Fintech Innovation: FDIC Updates Rules for Digital Banking and Partnerships

January 17, 2024
1 min read

In December 2023, the Federal Deposit Insurance Corporation (FDIC) finalized amendments to its rules on official FDIC signage, bank advertisements, deposit insurance misrepresentations, and the misuse of the FDIC’s name or logos (12 C.F.R. Part 328). Through these amendments, the FDIC aimed to modernize the rules for digital banking services, address the wide array of non-deposit products offered by banks (including crypto assets), and clarify the extent of deposit insurance coverage in bank-fintech arrangements.

The key provisions for federally insured banks include the creation of new FDIC signage for digital banking services, more flexibility with bank advertising statements, rules for separating non-deposit products, modernizing official FDIC signage in physical premises, and the establishment of policies and procedures for compliance. For fintechs/nonbanks, the key provisions include restrictions on the use of FDIC terms and logos, disclosures on lack of FDIC insurance coverage, non-deposit product disclosures, pass-through deposit insurance disclosures, and the requirement to adhere to the new bank policies and procedures.

The amendments become effective on April 1, 2024, and compliance is required by January 1, 2025. The FDIC’s goal is to modernize signage and advertising requirements for the digital age and crack down on misrepresentations regarding deposit insurance coverage by nonbanks, especially in connection with crypto-assets. Nonbanks offering a bank’s deposit services should carefully consider these new requirements and make necessary revisions to their end user experience.

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