In a significant development since our last post, Fiserv’s application for a merchant acquirer limited purpose bank (MALPB) charter has been approved by the Georgia Department of Banking and Finance. This approval marks a pivotal moment for fintech and nonbank entities seeking direct access to card networks.
This article was quoted on Finance Magnates on March 10, 2025.
Guest Contributors: Jonah Crane and Adam Shapiro of Klaros Group
This is the second of three articles focused on a key question: as bank-fintech partnerships continue to play a vital role in driving financial services, how does the industry make this system safer and better?
In this second article,[i] we focus on encouraging the industry and regulators to adopt the right lessons from Synapse Financial Technologies’ (Synapse) bankruptcy by drawing from the root causes of its failure. We offer some best practices and discuss the potential role of the Federal Deposit Insurance Corporation’s (FDIC) recently proposed recordkeeping rule (Records NPR) — including areas of potential improvement — and conclude by noting how enhanced account ledgering by banks helps address one root cause of the Synapse failure: faulty account ledgering performed only by a third party.
James Stevens, co-leader of Troutman Pepper’s Financial Services Industry Group, was quoted in the September 24, 2024 Payments Dive article, “Stripe Shows Signs of IPO, Despite CEO Comments.”
On September 17, the Federal Deposit Insurance Corporation (FDIC) announced a notice of proposed rulemaking (Proposal) aimed at enhancing recordkeeping for bank deposits received from fintech and other third-party, non-bank companies. The FDIC is accepting public comments on the Proposal for 60 days after publication in the Federal Register.
This is the first of three articles focused on a key question: as bank-fintech partnerships continue to play a vital role in driving financial services, how does the industry make this system safer and better?
Fintechs and their partner banks are on edge. Regulators are concerned. But as counselors to a wide range of banks and nonbanks, we are confident that the bank-fintech partnership model is not broken. We have seen these partnerships work well — not just for clients, but for consumers and other end-users — with rigorous, risk-based controls that satisfy both the regulators and the public.
Later today, Troutman Pepper Partner James Stevens is presenting “Legal and Regulatory Compliance Insights: Focus on BAAS” to 10 founders from the Fintech South Innovation Challenge, the lead-up accelerator to Fintech South, and mentors assigned to those founders. The presentation is being held at the Advanced Technology Development Center at Georgia Tech. James
Troutman Pepper Partners Alexandra Barrage and Matthew Bornfreund were quoted in the August 5, 2024 S&P Global article, “FDIC Proposal Would Classify More BaaS Deposits as Brokered, Not Core.”
Yesterday, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the agencies) issued a joint statement highlighting potential risks associated with banks’ arrangements with third parties to deliver bank deposit products and services. While the information is not new, it clearly memorializes the issues that have been at the forefront of recent enforcement actions involving banks operating under a Banking-as-a-Service (BaaS) model.
On July 22, 2024, the Securities and Exchange Commission (SEC) declared nine registration statements effective under the Securities Act of 1933 for spot Ether ETFs, clearing the way for the ETFs to begin trading on July 23. Spot Ether ETFs are exchange-traded funds (ETFs) that invest directly in Ether, a digital asset that supports the
Troutman Pepper partner James Stevens was a featured speaker during National Fintech Organization’s webinar, “Banking as a Service Explained: Why Some Financial Institutions Hesitate While Others Fully Engage.”