Happy Friday once again!  It’s been a crazy week even if you ignore the political stuff and global pandemic. 

So let’s get to it – here is the Uncle Sean Update for 1/15/21:
Money, money, money, money ("For The Love of Money" by The O'Jays - you’ll be singing it the rest of the day)!  From capital raises to smoking hot IPO markets, there is no shortage of investors or liquidity. 

Here are a few of the honorable mentions this week:

• Blend raises $300M in Series G (yes – G) and jumps to $3.3B valuation - Blend Series G
• Rapyd raises $300M in Series D with a $2.5B valuation - Rapyd Series D
• MX raises $300M in Series C, Increases Valuation to $1.9 Billion - MX press release
• EU FinTech firm Curve raises $95M in Series C to expand to the US and plans to offer a BNPL type of service as well (and why not – all the cool kids are doing it!) - CNBC - Curve Series C

Affirm (BNPL platform) IPO priced at $49 per share debut (Nasdaq: AFRM) for a whopping $12B valuation; opened up 90% at $90.90; and closed their initial day of trading at $97.01.  But wait – there’s more…  They closed the week out at a stunning $117 per share – CHA-CHING!!!  Check them out on yahoo finance - AFRM.  You can read up on their S-1 here - SEC - Affirm S-1

And even more BNPL (told ya all the cool kids were doing it) – I’m certain that this is more than just coincidental timing - LOL, but Citizens Bank issued a press release this week (2 days prior to the Affirm IPO) touting the success of their Citizens Pay BNPL platform – specifically stating more than “$6.4 billion in loans have been originated and the company has served more than 5 million accounts”

Walmart launches FinTech although they were notably vague on any specifics.  Check out their IR press release here - Walmart creates new fintech startup. “White hair moment” Anyone else old enough to recall the Walmart Bank / ILC debates of the past?  Here is an old but very good 2007 write-up from the Saint Louis Fed detailing the history behind Walmart’s banking plans beginning in 1999 with a proposed acquisition of Federal BankCentre through their 2005 ILC application with Utah DFI.

Makes me wonder if Walmart will again attempt an ILC; or if Arvest Bank (common Walton family ownership) or even Woodforest may provide BaaS for the Walmart FinTech???

SoFi valuation - I know we covered this last week, but I am focusing more specifically on the fact that they quantified the value of a bank charter to be between $200M - $300M per year – WOW!!!!.  See slide 35 in their investor deck - SoFi Investor Deck

FinTech alt lender Upgrade is “upgrading” (yes – I know how cheesy that was, but I just couldn’t help myself) to full Neo / FI Challenger bank status by launching a mobile banking app and debit card with 2% cash back (actually it is rewards checking) – here is the Upgrade Debit Card Press Release

Visa and Plaid mutually terminate merger agreement due to the fact that it has already been a year, and Visa did not believe the DOJ would move in a timely manner towards a reasonable conclusion and was not interested in a protracted and complex litigation.

Crypto custodian Anchorage becomes the first national “digital asset bank” in the U.S. by securing conditional approved for national trust charter from the U.S. Office of the Comptroller of the Currency (OCC) –  Not to minimize this because it is a very big deal and the first of its’ kind, but keep in mind that this is not a new institution.  It is a charter conversion from State chartered Trust to a Nationally chartered Trust.  BitPay and Paxos have also applied for OCC charters as crypto-native banks.

Speaking of the OCC, the very active and crypto friendly Brian Brooks stepped down (as was widely expected) as the head of the OCC this week - Brian Brooks resigns.  Even though he was only on the job for a few months (started as Deputy on April 1, 2020 and was named Acting Comptroller on May 29, 2020), he accomplished a great deal including becoming a thorn in the side of the CSBS and drawing the ire of a few in Congress – all in the middle of a global pandemic.  Here are a few notable achievements under his watch:  On Jul 22, 2020, the OCC published Interpretive Letter #1170, allowing national banks to custody crypto assets;  on Sep 21, 2020, the OCC published Interpretive Letter #1172, on holding stablecoin reserves - National banks can hold stablecoin reserves for customers;  on Jan 4, 2021, the OCC published the OCC Chief Counsel’s view on the use of independent node verification networks and stablecoins for payment activities. National banks can run blockchain nodes and use stablecoins for payments; and as mentioned above, on Jan 13, 2021, the OCC grants the first ever national charter for digital asset (crypto) bank.

Big Bank Earnings – 3 of the 4 mega banks (JPM, Citi, and Wells Fargo) reported earnings this morning.  The key takeaway is that while credit reserves are still sky high, they are all starting to lower the reserve levels ever so slightly.
​
Have you seen Stockpile?  Pretty neat little app for beginners that encourages responsible investing.  https://www.stockpile.com/

The NCUA placed Indianapolis' Newspaper FCU into Conservatorship (not a failure) because of unsafe and unsound practices at the credit union. Member services will continue uninterrupted while the NCUA works to resolve issues affecting the credit union’s operations.  Indianapolis’ Newspaper Federal Credit Union is a federally insured, federally chartered credit union with 1,155 members and assets of $6,604,355 according to the credit union’s most recent Call Report.  Shout out to the FedFis FI Analysis Team as the FedFis Rating© for Indianapolis’ Newspaper FCU was 4.56 at 9/30/2020 (the most recent call report available) placing them in the lowest possible percentile.

