In what should come as no surprise to FinTech sponsor banks, the FDIC is reemphasizing the need to maintain control over synthetic account ledgers in the wake of the Synapse collapse. On September 17, the FDIC's rulemaking board finalized certain recordkeeping rules that will require FinTech sponsor banks to maintain the ability to determine the beneficial ownership of funds in pooled accounts every business day.

This proposal would mirror current expectations regarding FDIC pass-through insurance requirements—also requiring banks to reconcile their account ledgers at the close of every business day (and providing the FDIC to determine insurance benefits in the event of a bank failure).     

The Nelson Mullins teams has been working with all of the prudential banking regulators on various failed FinTech partnerships. Often, the partner banks are caught off guard by the fragility of their partners' infrastructure. This latest release should be seen as a reminder that banks must thoroughly diligence their FinTech partnerships, regularly test these systems, and maintain robust “living wills” to prevent customer impact in the event that the FinTech partner loses its recordkeeping, ledger, and account reconciliation systems.