On September 17, the FDIC released an NPRM aimed at strengthening record-keeping requirements for banks’ holding deposits from third-party non-bank companies (i.e., fintechs). The proposed rule seeks to mitigate risks among third-party arrangements, protect depositors and bolster public confidence in insured deposits. FDIC Chairman Martin J. Gruenberg emphasized that the rule would ensure banks are aware of the actual owners of deposits placed by third parties and can provide depositors with their funds even if a third party fails.
The FDIC’s proposed rule targets custodial deposit accounts with transactional features, where deposits from multiple beneficial owners are commingled. The proposed rule would require banks to maintain records identifying the beneficial owners, their balances and the ownership category of the deposited funds. While these records must be reconciled daily, banks will have the option to maintain these records themselves or request a third party to handle them. The proposed rule also included several exemptions such as accounts holding only trust deposits, government deposit accounts, and accounts established by brokers or dealers. The proposed rule would mandate that banks establish written policies and procedures to ensure compliance and conduct annual testing and validation of records.
