Fintech ‘Prenups’ – Plan for a Card Program Split

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TLDR:

• Economic downturns have led to the breakup of bank-fintech partnerships.
• Regulatory enforcement actions have also played a role in the splits.

A recent article on Law360 discusses the impact of economic downturns and regulatory enforcement actions on bank-fintech partnerships. The combined effects of inflation-related layoffs, failures of major banks, the collapse of the crypto bubble, and regulatory actions have caused many partnerships to end even before they fully began. This has led to the need for “prenups” in the form of detailed agreements between banks and fintech companies to plan for potential program breakups.

The collapse of the crypto bubble and a series of regulatory enforcement actions have resulted in splits between banks and fintech companies, highlighting the importance of planning for potential program breakups. The article emphasizes the need for detailed agreements and contingency plans to protect both parties in case of a partnership dissolution.

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