New FDIC Rule Requires Banks to Retain Fintech Customer Data Following Synapse Controversy
The Federal Deposit Insurance Corporation recently proposed a new rule requiring banks to maintain detailed records for customers of fintech apps following the collapse of Synapse, which left thousands of Americans unable to access their accounts. The rule would apply to accounts opened by fintech firms in partnership with banks, ensuring that institutions keep records of account ownership and daily balances. This move aims to address the risks associated with funds being pooled into large accounts by fintech apps, where incomplete records could hinder payouts in case of failure. The FDIC’s proposal also includes a policy on bank mergers, with a focus on scrutiny for deals creating banks with assets exceeding $100 billion. The Biden administration’s approach to bank mergers has drawn criticism, with industry analysts suggesting that consolidation could lead to more competitive alternatives to megabanks like JPMorgan Chase.
SOURCE
Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.