Appearing in American Banker on June 24, 2024, Claire Williams interviews NCLC senior attorney Carla Sanchez-Adams for coverage of the impact of the Synapse collapse.
The FDIC — which is adept at stabilizing customer accounts when a bank fails — can’t swoop in because no bank has failed. And the FDIC has tried to crack down on how nonbanks advertise deposit insurance in these kinds of pass-through or FBO arrangements.
Consumers don’t have — nor should they be expected to have — this technical knowledge about banks and nonbanks.
“The way that these products are marketed and the way that people understand them, in consumers’ minds they associate them with a bank account. The challenge with all of these is that the more removed you are, the more opportunities exist for failure and for the funds to be missing from somewhere.”
Carla Sanchez-Adams, senior attorney at the National Consumer Law Center
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