Betterment faces questions from regulator after launching checking and savings account
Betterment was contacted by at least one of its regulators asking for more clarity around the launch of its bank-like deposit product, according to two people familiar with the matter.
While the content of questions from the Financial Industry Regulatory Authority, or FINRA, is unclear, Betterment had been in contact with the agency, as well as the Securities and Exchange Commission, in the month ahead of Tuesday's launch, one person said. As of Wednesday, the company had not changed any product details, or how it was labeled.
To launch bank-like services Betterment has to partner with banks that actually hold customers' deposits and have FDIC-insurance. This is afor fintech companies that offer financial services, but don't have a bank charter themselves. Customers' deposits for Betterment will be held at Citi, Barclays and Valley National. The checking-like accounts are insured up to $250,000 by the FDIC, while savings accounts are insured up to $1 million, according to Betterment.
the product, and said it was re-naming and re-launching it. A new version of the product is still in the works, according to a Robinhood spokesperson.to SEC Chairman Jay Clayton saying they were "concerned" that fintech companies may be dodging regulatory scrutiny. They asked U.S. financial watchdogs how they plan to police start-ups that are moving into banks' territory.
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