A proposed rule to strengthen recordkeeping regarding deposits placed in insured depository institutions by third-party firms is out for comment until Dec. 2, according to a Federal Register notice Wednesday.
The Federal Deposit Insurance Corp. (FDIC) Board voted unanimously Sept. 17 to release the proposal for public comment. The proposal is meant to strengthen recordkeeping for custodial deposit accounts with transactional features and preserve beneficial owners’ and depositors’ entitlement to the protections afforded by federal deposit insurance, the agency said.
It pointed specifically to the bankruptcy of Synapse Financial Technologies, Inc. – a technology company that worked with several IDIs and numerous financial technology, or fintech, companies – which it notes has affected the ability of consumers to access funds placed at IDIs for a number of months.
The FDIC noted IDIs’ “significant difficulties” in obtaining, reviewing, and reconciling Synapse’s records, which has raised concerns about the accuracy and integrity of those records. Similar concern extends to “the completeness, accuracy, and integrity of custodial deposit account records for other IDIs’ arrangements with third parties.”
The proposed rule, it notes, would only apply to IDIs offering custodial accounts with transactional features “and that are not specifically exempted” as provided in the proposal.
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