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Venture capitalists are being questioned for their accountability in the failure of fintech startup Synapse. The FDIC warns of consumer risks when money isn't deposited in federally-insured banks. The 'rent-a-bank' model in fintech is under scrutiny due to frozen customer deposits.
The “rent-a-bank” model, which gave rise to a generation of fintech startups but is now at the center of a mess that has frozen hundreds of millions in customer deposits, needs closer scrutiny, the top US consumer-finance regulator told Semafor. https://t.co/D5u9GPUYIi
CFPB head @chopracfpb tells @semafor’s @GinaChon that some banks default to moving fast and breaking things, which can some times lead to “catastrophic” results for consumers. #semafor #fintech https://t.co/8WTE2qbokS
"I think we've long had an issue with rent-a-bank in America. Fintech and the banking system have this sort of tense relationship where they both hate each other but both need each other," @chopracfpb tells @GinaChon. https://t.co/wx9h6LUhO0