Judie Rinearson comments on De-risking

MSBA Board Advisor, Judith Rinearson, Partner at K&L Gates commented on De-risking and recent guidance issued by the banking regulators.

This summer, “de-risking” has become a hot topic. De-risking is the term used to describe the process many banks have taken to cancel bank accounts and correspondent banking relationships with customers whom they deem to be too risky, or not worth the cost of ensuring compliance. Losing a bank account relationship can be devastating for small businesses and many emerging payments companies have found it increasingly difficult to obtain banking service due to perceptions that providing banking services for “fintech,” blockchain companies and other innovative payments companies would be “high risk”.