Senators urge owners, partners, and VC backers of fintech Synapse to restore customers’ access to their money

A group of senators has banded together to urge Synapse’s owners and bank and fintech partners to “immediately restore customers’ access to their money.” As part of their demands, the senators implicated both the partners and investors of the company as being responsible for missing customer funds.

In a letter shared publicly on Monday, U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, along with Senators Ron Wyden (D-OR), Tammy Baldwin (D-WI), and John Fetterman (D-PA) pointed out that customers of companies that partnered with banking-as-a-service startup Synapse have not been able to access their money since mid-May. 

The letter was addressed to  W. Scott Stafford, president and CEO of Evolve Bank & Trust, but was also sent to major investors in Synapse, as well as to the company’s principal bank and fintech partners. Recipients include former Synapse CEO Sankaet Pathak; venture firms Andreessen Horowitz, Core Innovation Capital, and Trinity Ventures; American Bank; AMG National Trust; Trust and Lineage Bank; and fintech companies Copper, Juno, Mercury, Yieldstreet and Yotta.

San Francisco-based Synapse operated a service that allowed others (mainly fintechs) to embed banking services into their offerings. For instance, a software provider that specialized in payroll for 1099 contractor-heavy businesses used Synapse to provide an instant payment feature; others used it to offer specialized credit/debit cards. Until last year, it was providing those types of services as an intermediary between banking partner Evolve Bank & Trust and business banking startup Mercury until Evolve and Mercury decided to work directly with each other and cut out Synapse as a middleman.

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