Bradley's Financial Services Perspectives Post Cited in Law.com Article on Regulatory Scrutiny of Fintech Expansion by Smaller Banks

A post from Bradley’s Financial Services Perspectives blog authored by Jack Harrington, Jacque Kruppa, and Howard Herndon was cited by Law.com in an article on smaller banks expanding into fintech and payment-processing activities without adequately expanding their compliance and risk-management infrastructure.

The authors of the post said that regulators are paying close attention to smaller institutions, "particularly those that have expanded rapidly into payment processing and fintech-adjacent business lines without proportionally scaling their compliance infrastructure."

"The pattern is instructive," the post explained. "Community banks seeking to diversify revenue through fintech partnerships and payment processing services are inherently taking on disproportionate risk relative to their traditional business profiles."

The comments serve as a warning to community banks pursuing fintech growth: Expanding into payment processing, fintech partnerships or similar businesses can materially increase regulatory and operational risk.

The full article, “Fifth Bank Failure This Year Underscores Struggle Among Smaller Lenders,” was published by Law.com on August 26, 2026.