WASHINGTON—The Consumer Financial Protection Bureau is moving to compensate consumers harmed by the collapse of Synapse Financial Technologies, a now-bankrupt banking-as-a-service (BaaS) provider, PYMNTS reported.
Late last week the CFPB filed a lawsuit against Synapse and submitted a proposed final judgment seeking a $1 civil money penalty. The nominal penalty would give the agency access to its Civil Penalty Fund, allowing it to reimburse affected consumers. The Bureau also asked the court to bar Synapse from selling customer information.
In its complaint, the CFPB alleges Synapse failed to maintain accurate records of consumer funds or reconcile them with records held by its partner banks. The Bureau said these failures left some consumers unable to access their money, PYMNTS said.
“The partnering banks determined that the total funds they were holding for consumers was less than the total amount of consumer funds reflected in records Synapse provided to them, reflecting a shortfall of between $60 and $90 million,” the CFPB said in the announcement. “Consumers did not have any access to their funds for weeks or months as the partnering banks reconciled their records with Synapse’s records and then distributed funds to consumers, and many consumers have not received the full amount of their account balance.”