Finextra Reports: FDIC to Enhance Custodial Deposit Regulations in Response to Synapse Collapse
FDIC's Response to Synapse Collapse
In the wake of the collapse of fintech firm Synapse, the FDIC has announced ambitious plans to bolster custodial deposit regulations. This initiative centers on enhancing recordkeeping requirements for bank deposits received from third-party companies on behalf of their clients.
Proposed Regulatory Changes
- Increase transparency in custodial deposit handling.
- Reinforce the auditing processes for banks working with fintech companies.
- Implement stricter compliance measures to protect consumer funds.
This response not only addresses immediate concerns following the incident but also establishes a framework for safer financial services in the future. The fintech industry, including challengers and traditional banks, will need to adapt to these upcoming regulations.
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