Summary
Lineage Bank, a small Franklin, Tennessee lender that grew from $27M to $300M in assets through BaaS partnerships with Synctera and Synapse, has agreed to a second FDIC consent order dated June 24, 2026 — its second in just over two years. The new order focuses on capital, earnings, credit quality, and deposit concentration, suggesting the 2024 remediation did not fully resolve the balance-sheet strain from its BaaS-fueled growth spurt and the Synapse collapse. The order requires a three-year business plan, profit plan, capital plan, brokered-deposit management plan, and interest-rate-risk mitigation plan.
Key Facts
- Second FDIC consent order, dated June 24, 2026, disclosed July 31, 2026
- First order: January 29, 2024 — required enhanced risk management, 12.5% tier 1 leverage, 16% risk-based capital
- Assets grew from $27M (2020) to $300M (2023) through BaaS partnerships
- Synapse collapse (2024) froze funds of ~100 fintech platforms and hundreds of thousands of end users
- New order: three-year business plan, profit plan, capital plan, brokered-deposit plan, interest-rate-risk plan
- No dividends or management fees without prior FDIC consent
- Recap Financial Ventures acquired majority stake in holding company (March 2026)
- Lineage brought in new chairman and CEO after first order
- Second order focuses on capital, earnings, credit quality, deposit concentration — not just third-party oversight
Why It Matters
Lineage's second consent order is a significant signal for the entire bank-fintech partnership model. It demonstrates that a bank can go through remediation, change leadership, and even change ownership — and still be found short on capital, earnings, or credit quality years later. The FDIC is treating rapid, partnership-fueled asset growth as a risk factor in itself, one that invites a capital and earnings review even after third-party oversight gaps are remediated. For fintech operators routing deposits or card programs through partner banks, the message is clear: due diligence must track not just current regulatory standing but the trajectory of prior orders, leadership turnover, and ownership changes. The order also reinforces the trend of fintechs opting to become the bank rather than lease one.