US Gives Banks ‘Powerful’ Guidance for Partnering With Fintechs

Banks now have a clearer roadmap from US regulators to ensure their financial technology partners comply with fair lending, privacy, and anti-money laundering laws.

The Federal Reserve, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency finalized long-awaited guidance this week on the due diligence banks are supposed to conduct before and after partnering with fintechs and other third-party vendors.

The guidance covers familiar ground laid out by regulators for banks working with vendors in more traditional areas, such as back-office functions, debt collection, and other processes. But the three main bank regulators are now ...