On January 16, the FDIC received a letter from Sens. Ron Wyden (D-OR) and John Fetterman (D-PA) urging the finalization of a proposed rule to strengthen recordkeeping for custodial accounts. As previously covered by InfoBytes, the FDIC in September 2024 released its proposed rule titled “Recordkeeping for Custodial Accounts,” which targets custodial deposit accounts comingling deposits from multiple owners. The rule would require FDIC-insured deposit institutions (IDIs) to enhance recordkeeping to ensure the protection of beneficial owners.

The letter highlighted the risks of inadequate recordkeeping by both IDIs and non-bank financial technology (fintech) companies, including how these companies can hinder significantly consumers’ access to funds during disruptions. The senators emphasized the rule would update federal regulations to respond to the new risks that result from the intricate relationships between consumers, IDIs and fintech companies.

The senators urged the FDIC to promptly incorporate stakeholder comments and stressed that the finalization of the rule would allow for continued innovation while providing the necessary safeguards for consumers.