Random Uncle Sean Stuff:
We ended up getting almost 3” of snow last Sunday out here in the Hill Country just Southwest of Austin.  I had forgotten just how amazing it is to build a fire outside in the snow!!!!  As an added benefit – it was all gone by the next day and we are back to wearing shorts!

Getting ready to walk outside and fire up the grill for some chicken fajitas with grilled onions and bell peppers on a beautiful Texas Friday evening….   Mmmmmmm….  Wish you were here!
Have a GREAT weekend and stay safe!!!!
Uncle Sean

Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Happy Friday and welcome to the Uncle Sean Update for WK 2 of 2021!!!!

SoFi goes public via SPAC merger with Social Capital Hedosophia Holdings V (NYSE:IPOE). 

The deal values SoFi at a whopping $8.65B. (CNBC)

​In case you are wondering what the heck a SPAC is (don’t worry – if you don’t know what it is, that just means your normal), here is a good definition from Investopedia -

FinTech IPO Pipeline
For 2021 should be exciting – scratch SoFi off the list now, but we are still looking forward to Affirm, Coinbase, Robinhood, Marqeta, AvidXchange, Stripe (maybe), and even Instacart.

Okay – I admit that Instacart may be a stretch to include as a FinTech….  But all they have to do is issue a Business Debit Card to pay their contractors and they could even offer EWA as an added benefit…  Stride Bank, are you listening????

Stride Bank is the sponsor behind Chime, Lyft, One VIP, and most recently DoorDash DasherDirect program.

Customers Bank completes the sale of BankMobile to Megalith.  (Link)
In connection with the closing of the Merger, Megalith changed its name to “BM Technologies, Inc.” (“BMT”) and is now trading under the symbol BMTX as of January 6, 2021 (NYSE: BMTX).  


BBVA is shutting down Simple and Azlo as part of the acquisition by PNC. (NerdWallet)
Personally, I am not shocked by the closing of Simple.  BBVA took a lot of write-downs on that business over the years.  But I was a little surprised by Azlo as this unit was growing.  I guess this clarifies PNC’s position of remaining a BaaS sponsor bank through partnerships, but not wanting to own a fintech or direct bank (i.e. digital branch).

Recall the PNC earnings transcript from 3Q2020.
Bill Carcache -- Wolfe Research – Analyst – “…If I may squeeze in one last one. Bill, can you share your thoughts around the direct neo-banks, sort of the Chimes and others out there that operate exclusively online without traditional branch networks and, in this sort of post-COVID environment, how you see their presence impacting the competitive environment over, say, the next three to five years? And is there any potential benefit to deploying some of the BlackRock proceeds on a neo-bank? Or are those sort of capabilities things that you think you can build on your own?”

Bill Demchak -- Chairman, President, and Chief Executive Officer – “I'm trying to contain myself. I wish we had the opportunity to basically not have to make any money and grow customers by giving stuff away and running our back office on a third-party bank system that's written in COBOL from 50 years ago. But we don't have that luxury, yes. The tech capability of these guys, there's nothing that they have that we don't have, nothing that they have that we can't produce if we wanted to have.”

Ouch! LOL

PPP Round 2 to open up on Monday, January 11. 
The first two days are restricted to first time borrowers; and only financial institutions with less than $1B in total assets will have exclusive access to the portal.  (SBA Link)

OCC announced that Nationally chartered banks can use stablecoins and blockchains to facilitate payments and other activities
Specifically, “a national bank or federal savings association may validate, store, and record payments transactions" by serving as a node on an independent node verification network (INVN).  BankingDive has a good write-up on this.

The OCC News Release can be found here (this includes a link to the 10 page interpretive letter)

CFPB wants to issue and regulate FinTech charter (Link)
A task force created by the Consumer Financial Protection Bureau is recommending that Congress consider authorizing the bureau, and not the Office of the Comptroller of the Currency, to issue federal charters to fintech companies engaged in lending, payments or remittances. "There is an opportunity for the CFPB to be an even more powerful force to promote consumer protection and welfare, to be a chartering entity for fintechs," says Todd Zywicki, chair of a CFPB-appointed task force on consumer regulatory reform. -

Of course the OCC was quick to respond saying they should be the one to issue and regulate the FinTech charter -

Hmm, just a few weeks ago we discussed the CSBS suing the OCC over the same issue – “CSBS asserts that the OCC is overstepping their bounds”

In the old days, we called this irony…..  HaHaHa!!!

