Industry-Wide
In July 2024, the OCC, FDIC, and Federal Reserve jointly issued a Request for Information (RFI) on bank-fintech arrangements to gather industry input on associated risks. The RFI specifically seeks comments on issues such as accountability gaps between banks and their fintech partners, end-user confusion about the nature of their banking relationship, risks from rapid growth in BaaS portfolios, concentration risk, liquidity management challenges, and data ownership disputes. The RFI covers arrangements across deposit, payment, and lending products. While not itself an enforcement action or new rule, the RFI signals that the agencies are considering more formal regulatory action and could lead to new guidance or rulemaking targeting the BaaS model specifically.
Verified from source: The FDIC, Federal Reserve, and OCC issued a joint statement outlining potential risks in bank-third party arrangements for deposit products and published a Request for Information in the Federal Register seeking comment on bank-fintech arrangements, including risk management practices and implications.
- Signals potential forthcoming rulemaking specifically targeting bank-fintech partnership structures
- Industry participants should prepare for increased regulatory scrutiny of deposit, payment, and lending arrangements with fintechs
- Raises the possibility of new requirements around data ownership, accountability, and consumer disclosure in BaaS
- BaaS providers should consider submitting comments to shape potential future regulations
- OfficialOCC News Release
- OfficialFDIC Financial Institution Letter
- NewsKPMG Regulatory Alert