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MoFo Reenforcement The Enforcement Blog

Federal Banking Regulators Release Guide for Community Banks Conducting Due Diligence on Fintech Companies

Posted in Regulatory Developments

On August 27, 2021, the Federal Reserve Board, the FDIC and the OCC (the “Agencies”) jointly released a guide titled “Conducting Due Diligence on Financial Technology Companies — A Guide for Community Banks” (the “Guide”), which is intended to help community banks assess risks when considering relationships with fintech companies. While the Guide is not binding in its own right, it draws upon existing regulatory requirements and supervisory guidance — and, according to the Agencies, is consistent with proposed interagency guidance — and should be viewed by community banks both as a useful source of due diligence best practices and as a preview of potential areas of focus in future regulatory examinations. Fintech companies desiring to provide services to, or to collaborate with, community banks may find the Guide to be an important roadmap to the information and assurances community banks will expect to receive from fintech companies in discussions regarding future relationships.

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