Just in case you are having trouble falling asleep, here is the CFPB press release that includes links to the Taskforce Report (2 volumes totaling 898 pages) -
CO Federal Credit Union placed into conservatorship (not a failure) by NCUA

Warning – what comes next is a shameless plug for our FedFis FI Analysis Team because, well….  they are awesome!!!)  In case this comes up in any of your discussions with regulators, customers, or prospects, our FedFis Rating© for C O FCU was 4.15 and 4.21 in 3Q20 and 2Q20 respectively placing them in the bottom 4% of all credit unions each quarter.  This is the first conservatorship of 2021; and the latest by the NCUA since Southern Pine (6/11/20) which is still in conservatorship.
 
Random Uncle Sean Stuff:
We made it to 2021 – and the hits just keep on coming….  Keep an eye out for flying monkeys as I am certain that should be any day now– LOL!!!!
I finally got my winter/early spring garden completed last weekend.  75 onion sets, 15 spinach transplants, and my carrots and radishes are doing great.  HOWEVER, my damn cat thinks it is funny to dig the onions up every few days; and apparently he likes to eat the spinach leaves too (I’ve caught him in the act several times)….  Beginning to think he is just pure evil!

They are calling for 50% chance of snow here in Austin late Sunday night and I am 100% stoked about it!!! 
By the way, if you are working remotely, can you still get a snow day off (asking for a friend)???
 
Have a GREAT weekend and stay safe!!!
 
Uncle Sean

​FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Because we're just doing what we do every year. If ya don't know us, here's who we are.

FedFis builds data solutions for the U.S. Banking and FinTech industry.
 
How do we do it:  Blending public datasets (Call Report Financials, Branch, Demographics, M&A, Contact Data, etc.) with proprietary FedFis datasets (FinTegration Ecosystem©, FinTech Analytics©, FinTographics©).  By blending public and proprietary datasets, then applying advanced data science techniques, FedFis is able to deliver intelligent insights that represent Financial Institution and FinTech data in its most intelligent form. 
 
Industry Impact:  In short, we move market share. FedFis has redefined what tactics are possible in the banking industry, allowing our customers to predominate competition.  We build Executive-Level data strategies that weaponize data tactics throughout the organization.  Resulting in faster growth with greatly reduced customer acquisition cost, and making the right partnerships.  
 
Who uses FedFis Data:  FedFis customers include nine of the top ten banking core processors, nine of the top ten payments firms, and countless Banks, Regulators, VC’s, FinTechs and other large financial services firms.
 
FedFis.com or follow on LinkedIn for the latest company news & industry insights. Or just give us a call.

Happy New Year’s Eve!!!!
 
Wow – and we thought last week was a light week!  I think everyone is just laying low trying to exit 2020 as quietly as possible (there is no need to poke the bear).  Anyhoo – here is the last Uncle Sean Update of 2020:

Stimulus Package (stop me if you’ve heard this one before - LOL) was signed into law late Sunday evening despite President Trump’s push for higher direct payments.  There was a subsequent attempt to increase the direct payments to individuals from $600 to $2,000 early this week that passed with majority through the House but has stalled out at the Senate as other items were tied into the bill.  ​
Fintech firm Current has been distributing stimulus payments all week.                                                                                                                                             
JP Morgan Chase makes a bet on post-pandemic travel through the acquisition of cxLoyalty Group’s rewards platform that serves 70 million customers and 3,000 client and marketing partnerships. 
Synchrony and PayActiv join CFPB’s compliance assistance sandbox.  This basically protects them for two years while developing their product provided they comply with terms of the approval.
Synchrony is seeking to develop a “dual-feature credit card” that is designed for consumers with a limited or damaged credit history as a tool that can be used to establish or reestablish a favorable credit history.  Basically it is a lower rate on secured card with the opportunity for eligible accountholders to graduate to unsecured use after 12 months.

PayActiv received “CFPB’s sandbox approval” which states that PayActiv’s program is not credit under the Truth in Lending Act.
Recall a few weeks ago where we discussed Earned Wage Access (EWA) and the clarification from the CFPB.  Basically if you are dealing with the payroll provider with no recourse to the employee then you are not establishing credit (and not susceptible to Reg Z Truth in Lending requirements) – this includes companies such as PayActiv, DailyPay, Immediate, and Even.  However, if you are dealing directly with the employee, then you are establishing credit.  This points more towards the dreaded term “payday lender”, and includes companies such as Brigit, Dave, and Earnin.  Here is the more lengthy description.
 
OCC grants approval for LendingClub to acquire Radius Bank (Link)
LendingClub still needs Federal Reserve approval to become a Bank Holding Company, but this gets them one step closer.  This deal was announced in February and was expected to take 12 – 15 months to complete, so there is optimism that the process is moving along nicely and may even close ahead of original projections.   
Random Uncle Sean Stuff:
This morning we had a thunderstorm with gusty wind, heavy rain, and 35 degree temps….  It immediately took me back to the time me, Dave, Tanner, and my son went on a guided catfishing with Tex Elliot.  I guess that was almost 10 years ago now.  It was so cold, wet, and ugly out; but we caught a lot of good catfish and my son pulled in a nice 20lb Blue Cat at the end of the trip for his personal best (at the time).    

