IPA Submits Comment Letter to OCC on Community Bank-Fintech Partnerships

The Innovative Payments Association (IPA) recently submitted a comment letter to the Office of the Comptroller of the Currency (OCC) in response to its Request for Information (RFI) on community banks’ engagement with core processors and other essential third-party service providers. The RFI seeks insight into how these relationships function, the challenges community banks face, and whether additional supervisory or regulatory action may be warranted.
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In its letter, IPA emphasized the critical role bank-fintech partnerships play in enabling community banks to compete in an increasingly digital and online marketplace. These arrangements allow community banks to offer modern, technology-driven financial products while maintaining safety, soundness, and strong consumer protections. IPA highlighted that many of its members operate within these partnerships, either as sponsoring financial institutions or as fintech service providers, and have seen firsthand the benefits these models deliver to banks and consumers alike.

IPA also underscored the importance of bank-fintech partnerships in expanding financial inclusion. Products such as prepaid and fintech debit accounts, earned wage access, and buy-now-pay-later solutions have helped underserved and underbanked consumers access the financial mainstream. These offerings reduce reliance on more costly alternatives and provide users with fraud protections, budgeting tools, and real-time account access comparable to traditional banking services.

Beyond consumer benefits, IPA noted that bank-fintech partnerships have been instrumental in supporting government payment programs at the federal, state, and local levels. These partnerships have enabled faster, more cost-effective electronic disbursement of government funds, particularly for recipients without traditional bank accounts, and played a significant role during the COVID-19 pandemic response.

Importantly, IPA stressed that bank-fintech arrangements already operate within a robust and well-established regulatory framework. Existing interagency guidance, banking laws, consumer protection rules, and supervisory tools provide regulators with meaningful oversight and risk management capabilities. While acknowledging that enforcement actions have occurred in cases of inadequate oversight, IPA cautioned against imposing additional or overly prescriptive regulations that could increase costs, stifle innovation, and ultimately disadvantage community banks and consumers.

IPA encouraged the OCC to carefully weigh both the benefits of these partnerships and the sufficiency of the current regulatory framework before pursuing new regulatory requirements.

Download Comment Letter for More Information