On July 25, 2024, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (together, the “Agencies”) issued a request for information (the “RFI”) regarding arrangements between banks and financial technology (fintech) companies. The RFI reflects the Agencies’ recent focus on risks associated with “banking as a service” (“BaaS”), “embedded finance” and other arrangements through which banks make available deposit, payment or lending products that are marketed, distributed or otherwise provided by fintechs to consumer or business end users. The RFI describes arrangements that the Agencies have observed and associated risks for banks, and requests comments on 27 questions addressing numerous aspects of these arrangements.
Alongside the RFI, the Agencies published a joint statement (the “Joint Statement”) addressing a subset of bank-fintech relationships—those that facilitate the provision by fintechs of bank deposit products. The Joint Statement describes risks these arrangements may generate and sets out, with reference to existing regulations and guidance, effective practices to manage those risks.
Both the RFI and Joint Statement expressly state that they do not establish new requirements or supervisory expectations. Comments on the RFI will be due 60 days after publication in the Federal Register.