Just in case you need this info - Blue Catfish prefer fresh shad over all other baits.  However, in a pinch (shad can be difficult to find during cold weather), I have had pretty good success using boneless skinless chicken breast.

PLEASE – don’t forget to eat black eyed peas tomorrow!!!! I like mine with Rotel and bacon.  Cook it down some and it tastes a lot like Bean Dip – you’re welcome!!!!  LOL
 
Have a great weekend and please stay safe!  Happy New Year everyone!!!!!
 
Uncle Sean

FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.

Happy Holidays Everyone!!!!!
 
It has been a very light week as expected, but there are a few big items worth noting – below is the WK52 General Update from Uncle Sean:
 

• FIS courting Global Payments – FIS was in talks to acquire Global Payments, but negotiations fell apart over the weekend.  Check it out here – https://www.pymnts.com/news/partnerships-acquisitions/2020/fis-global-payments-eyed-merger-but-talk-broke-down-report-says/
  • Many are speculating that this is a negotiation strategy and talks will inevitably resume
  • If you don’t think payments is big business, take a look at some of these recent merger valuations:
    • The FIS / Global Payments deal would have been valued at a whopping $70B
    • for reference, the WorldPay acquisition by FIS in 2019 was $35B; and FIS has a current market cap of $90B – so this deal would have been HUGE
    • Global Payments owns TSYS per a merger in 2019 valued at $21.5B

 

• Ho Ho Holy Cow - Congress passed a $900B stimulus bill (finally)!!!!  https://apnews.com/article/900b-coronavirus-relief-bill-passed-a38250860a0e720bde8481fe1aab744b
  • “Not so fast, my friend” (intentional nod to Lee Corso during Bowl Season).  President Trump is not impressedand sent out a video Tuesday night stating that he would not sign the economic relief bill on the basis that the stimulus checks are “ridiculously low”.  Trump called on Congress to increase the stimulus checks from $600 to $2,000 ($4,000 per couple).  So for now, we sit tight and see what happens next.  https://www.cbsnews.com/news/stimulus-check-600-2000-dollars-eligibility-2020-12-23/
  • Here are the major points of what’s in the $900B package as it exists in its current form https://nymag.com/intelligencer/2020/12/what-is-in-the-usd900-billion-covid-second-stimulus-package.html:
    • $286B in direct aid to individuals
      • $166B in direct checks ($600 per person plus $600 for each covered dependent) plus another $120B in Unemployment help (extra $300 per week in benefits through March 14)
    • $325B small business help – PPP is back with $285B in funding, $20B for business in low-income areas, and $15B for live venues, theaters, and museums
    • $82B for schools and colleges (includes $54B for public K-12 schools)
    • $10B specifically for child care providers
    • $13B federal SNAP benefits (food-assistance programs)
    • $45B for transportation (includes $15B airline payroll, $14B public transport, $10B state highways, $1B for Amtrak)
    • $25B in rental assistance and expands the federal eviction moratorium
    • $20B in vaccine funding plus $9B for distribution, and another $22B to assist States with testing and tracing

 

• CSBS files suit against OCC and their “fintech charter”.  Specifically related to Figure Technologies, Inc. and their application for a national OCC charter.  CSBS asserts that the OCC is overstepping their bounds by redefining what is a “bank” and establishing a de facto nonbank charter.   https://www.csbs.org/newsroom/csbs-files-new-complaint-against-occ

 

• Direct Banks (digital divisions of chartered institutions) are making some noise:
  • Goldman Sachs is strengthening their Direct Bank brand Marcus by introducing Marcus Invest scheduled for launch in 1Q 2021.  In contrast to GS multi-million dollar private wealth management service, Marcus Invest can be opened with as little as $1,000 appealing to the masses and still incorporates a professionally managed portfolio of ETF’s that is “monitored daily and rebalanced periodically to help you meet your goals.”  More detail here - https://www.cnbc.com/2020/12/22/goldman-sachs-once-reserved-for-the-rich-is-close-to-offering-wealth-management-for-the-masses.html
  • Customers Bank is one step closer to completing the sale of their Direct Bank brand, BankMobile.  Closing of the $140M merger is expected on 1/4/21 - https://www.businesswire.com/news/home/20201221005797/en/Customers-Bancorp-Provides-Additional-Information-About-BankMobile-Divestiture

 
 
 
Random Uncle Sean Stuff:

