US banking regulators have issued a warning regarding the potential risks linked to third-party deposit arrangements, urging for more information about the relationships between lenders and fintech companies.
In a joint statement, the Federal Reserve, FDIC, and Office of the Comptroller of the Currency have released a request for information pertaining to various bank-fintech collaborations, specifically addressing deposit, payments, 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 further actions.
Moreover, regulators have noted that some banks have partnered with third parties to provide deposit products and services like checking and savings accounts. They caution 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."
Such arrangements carry risks, including reduced control, lack of access to records, compliance issues at the third party level, and inadequate risk management concerning consumer protection.
While the statement does not introduce new expectations, it serves as a reminder to lenders regarding existing legal requirements, guidance, and relevant resources.