On Nov. 18, 2024, the Federal Deposit Insurance Corporation (FDIC) announced a 45-day extension to the public comment period for its proposed rule making (Proposed Rule) that would establish new recordkeeping requirements and related compliance obligations for insured depository institutions that offer certain "custodial deposit accounts with transactional features."
As we detailed in a prior post, the Proposed Rule is designed to strengthen recordkeeping requirements for custodial deposit accounts with transactional features, like those often used in banking-as-a-service (BaaS) models and other bank-fintech partnerships. It is thus intended to ensure the FDIC's ability to promptly make deposit insurance determinations and, if necessary, pay deposit insurance claims as soon as possible following the failure of an FDIC-insured bank holding such custodial accounts.
With the FDIC's extension, it will accept public comments on the Proposed Rule until Jan. 16, 2025.
Banks and fintechs should review the Proposed Rule and consider submitting comments to discuss their concerns with these proposed requirements, including compliance cost concerns.
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