1. Required statutory disclosure
This statement is provided in the form prescribed by the Bureau of Consumer Financial Protection ("CFPB") under 12 CFR § 1009.3 and is required to appear on every periodic statement of account, signature card, and equivalent record we provide to you, as well as on this website and in any advertising of our deposit products.
Please read this Disclosure in full before opening, funding, or maintaining an account with PayServices Bank.
2. PayServices Bank's charter and supervision
PayServices Bank is a banking corporation organized and operating under the laws of the State of Idaho, with its principal place of business at 950 W Bannock Street, Suite 1100, Boise, Idaho 83702-6140, United States. PayServices Bank is supervised by the Idaho Department of Finance under the Idaho Bank Act (Idaho Code Title 26).
Idaho Code § 26-217 empowers — but does not require — Idaho-chartered banking institutions to obtain federal deposit insurance through the Federal Deposit Insurance Corporation ("FDIC"). PayServices Bank has elected to operate as a state-chartered depository institution without FDIC insurance. Operating without federal deposit insurance is a lawful business model under Idaho and federal law, and PayServices Bank remains subject to ongoing prudential supervision, examination, capital and liquidity requirements, and consumer-protection rules administered by the Idaho Department of Finance and applicable federal authorities.
What this is not. PayServices Bank is not a "Member FDIC" institution. We are not authorized to use the FDIC's name, logo, or any term or image suggesting that funds at PayServices Bank are insured by the FDIC. Any representation to that effect would be a violation of FDIC Part 328 Subpart B (12 CFR § 328.100 et seq.) and federal law.
3. What this means for your funds
Funds you deposit, hold, or maintain at PayServices Bank are not insured by the FDIC, the National Credit Union Administration ("NCUA"), or any other federal or state government agency. There is no federal or state guarantee that you will get your money back if PayServices Bank fails, becomes insolvent, or is otherwise unable to meet its obligations to you.
If PayServices Bank fails, you would have a claim against PayServices Bank as a creditor under applicable Idaho receivership and federal bankruptcy law. The amount you would actually recover, and the timing of any recovery, depends on the assets available in receivership or bankruptcy and the priority of your claim relative to other creditors. Recovery in such circumstances is not guaranteed and may be partial, delayed, or unavailable.
This is materially different from the position of customers of FDIC-insured banks, whose deposits are insured up to the standard maximum deposit insurance amount (currently $250,000 per depositor, per insured bank, per ownership category) by the FDIC.
4. How PayServices Bank holds your funds — the 100% reserve model
The most important fact about your money at PayServices Bank is not what insurance covers it; it is what we are permitted to do with it.
No lending, no investment. The Idaho Department of Finance, in its supervisory capacity over PayServices Bank, does not permit PayServices Bank to invest, lend out, or otherwise expose customer deposits to credit, market, or duration risk. As a result, customer deposits at PayServices Bank are held in reserve at a 100% ratio — for every dollar a customer deposits, one dollar is held against it. PayServices Bank does not make loans funded by customer deposits, does not maintain a maturity-mismatched investment portfolio funded by customer deposits, and does not engage in fractional-reserve lending against customer deposits.
Why this matters. The historical purpose of federal deposit insurance is to protect depositors from the consequences of bank failure — an event that, in a fractional-reserve banking system, can occur when depositors lose confidence and demand their money back faster than the bank can liquidate the loans and investments funded by those deposits (a "bank run"), or when those loans and investments lose value (a solvency crisis, as in the 2023 collapse of Silicon Valley Bank). PayServices Bank does not run that risk because PayServices Bank does not lend out or invest customer deposits in the first place. There is no maturity mismatch to unwind, no investment portfolio to liquidate at a loss, no lending book to write down. The dollar a customer deposits is the dollar that is available to that customer on demand.
The trade-off. Because customer deposits at PayServices Bank are not invested, customer deposits at PayServices Bank do not earn interest. Banks that pay interest on deposits do so by lending out or investing those deposits and sharing some of the resulting yield with the depositor; that yield is the depositor's compensation for the credit, market, and duration risk they bear. PayServices Bank does not transfer those risks to its depositors and, accordingly, does not pay interest on deposits. Customers who want their money to earn a return have a wide range of investment products available to them — including, where offered, products from PayServices Bank's affiliates and from other banks on the PayServices Network. (See Section 5 below, and the Affiliates and Subsidiaries Disclosure.)
What this is not. The 100% reserve model is not federal deposit insurance, and is not a substitute for federal deposit insurance. It is a different mechanism that addresses the same underlying risk — the risk that a depositor's money becomes unavailable because the bank cannot meet a withdrawal request — through structural operating constraints rather than through a federal guarantee. The protections this model provides are limited to the discipline imposed by Idaho banking law, the Idaho Department of Finance's supervisory regime, and PayServices Bank's compliance with both. It is not a guarantee against fraud, error, force majeure, or other operational risks that could affect any financial institution.
