In a recent news release, Acting Comptroller of the Currency Michael J. Hsu reiterated the Office of the Comptroller of the Currency's (OCC) support for the FDIC's Notice of Proposed Rulemaking on the brokered deposit rule. Perhaps most troubling for FinTech/bank partnerships is continued statements equating FinTech partnerships with “bank runs.”  

Let's be clear…. this is not the case.  

Having worked with some of these banks and now working with former employees of the banks that experience bank runs in 2023, the FinTech partner deposits were the deposits that did not flee. These FinTech partnerships that maintained deposits to support neobank and payment platforms with significant technology infrastructure could not move these deposits quickly. Imagine any large-payment company with significant technology infrastructure built into a bank's core suddenly “moving the deposits” in a bank run. It simply will not happen.

From first-hand experience, these are some of the “stickiest” deposits in a bank. Why these deposits are now being demonized under a narrative that links FinTech partnerships to bank runs is simply not proven by the data or the experience of these banks. The time period for comment on the new brokered deposit rules has been extended, and we continue to push banks with experience in this space to provide data and statistics to counter this narrative.  

Acting Comptroller Hsu's statement is available at https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-102.html.