• It’s the time of year where we see a ton of predictions for 2021 and beyond (I admit – they are all entertaining; and some have solid merit)….  Forget about it – Uncle Sean doesn’t do predictions!!!!   I broke my crystal ball back before the dot com bubble – LOL.
• Since so many of us are spending our first Christmas with only our immediate household members due to the COVID-19 pandemic, I thought it would be fun to share what it was like when me and Davey were little:
  • My absolute favorite time is when we would spend Christmas with our Grandparents in Purcell, OK.  That house was about 900 sq ft with 3 bedrooms and 1 bath; and that includes the closed in single car garage where all the men would hang out, smoke Marlboro’s, and generally solve the problems of the world (all the while admiring Grandpa’s tools on his peg board).  The house had a window unit in the living room and a floor furnace.  There were gas wall heaters in the bathroom and the enclosed garage.  Yes, that one in the bathroom would brand you if you backed into it.  Looking back, we were indeed dirt poor, but we never really knew it.  Our Aunts, Uncles, and Cousins would pack in there and it was crazy (especially the one bathroom part)!  There would be up to 15+ people in that 900 sq ft house and at night time it looked like a triage center with kids in sleeping bags covering the floor in the living room underneath the glow of our artificial Christmas tree.  You literally couldn’t walk through there at night without kicking or stepping on someone.  It was great!!!!  Our Grandma (Nannie) would wake up at 5:00AM religiously (due to all the years of making early breakfast since Grandpa had to be at work by 6AM at the train depot) and start making coffee.  I vividly remember the sound and smell of the coffee percolator immediately followed by either bacon on the stove top or homemade cinnamon toast cooking in the bottom broiler of the oven.  Our days were generally spent climbing Red Hill while looking for critters and Rose Rocks; playing in the alley; catfishing and exploring at the City Lake (hey Dave – remember that time you fell through the ice on the sled with me and Scott laughing – HAHAHA); or hunting squirrels and rabbits at Lexington WMA (we called it the Rifle Range due to it being a former military training site during WWII).  Mom and Nannie would make trips to United grocery and the Dime Store for last minute essentials pretty much every day (undoubtedly just for some peace and quiet).  Occasionally we would get a glimpse of Nannie’s S&H Green Stamp book and wonder in awe what she was going to redeem it for (precursor to debit rewards platform?).  Nights were spent playing Gin Rummy or Dominoes while we awaited phone calls from other relatives that couldn’t be there.  Grandpa was ‘hard of hearing’ so the phone had a special ringer that was like a bolt of electricity shooting through your spine when it rang – that ringer could just about wake the dead (the doorbell was twice as bad)!!!  Wait, it gets even better – our Grandma on our Dad’s side of the family lived just a block away.  We would run across the street, cut through the alley behind Ms. Kosak’s house, and be at our other Grandma’s house in less than a minute.  Even though that time period only lasted a handful of years when we were young, it was fantastic!!!

 
 
Have a GREAT weekend and please stay safe!  Happy Holidays!!!! 

Uncle Sean
smayo@fedfis.com

Happy Friday once again!!!! 
 
Here is the WK51 General Update from Uncle Sean:
 

• BREAKING NEWS - Fed announced late today that it will allow the nation’s largest banks to resume share buybacks in the first quarter of 2021.  This is really big news for bank stocks and could spur M&A activity as share prices rise - https://www.cnbc.com/2020/12/18/fed-to-allow-big-banks-to-resume-share-buybacks-with-limitations.html
  • Immediately, JP Morgan announces $30B buyback program for 2021 - https://seekingalpha.com/news/3645975-jpmorgan-chase-sets-new-30b-buyback-program-after-stress-test?mail_subject=jpm-jpmorgan-chase-sets-new-30b-buyback-program-after-stress-test&utm_campaign=rta-stock-news&utm_content=link-1&utm_medium=email&utm_source=seeking_alpha

 

• Moderna vaccine gets FDA approval.  We are waiting on emergency use authorization (EUA) which could come this evening or tomorrow, and would clear the way for distribution to begin early next week.  https://finance.yahoo.com/news/coronavirus-update-fda-to-weigh-moderna-covid-19-vaccine-new-over-the-counter-antigen-test-180331158.html

 

• BaaS – Aeldra (https://aeldra.com/) is a new fintech / aspiring Neo Bank that allows people in India to open a US bank account and a Mastercard debit card using an Indian Passport (interesting KYC component here).
  • New Direct Bank – GO2bank, a division of Green Dot Bank, is launching soon and is rich with features (powered by Q2, Ingo Money, Plaid, Visa, etc).  Check it out - https://www.go2bank.com/ 
    • This brings our total Direct Banks to 79 and counting.  Pretty exciting as Direct Banks are really hard to capture (I know… It’s shocking that incumbent Banks still have marketing problems even when launching a new digital brand – LOL)
    • Don’t be surprised if GO2bank soon announces EWA for on-demand contractor / gig wages as Green Dot recently made a $2.5M investment in Gig Wage as the lead investor in their recent Series A - https://www.businesswire.com/news/home/20201027005252/en/
      • Banking services for Gig Wage are currently being provided by Evolve Bank & Trust….  Things might get interesting here….

