> FDIC insurance doesn't cascade into your customers' accounts, because if it did, you'd be a bank.

It does cascade. It's called pass-through deposit insurance, it's codified in 12 CFR § 330.5 and 330.7. It has existed since the founding of the FDIC. Its enabling statute expressly provided that deposit insurance should be calculated based on the beneficial owners of a deposit account, regardless of in whose name the account is. [0]

Common arrangements include: HSAs, HOA accounts, UTMA/UGMA accounts, guardians and conservators, mortgage servicing accounts, escrow and title agents, payroll processors, brokerage cash sweep programs, prepaid cards, and yes, fintechs. [1]

[0] https://www.fdic.gov/notice-proposed-rulemaking-custodial-de...

[1] https://www.fdic.gov/financial-institution-employees-guide-d...