Fintech Takes

S8 E6: Bank Nerd Corner: What is the BSCA and What Can It Do?

Aug 14, 2024

In this episode, Jim Bergin, a seasoned partner at Arnold & Porter with nearly two decades at the Federal Reserve, dives into the intriguing world of banking regulations. He clarifies the origins and evolution of the Bank Service Company Act (BSCA) since the 1960s. The trio also tackles recent Supreme Court decisions and their potential ramifications for banks and fintechs. Kiah shares her thoughts on brokered deposits, questioning why the FDIC is still focused on classifying fintech deposits rather than adapting to modern financial behaviors.

01:05:56

Episode guests

Jim Bergin

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Episode notes

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Quick takeaways

The Bank Service Company Act was established in the 1960s to enhance technological collaboration among banks and has evolved over time.

Recent Supreme Court decisions significantly impact regulatory frameworks for financial services, especially concerning statutory limitations and federal preemption.

The debate over brokered deposits and their classification highlights the need for updated regulations that align with contemporary banking practices and risks.

Deep dives

Impact of Supreme Court Rulings on Financial Services

Recent Supreme Court decisions hold significant implications for the financial services industry, particularly regarding statutory limitations and federal preemption. The Corner Post case clarifies how long a party has to bring a claim of injury, potentially extending the statute of limitations from the time of formation. Similarly, the Cantaro case addresses federal preemption, examining whether an OCC-regulated bank must adhere to state laws under a national charter. These rulings not only reshape the regulatory landscape for banks but also influence how non-bank financial service providers operate under government oversight.

Intro

2min

Exploring the Financial Landscape: Supreme Court Impacts and Bank Regulation Insights

5min

Understanding Supreme Court Impacts on Banking and Finance

2min

Implications of Loper Bright v. Raimondo

11min

Navigating Bank Regulations and Enforcement Actions

3min

Regulating Bank Service Providers

25min

Regulatory Challenges in Broker Deposits

15min

This week on Bank Nerd Corner, special guest and partner at Arnold & Porter, Jim Bergin joins the pod. Having worked for the Federal Reserve for 18 years, Kiah and Alex pry into his legal expertise to get answers to some lingering questions.

Jim explains the history and purpose of the Bank Service Company Act, a law enacted in the 1960s in response to the burgeoning technology needs of banks. He explains what the BSCA was originally designed for, and how it has evolved over the decades.

Alex, Kiah, and Jim also discuss the recent Supreme Court decision that ended the Chevron deference, as well as a pile of other recent Supreme Court decisions that have the potential to impact banks and fintech companies.

Plus, our girl Kiah has some major thoughts when it comes to brokered deposits. We all know that deposits behave differently— so why, in this day and age, is the FDIC still acting like the most important thing it can do is reclassify fintech deposits from non-brokered to brokered?

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