 

• GM Financial Bank filed for Utah ILC charter (as we’ve been expecting) and subsequent FDIC insurance this week. https://dfi.utah.gov/general-information/application-status/; https://www.fdic.gov/regulations/applications/pending.html
  • Yes, this is the automaker.  Here is a bit of boring history if you are interested, or you can just scroll down to DoorDash below (LOL):
    • It is important to note that this would not be GM’s first time in the banking sector.  GMAC (General Motors Acceptance Corp) nearly failed during the financial crisis in 2008 due to exposure of subprime mortgages.  The unit was spun off and renamed Ally Financial (Ally Bank FDIC Cert 57803) after receiving government sponsored financial assistance.  Later, the residential mortgage arm of Ally (formerly GMAC ResCap) filed for bankruptcy and eventually liquidated in December 2013.  However, it appears that this time around, GM would limit the use of the ILC charter for the main purpose of generating liquidity through the acceptance of deposits.
    • ILC Charters are not unique in the Auto finance industry.  If GM is granted an ILC charter, it will join the existing ranks of Toyota Financial Savings Bank (FDIC Cert 57542) and BMW Bank of North America (FDIC Cert 35141).

 

• Bobby – this one is for you!!!  DoorDash (NYSE: DASH) has finally transferred over into true FinTech world.  DasherDirect is the new banking solution for DoorDash delivery drivers.  The Business Prepaid Visa card and mobile banking app is issued by Stride Bank and powered by Payfare.  Key feature is EWA - offers Dashers no-fee daily deposits of their DoorDash earnings.  Here is the press release - https://www.prnewswire.com/news-releases/doordash--payfare-partner-to-launch-dasherdirect-visa-card--mobile-banking-app-301192135.html
  • Just in case you didn’t know – Stride Bank is in Enid, OK which has a population of about 50,000 (not exactly what you would call the center of the FinTech universe)…  However, Stride Bank is growing an impressive sponsor resume – Chime, Lyft, One VIP, DoorDash, etc.

 

• Self Financial (local Austin, TX credit builder) raises $40M in Series D round.  This brings their total funding to $77M (Series C raise was $20M back in Feb) - https://www.globenewswire.com/news-release/2020/12/15/2145309/0/en/Self-Financial-Raises-40M-in-Series-D-Led-by-Meritech-Capital.html

 

• IPO market for fintech remains smoking hot:
  • Upstart (NASDAQ: UPST) IPO – they opened at $20 per share on 12/14 and closed the week out on 12/18 at $40 per share. https://finance.yahoo.com/quote/UPST?p=UPST&.tsrc=fin-srch
  • Coinbase (crypto exchange) files for IPO as Bitcoin rolls to $23,000 - https://cointelegraph.com/news/the-coinbase-ipo-is-coming-according-to-sec-filing
  • Affirm (BNPL category) decided to delay their IPO until next year - https://www.pymnts.com/news/ipo/2020/why-affirm-would-delay-its-ipo-amid-a-hot-market/

 

• Hey Robinhood - No press is bad press, right????  Well….. not exactly LOL…  Robinhood is back in the news again with a double whammy (that is a bona fide Uncle Sean technical term by the way) this week.  Right about the time they were agreeing to “settle” with the SEC and pay a $65M fine, they get sued by Massachusetts state regulator for “gamification of investing” and not focusing on their customers best interest by exposing them to “unnecessary trading risks” by “falling far short of the fiduciary standard.” - https://www.cnbc.com/2020/12/16/robinhood-reportedly-facing-complaint-by-massachusetts-regulators-over-targeting-young-users.html. 
  • While the monetary penalties here are a drop in the bucket for the $12B valued Robinhood, this latest issue is with Massachusetts only.  I wonder if we will see more regulatory complaints from other States….???

 

• Couple of important Regulatory updates – Moves in the right direction:
  1. FDIC clarifies ILC process (ILC’s are State chartered and this is good news for Challenger FI’s that do not want to go the National Charter / OCC route) - https://www.bankingdive.com/news/fdic-industrial-loan-company-charter-ruling/592285/
  2. FDIC Updates and Clarifies Brokered Deposit Rule – This is pretty cool – by clarifying “brokered deposits,” this update provides more flexibility in bank funding sources (banks that are considered less than “well capitalized” are prohibited from accepting brokered deposits); and undoubtedly will facilitate more bank / fintech sponsorships.  OCC comment in support - https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-170.html
     • If you really want to geek out, here is the full 177 page FDIC ruling - https://www.fdic.gov/news/board/2020/2020-12-15-notice-dis-a-fr.pdf

  
 
Random Uncle Sean Stuff:

• Wishing Davey a Happy Birthday today!!!!  I think he is 39…. which makes me 30!!!  Yeah Baby!!!
• Today is the last Friday before Christmas.  Men all across this great nation have 6 more days before we even begin to think about shopping for gifts.
  • By the way, if you happen to see Santa, put in a good word for me – I need it!!!!  Seriously…..
• My middle sonjust finished his last Fall Semester of High School; and my daughter hasn’t crashed the car yet – WOHOO!!!!
• Catfish can swim in short bursts up to 15+ MPH.  ESPN estimated that Michael Phelps could hit around 5 MPH top speed.  That means a catfish could literally swim circles around Phelps at his peak.  I really need to get out of the house…  HAHAHAHAHA!!!!

 
 
Have a GREAT weekend and stay safe!!!

ppy Friday!!!
 
