"We appreciate the FDIC’s initiative, and while it may be well intentioned, the proposed rulemaking is not necessary as financial institutions, including AFC members, have already established clear deposit account ledger processes for the funds they have custody of as part of a bank-fintech partnership that allows prompt payment of deposits.

While recent enforcement actions may cast a shadow on some partnerships, bank-fintech partnerships remain a demonstrated mechanism for delivering safe and responsible digital-first products and services, especially to consumers who have been historically underserved by the financial services industry. The consumer demand, and the industry best practice that has been developed – though often overlooked – demonstrates that the partnership model fosters innovation, enhances financial inclusion, and delivers significant benefits to individual consumers, when properly and responsibly managed. Rather than creating additional regulatory burdens to combat idiosyncratic issues identified by the agency, we need a fresh set of standards informed by interdisciplinary dialogue and the lessons we have learned from past successes and challenges.

We are optimistic that existing industry-led approaches, in close collaboration with regulators, is the most effective way to restore confidence in these partnerships. By focusing on refining existing structures and implementing best practices, we can ensure the long-term viability and safety of custodial accounts without stifling innovation.

On this and every other issue, AFC remains committed to working with the FDIC to achieve balanced outcomes that protect consumers, foster innovation, and maintain financial stability.”

‍