Investment Management partner Casey Jennings was quoted in The Fintech Times article titled, “FDIC’s Plan to Bolster Fintech Oversight Faces Industry Scrutiny After Synapse Crisis.”

Casey raised several practical concerns about how the new rule would interact with existing regulations. Specifically, he pointed to potential conflicts between the FDIC’s proposed rule and Part 370, which governs similar recordkeeping requirements.

“The proposal fails to address how the new recordkeeping requirements interplay with similar, existing requirements imposed under Part 370,” Jennings noted. He also questioned whether the new rule would treat beneficial owners of pooled deposits as direct customers of the bank under the Bank Secrecy Act, potentially leading to significant regulatory implications.

Jennings also suggested that the proposed rule may have been rushed to market in response to the Synapse collapse. “It’s pretty clear the proposal was rushed to market in a push to ‘do something’ about Synapse,” he remarked, adding that more time for industry feedback could help address these unresolved questions.

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Casey J. Jennings

(202) 661-7166
jennings@sewkis.com

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