🚨 BREAKING: CFPB says that by Sept'23 "both Evolve and Synapse were aware that there was a deficit of tens of millions of dollars in funds that Evolve was holding for End Users" in just-released complaint: The CFPB complaint alleging Synapse violated the Consumer Financial Protection Act by engaging in "unfair" acts or practices by failing to maintain adequate records was filed as part of the bankruptcy case today, August 21st, I believe I'm the first to report. While the complaint largely rehashes already disclosed information, it's now being alleged by a government agency. A couple interesting items worth noting: -The CFPB alleges that "[c]onsumers did not have control over how Synapse moved or tracked funds across different Partner Banks that were holding their funds and processing their debit card, ACH, and wire transactions." -and that "[c]onsumers were substantially injured because Synapse’s records did not match the records of its Partner Banks." These are important as they're necessary elements to prove Synapse acted "unfairly." The CFPB's complaint notes that not all fintech programs "migrated" to the Brokerage/cash management structure, meaning those programs' end users’ funds should have remained with Evolve. The complaint notes (as was already known) that even for end users who were moved to the cash management program, "Evolve continued to act as a Partner Bank by providing access to certain banking products and services, including by continuing to sponsor debit cards. Evolve also continued to act as the receiving bank for ACH transfers for which consumers had previously been using Evolve’s routing number, such as direct deposit. Evolve continued to maintain accounts on behalf of these End Users to provide these services. Synapse would sweep funds from those accounts to Synapse Brokerage." The complaint seeks to enjoin Synapse from further violations of the CFPA (a non-issue, as it's bankrupt), additional injunctive relief (also largely irrelevant), award relief the court finds necessary to redress injury to consumers (this theoretically could be a significant monetary amount, though the chance of recovering any money seems very low), and a civil money penalty (necessary to enable CFPB to tap victim relief fund). It's worth noting that Synapse was a third-party service provider to Evolve. While the CFPB isn't making an accusation that Evolve engaged in "unfair" acts or practices, that doesn't preclude Evolve's regulators, the St. Louis Federal Reserve and the Arkansas State Bank Department, from potentially pursuing an enforcement action against Evolve for "unfair" practices conducted by Synapse on the bank's behalf (though I wouldn't hold your breath.) Many states offer consumers a *private* right of action for a business' "unfair" conduct, potentially offering victims an avenue to file civil suits against Evolve stemming from Synapse's "unfair" conduct.