In July, the FDIC Board approved a controversial proposal that threatens to dramatically increase insurance premiums for fintech deposit accounts. This move could significantly impact banks, credit unions, fintechs, and underserved customers who rely on innovative financial services.
While the FDIC now characterizes these deposits as "hot money," this stance directly contradicts the agency's own rulemaking released in 2020. The IPA lead the effort to demonstrate why fintech deposits should be considered core deposits. The FDIC eventually acknowledged the IPA's perspective, even crafting a nuanced exception in the brokered deposits rules.
This summers regulatory reversal by the FDIC appears to be a bureaucratic response to recent banking sector challenges. In an apparent effort to be seen as taking decisive action, regulators are now undermining the progress and understanding developed just four years ago.
Monday, November 25, 2024, bank, fintech, and legal professionals are invited to an essential "Financial Services Town Hall: Brokered Deposits" discussion at the midtown New York City office of Davis Wright Tremaine LLP. This event offers a crucial opportunity to share your perspective and learn how these proposed changes could reshape your institution and dramatically affect your deposit or prepaid products or payment services
Speakers
- Andrew Lorentz, Partner, Davis Wright Tremaine
- Stephen T. Gannon, Partner, Davis Wright Tremaine
- Kayce Seifert, Associate General Counsel, Mercury Technologies, Inc.