N/A — Industry-wide joint statement
On July 25, 2024, the three federal banking regulators — the OCC, Federal Reserve, and FDIC — issued a joint statement addressing risks associated with third-party arrangements involving bank deposit products and services. The statement underscores bank responsibilities for compliance with consumer protection laws (including fair lending and UDAAP), financial crimes prevention (fraud and money laundering), and maintaining safe and sound banking practices regardless of outsourcing arrangements. It provides risk management examples and follows prior interagency guidance issued in June 2023 on general third-party risk management and a May 2024 supplement for community banks. This statement is directly relevant to the BaaS ecosystem, where sponsor banks rely heavily on fintech partners to distribute deposit products, and it reinforces that regulatory accountability cannot be delegated.
Verified from source: The FDIC, Federal Reserve, and OCC issued a joint statement outlining potential risks related to arrangements between banks and third parties to deliver bank deposit products and services, along with examples of risk management practices. The statement does not establish new supervisory expectations but emphasizes that a bank's use of third parties does not diminish its responsibility to comply with all applicable laws and regulations.
- Directly targets the BaaS operating model where sponsor banks outsource deposit product distribution to fintechs
- Reinforces that sponsor banks bear full regulatory responsibility for fintech partner compliance failures
- Signals heightened supervisory focus on bank-fintech deposit arrangements, potentially leading to future enforcement actions
- Banks may need to strengthen due diligence, monitoring, and contractual controls over fintech partners