Investment products are available through affiliates. Although PayServices Bank itself does not offer investment products, lending products, or interest-bearing deposit accounts, this constraint does not extend to PayServices Bank's affiliates, subsidiaries, or sister companies. Other entities in the PayServices group, and other banks on the PayServices Network, may offer such products under their own licenses and regulatory frameworks. Where these products are offered, they will be clearly identified as products of those other entities and not of PayServices Bank, and they will be governed by the disclosures and terms of those other entities. See the Affiliates and Subsidiaries Disclosure for more.
5. Funds held at correspondent banks on the PayServices Network
The PayServices Network includes other banks and licensed financial institutions that participate in the Network. Some of those participating banks are FDIC-insured; some are insured by another country's deposit-protection scheme; and some may operate without federal deposit insurance.
Where you hold an account at a participating bank other than PayServices Bank, the deposit-insurance arrangements (if any) of that other bank — and not those of PayServices Bank — apply to the funds in that account. The terms and disclosures of that other bank are made available to you in-app at the time you open or are connected to the account.
Where PayServices Bank holds your funds in a custodial or "for benefit of" arrangement at an FDIC-insured correspondent bank, those funds may be eligible for FDIC pass-through deposit insurance at the correspondent bank, subject to the FDIC's pass-through rules and the standard maximum deposit insurance amount. Pass-through eligibility depends on factual circumstances and is not guaranteed; we will disclose to you, in-app at the time of account opening or transaction, the specific arrangement that applies and whether pass-through insurance is available.
6. International accounts and local deposit protection
For customers outside the United States, the U.S. federal deposit-insurance system has no application. Funds held in accounts outside the United States are subject to the deposit-protection scheme (if any) of the jurisdiction in which the account is held, including, where applicable, the Banque des États de l'Afrique Centrale, the Banque Centrale des États de l'Afrique de l'Ouest, the European Deposit Insurance Scheme, the United Kingdom Financial Services Compensation Scheme, and equivalent national-law regimes.
The protections (if any) of those local schemes apply only to accounts held at institutions licensed and operating in those jurisdictions, and only on the terms set out in the applicable local law.
7. Required customer acknowledgment
Under 12 CFR § 1009.5, PayServices Bank may not receive a deposit from any new customer without first obtaining that customer's signed written acknowledgment that:
- PayServices Bank is not federally insured; and
- If the institution fails, the Federal Government does not guarantee that the depositor will get back the depositor's money.
This acknowledgment is presented to you, and your signature (electronic or otherwise) is collected, during the account-opening flow in the ITAM application before any deposit is received. You must complete this acknowledgment before opening or funding an account.
8. How your funds are protected
Although PayServices Bank does not carry FDIC insurance, your funds are not unprotected. The protections that apply to your funds at PayServices Bank include:
- Prudential supervision. PayServices Bank is examined and supervised by the Idaho Department of Finance, including with respect to capital adequacy, liquidity, asset quality, internal controls, and risk management.
- Capital and liquidity requirements. PayServices Bank is required to hold capital and liquid assets sufficient to meet its obligations under Idaho banking law.
- Segregation and custody. Where applicable, customer funds are held in segregated accounts and are not commingled with the operating funds of PayServices Bank.
- Audit and reporting. PayServices Bank is subject to annual independent audit and to regular reporting to the Idaho Department of Finance.
- Consumer-protection rules. PayServices Bank is subject to applicable consumer-protection laws and CFPB rules, including the Electronic Fund Transfer Act, the Truth in Savings Act, the Gramm-Leach-Bliley Act, and the Bank Secrecy Act.
- Network-level protections. Where your funds are held at participating banks on the PayServices Network that are themselves FDIC-insured or covered by another deposit-protection regime, those protections apply at the holding institution.
None of these protections is a substitute for federal deposit insurance, and none of them guarantees the return of your funds in the event PayServices Bank fails.
9. Legal basis
This Disclosure is provided in accordance with:
- Section 43 of the Federal Deposit Insurance Act, 12 U.S.C. § 1831t — requiring depository institutions lacking federal deposit insurance to disclose that fact to depositors;
- 12 CFR Part 1009 (Regulation I) — the Bureau of Consumer Financial Protection rule prescribing the form, content, and placement of this disclosure;
- FDIC Part 328 Subpart B, 12 CFR § 328.100 et seq. — prohibiting any person from misrepresenting the status of FDIC deposit insurance;
- Idaho Code § 26-217 and the Idaho Bank Act (Idaho Code Title 26) — under which PayServices Bank is chartered and supervised.
10. Changes
If PayServices Bank obtains federal deposit insurance in the future, this Disclosure will be updated and customers will be notified accordingly. Until that time, this Disclosure remains in full force and effect.
11. Contact us
For questions about this Disclosure or about the deposit-insurance status of your account:
PayServices Bank
Compliance Department
950 W Bannock Street, Suite 1100
Boise, Idaho 83702-6140
United States
info@payservices.com