Here it is – The Infamous Week 50 General Update from Uncle Sean:
 
In case you were too busy working, drinking, or hiding under a rock (or even all of the aforementioned activities at the same time) – the number one greatest thing this week is the advisory panel approval of the Covid-19 vaccine developed by Pfizer – looks like vaccines in the US can begin Monday or Tuesday!!!!  Read up on it here - https://www.wsj.com/articles/fda-advisory-panel-takes-up-pfizer-biontech-covid-19-vaccine-11607596201.  As a result, FedEx, UPS, and DHL are gearing up for what is being described as “the biggest global logistics effort since WWII” - https://www.cnbc.com/video/2020/12/08/shipping-companies-prepare-for-covid-19-vaccine-distribution-challenges-ahead.html?&qsearchterm=vaccine%20distribution
 
 
Other headlines for the week:

• CDC moratorium on evictions for nonpayment of rent is set to expire on 12/31.  There are some proposals being kicked around right now, but congress has proven that they just can’t get their shit oops I mean “stuff” together (the current $908B bill that recently stalled had about $21B in rental assistance included).  This could potentially impact multi-family loans on bank balance sheets next year as landlords may not be able to service their debt due to lack of funds from rental payments. https://abcnews.go.com/US/eviction-crisis-looms-millions-rely-federal-moratorium-expiring/story?id=74589282

 

• Congress passed the Anti-Money Laundering Act of 2020 this week (part of the broader NDAA bill).  End result is it will hopefully help lower bank compliance costs and alleviate the burden of collecting beneficial ownership information when corporations apply for bank accounts.  Now all U.S. corporations will have to register the identity of their beneficial owners in a Financial Crimes Enforcement Network (FinCEN) database - https://www.bankingdive.com/news/anti-money-laundering-fincen/591894/

 

• BaaS - We continue to add more fintech companies (One VIP, Grain, Immediate, DailyPay and more), but no new additions to Sponsor Banks (still at 70)
  • We added a new Direct Bank this week (Harq Bank – a division of Iroquois Federal Savings & Loan) which brings our total up to 78

 

• Gohenry (UK Challenger Bank) is coming to America and just raised $40M - https://www.bankingdive.com/news/gohenry-us-expansion-funding-Alex-Zivoder/591811/.  This is a PFM Ap targeting kids which is a great concept, but the space is starting to get a little crowded (Jasby, Greenlight, Copper, Indigo, Numoola to name a few).  They are partnering with Community Federal Savings Bank who also sponsors Greenlight.

 

• Crypto is still buzzing!  This gets really deep really quick, but the punch line is we are starting to track this internally as a separate list from “normal” bank de novo activity.  Basically, the SEC and the OCC are driving a lot of regulatory changes for crypto firms in order to provide custody services for digital assets, and we are starting to see a lot of applications for bank charters (and conversions from Trust to OCC National Charters) - https://www.nasdaq.com/articles/us-lawmakers-ask-sec-to-clarify-broker-dealer-rules-2020-12-09
  • BitPay has applied for a national bank charter with the OCC -  https://www.pymnts.com/news/banking/2020/bitpay-seeks-united-states-bank-license/
  • Paxos applied for OCC conversion from New York Trust to National Bank Charter - https://www.nasdaq.com/articles/paxos-becomes-latest-crypto-firm-to-file-for-federal-bank-charter-2020-12-09
  • Anchorage applied for OCC conversion from Trust to National Bank Charter - https://www.coindesk.com/custodian-anchorage-seeks-charter-from-crypto-friendly-us-bank-regulator-occ
  • Two Ocean and Kraken recently were awarded Wyoming Bank charters – actually Special Purpose Depository Institution (SPDI) charters. 

 

• Betterment CEO and Founder Jon Stein steps down as Sarah Kirshbaum Levy takes the reins -  https://www.thinkadvisor.com/2020/12/08/betterment-ceo-and-founder-jon-stein-resigns/

 

• CFPB is making some noise:
  • LendUp was sued by the CFPB for violating the Military Lending Act (MLA).  Hey Grace – remember this is the company that “helps” (cough cough) underbanked individuals by granting short-term 60 day credit for roughly 250% APR (that is not a typo). 
    • The MLA puts a cap of 36% APR on credit terms for active-duty service members and their covered dependents.  “The Bureau alleges that since October 2016, LendUp has made over 4,000 single-payment or installment loans to over 1,200 covered borrowers in violation of the MLA.” https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-sues-lendup-loans-llc-allegedly-violating-military-lending-act/ 
    • I did not know there was such a law, and I am not usually a proponent of big government or stringent regulations – but in this case, I am grateful the CFPB is watching over our active-duty service members.  And during the week of December 7th nonetheless – shame on you LendUp.

