January 17, 2025

Wyden, Fetterman Urge FDIC to Keep Consumers’ Ability to Access their Savings Safe and Secure

More than 14 million Americans use a non-federally insured financial institution as a banking service; FDIC rule will better protect their assets

Washington, D.C. — U.S. Senators Ron Wyden, D-Ore., and John Fetterman, D-Pa., urged the Federal Deposit Insurance Corporation (FDIC) to better protect consumers’ timely access to their savings in the event of a market disruption. Specifically, Wyden and Fetterman called on the FDIC to quickly finalize its newly proposed rule requiring banks to keep a daily record showing the true owners of consumer deposits received through non-bank financial technology (fintech) companies.

There is currently no requirement for federally insured banks (IDIs), which often hold consumers’ money on behalf of fintech companies, to know what deposits belong to each individual consumer. 

“Financial technology companies have great potential to empower everyday Americans, as well as to challenge and supplement the traditional banking system to meet customer demand,” Wyden and Fetterman wrote in their letter to FDIC. “This rule will establish strong safeguards that allow for these innovative services to continue to grow while protecting everyday depositors and the financial system from unnecessary risks.” 

Many consumers who put their savings in certain fintech accounts have not been able to access their money since the collapse of Synapse Technologies (Synapse), a middleman which helped connect fintech companies to IDIs. Synapse’s fintech and IDI partners have not been able to locate and provide impacted consumers with their full balances–leaving unwitting consumers without access to their funds–because complete ledgers and recordkeeping were not adequately and frequently maintained by all parties. The FDIC’s proposed rule would have helped prevent financial distress for these consumers by enabling Synapse’s banking partners to quickly and independently restore access to their customers’ savings, even if a fintech partner’s recordkeeping is shoddy or incomplete. 

The letter text is here. 

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