminish its responsibility to comply with all applicable laws and regulations.»

The statement warned that such arrangements could pose risks, including reduced control, lack of access to records, compliance issues at the third party, and insufficient risk management for consumer protection. While not introducing new expectations, the statement serves as a reminder of existing legal requirements and guidance.