“Innovative banks and fintech companies have responsibly transformed the way families bank, lend, and transact. They have leveled the playing field and created critical access to financial services for consumers and small businesses long forgotten by traditional institutions.

The newly released Third Party Risk Management Guide for Community Banks provides useful clarity around bank-fintech partnerships. It will help identify the risks, roles, and responsibilities to keep community banks competitive without compromising on consumer safety. This guide should help mitigate information asymmetries and provide clear expectations on the processes that banks should pursue as it relates to managing third party relationship risks.

While this guide provides important clarity for banks and fintech companies, it is equally important that examiners ensure they are properly assessing the risks posed by bank-fintech partnerships. As we noted in our recent letter to the FDIC, we are still facing a crisis of significant mismatch between the fintech services used to conduct our daily lives and the regulatory mechanisms designed to support these innovations. Responsible innovators in collaboration with pragmatic regulator scan help root out bad actors and ensure strong industry-wide compliance and responsible capital management.

This guide is an important step forward, but we urge federal regulators to increase engagement with state regulatory agencies and policymakers to streamline the current patchwork regulatory environment and ensure consistent examination and enforcement throughout our industry.”