CFPB Files Complaint Against Synapse

The US Consumer Financial Protection Bureau (CFPB) has filed a complaint and proposed stipulated final judgment and order against Banking-as-a-Service (BaaS) provider Synapse Financial Technologies, alleging that the now-bankrupt fintech “violated the Consumer Financial Protection Act of 2010 by failing to maintain adequate records of the location of consumers’ funds and failing to ensure those records matched the records maintained by its partnering banks, causing consumers to lose access to their funds”.

The action, filed on 21 August 2025 in the US Bankruptcy Court for the Central District of California, comes four months after Synapse filed for Chapter 11 bankruptcy protection.

The CFPB alleges in its complaint that: “After the Bankruptcy Court appointed a Chapter 11 Trustee, it became apparent that Synapse’s records did not match the records maintained by multiple Partner Banks.”

In a notice of the compliant posted to its website, the US regulator claims that Synapse’s 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 alleges that 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”.

The regulator says: “If entered by the court, the proposed stipulated final judgment provides for appropriate injunctive relief, including a prohibition on the sale of customer information, and a $1 civil money penalty, which enables the Bureau to access the civil penalty fund for purposes of redressing harmed consumers.”