FDIC proposes requiring banks to keep better deposit records of fintech partners

The Federal Deposit Insurance Corporation (FDIC) proposed a new rule that would require banks to keep better deposit records on ownership of funds controlled by their financial technology (fintech) partners.

The proposed notice of new rulemaking, published Tuesday, “would strengthen recordkeeping for bank deposits received from third party, non-bank companies accepting those deposits on behalf of consumers and businesses,” the FDIC said in a press release.

The move comes after a high-profile meltdown by Synapse, a banking-as-a-service (BaaS) third party for many fintechs which, when Synapse filed for bankruptcy in May, froze out thousands of customers who held $265 million in deposits with several different apps, CNBC reported in June. At the time, $85 million in customer funds were missing, per the CNBC report.