The federal banking regulators are seeking comment to better understand the relationship between financial institutions and third parties that work for them.
The OCC, Federal Reserve and FDIC “seek public comment to build on their understanding of these arrangements, including with respect to roles, risks, costs, and revenue allocation,” the agencies said. “The agencies also seek additional information and stakeholder perspectives relevant to the implications of such arrangements, including for banks’ risk management, safety and soundness, and compliance with applicable laws and regulations.”
Bank-fintech relationships may enable banks to leverage newer technology to offer innovative products to meet evolving customer expectations, the agencies said. At the same time, those relationships may introduce potential risks, the agencies said, adding that the failure of banks to manage them may present consumer protection, safety and soundness and compliance concerns.
The agencies are seeking information about how fintechs support increased access to financial services and products. They also are asking stakeholders about the range of practices for managing heightened risks.
In addition to the request for comment, the agencies issued a lengthy statement outlining the risks that third-party and fintechs pose.
Comments are due 60 days after the Request for Information is published in the Federal Register.