As policymakers seeks to adapt alongside the warp speed of fintech, the OCC has released a new statement that addresses marketplace lending arrangements and banks' responsibilities around collaboration and partnerships with startup fintech providers.
8. Can a bank engage with a start-up Fintech company with limited financial information? OCC Bulletin 2013-29 states that banks should consider the financial condition of their third parties during the due diligence stage of the life cycle before the banks have selected or entered into contracts or relationships with third parties. In assessing the financial condition of a start-up or less established Fintech company, the bank may consider a company’s access to funds, its funding sources, earnings, net cash flow, expected growth, projected borrowing capacity, and other factors that may affect the third party’s overall financial stability. Assessing changes to the financial condition of third parties is an expectation of the ongoing monitoring stage of the life cycle.