Fintech
Fed, FDIC, OCC Ask Banks for More Disclosure on Bank-Fintech Dealings
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The three main U.S. regulatory agencies that oversee banks have reminded financial institutions of the potential risks of dealing with third parties to provide banking services.
Additionally, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are seeking additional information on a broad range of agreements between banks and fintechs, including those related to deposit, payments and lending products and services, they said in a statement released Thursday.
“While these arrangements may provide benefits, supervisory experience has identified a number of safety and robustness issues, compliance issues, and consumer concerns in the administration of these arrangements,” the agencies said.
The request follows a global cyber disruption that has affected a wide range of industries, including some interruptions to JPMorgan Chase (JPM), Bank of America (BAC), and Nomura Holdings (Nuclear magnetic resonance), according to media reports. CrowdStrike Holdings’ botched software update (Conduct Control) caused widespread crashes of Microsoft-based computer systems (MSFT) Windows less than a week ago.
Banking regulators are “considering whether additional measures could help ensure that banks effectively manage the risks associated with these various types of arrangements,” they say. She said.
The statement to banks reminded them of “existing relevant legal requirements, guidance, and related resources, and provides insights that the agencies have gained through their oversight.” It did not establish new supervisory expectations.