The FDIC issued a proposed rule in early 2026 requiring daily reconciliation of consumer deposits held through banking-as-a-service arrangements, directly responding to the Synapse Financial Technologies collapse that left more than 100,000 Americans unable to access 265 million dollars in deposits. The proposal would apply to all FDIC-insured institutions that hold deposits on behalf of fintech partners or through middleware intermediaries.
Synapse, which filed for bankruptcy in April 2024, operated as middleware connecting fintech applications to partner banks. When the company failed, the reconciliation gaps between its records and the underlying bank ledgers made it impossible to determine which consumers owned which deposits, resulting in months-long account freezes that highlighted fundamental weaknesses in the BaaS custody chain.
Under the proposed rule, partner banks must maintain end-of-day records that identify every beneficial owner of funds held in omnibus or FBO (for benefit of) accounts. The records must reconcile to the penny with the bank’s general ledger daily, not weekly or monthly as current practice often permits. Banks that fail to maintain compliant records would face supervisory action and potential restrictions on new fintech partnerships.
The rule also proposes that banks retain the ability to provide depositors with direct access to their funds within 24 hours if a fintech partner becomes insolvent or unresponsive. This requirement effectively mandates that banks maintain independent customer identification records separate from any middleware layer, eliminating the single point of failure that Synapse represented.