 

• Earned Wage Access (EWA) got some clarification from the CFPB.  Basically if you are dealing with the payroll provider with no recourse to the employee then you are not establishing credit (and not susceptible to Reg Z Truth in Lending requirements) – this includes companies such as PayActiv, DailyPay, Immediate, and Even.  However, if you are dealing directly with the employee, then you are establishing credit.  This points more towards the dreaded term “payday lender”, and includes companies such as Brigit, Dave, and Earnin.  Here is the more lengthy description - https://www.jdsupra.com/legalnews/cfpb-issues-advisory-opinion-on-earned-40259/

 

• We lost Chuck Yeager this week.  A celebration of life at 97 years - Godspeed Brigadier General, Charles “Chuck” Yeager.  AP News published a great article about him; and is definitely worth reading - https://apnews.com/article/chuch-yeager-dies-at-97-air-force-f027e8960916cbd8094ab9f05ec2cbf2

 

• IPO frenzy that still has me scratching my head (my inner Alan Greenspan is mumbling “irrational exuberance”)….
  • Doordash IPO (NYSE: DASH) – initiated at $102 per share ($39B valuation); opened at $182; and closed the week out at $175 - https://finance.yahoo.com/quote/DASH?p=DASH&.tsrc=fin-srch
  • AirBNB IPO (NASDAQ: ABNB) – initiated at $68 per share ($47B valuation); opened at $146; and closed the week out at $139.25 - https://finance.yahoo.com/quote/ABNB?p=ABNB&.tsrc=fin-srch

 
 
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And……  Here is the part that everyone has been waiting for (you can stop scrolling down now)….
 
Random Uncle Sean Stuff:

• My daughter passed her driving test!!!!  There goes the neighborhood (and my car insurance bill)!
• Cedar pollen is on the rise here in the Texas Hill Country – oh dear God….
• I grilled avocado the other day – served it on a hamburger and it was fantastic!
• Me and Dave got grounded once when I was around 5 or so because he convinced me to eat some Roly-polies / pill bugs.  He said they taste like French Fries….  They didn’t by the way….
  • Our parents grounded Dave because he should have known better (he is 9+ years older than me); and they just didn’t appreciate the sibling humor involved.  They grounded me because…  well…  I guess they were just utterly dumbfounded that I was that stupid.  LOL!!!!
• Patrick, we have a couple of years to prep – Paris 2024 here we come baby (insert Rocky theme music here)!!!!  https://www.espn.com/olympics/story/_/id/30470282/breakdancing-gets-olympic-status-debut-paris-games-2024

  
Have a GREAT WEEKEND and stay safe!!!

Uncle Sean
smayo@fedfis.com

Happy Friday!
 
I kind of enjoy this knowledge sharing thing, so I think I’m going to keep doing it for awhile.  Without further ado - here is another “General Update from Uncle Sean” for everyone.  The purpose of this is high level FYI items to keep in mind in case they come up in discussions with customers / prospects or other meetings (“in case you missed it” kind of stuff).  Or you can just delete it – LOL!!!
 

• BaaS - We are up to 70 Sponsor FI’s (66 Banks + 4 Sponsor Credit Unions)!!!  WOOHOO!!!  Also – just in case you were wondering, we are tracking 266 specific B2C fintech companies (aka challenger FI’s).  There are a lot more out there, but we pretty much have all the headliners.
  • Also tracking 77 Direct Banks comprised of 27 chartered FI’s, 2 waiting for charters (de novo), and 48 digital only FI’s (divisions of a chartered institution)

 

• Stripe Treasury – Probably the biggest fintech headline this week is Stripe entering the checking account space.  https://stripe.com/treasury

 

• Crypto Currency is the buzz word of the week - undoubtedly because Bitcoin hit +19,000 and is up 165% since the beginning of the year.  Largely driven by PayPal announcement that it would soon allow its users and merchants to buy, sell, hold, and accept Bitcoin and other cryptocurrencies as a form of payment - https://www.paypal.com/us/smarthelp/article/cryptocurrency-on-paypal-faq-faq4398?app=searchAutoComplete
  • BlockFI announced they are launching a credit card that incorporates crypto rewards - https://blockfi.com/join-the-waitlist-for-the-worlds-first-ever-bitcoin-rewards-credit-card

 

• BNPL – QuickFree just launched a BNPL application for business / professional services.  “Embedded Finance” anyone - LOL???  Check it out - https://quickfee.com

 

• LendUp launched a new fintech called Ahead - https://www.aheadmoney.com/

 

• Visa is still fighting it out with the DOJ over antitrust concerns regarding their pending acquisition of Plaid -https://www.justice.gov/opa/pr/justice-department-sues-block-visas-proposed-acquisition-plaid
  • Recall last week where Mastercard got DOJ approval to acquire Finicity; and Credit Karma had to divest their tax business to Square in order for Intuit to get DOJ approval to acquire Credit Karma
    • https://techcrunch.com/2020/11/16/the-doj-has-approved-mastercards-acquisition-of-finicity/
    • https://www.pymnts.com/news/partnerships-acquisitions/2020/intuit-closes-multibillion-dollar-deal-for-credit-karma/

 

• Great CNBC interview with Dallas Fed President, Robert Kaplan.  Summary – he is expecting tough economic conditions in the short-term due to the rapid increase in COVID-19 cases with credit losses peaking in 2Q2021 (this is what I am reading from the Big Banks as well).  However, he expects an overall annual GDP of 3 – 3.5% for 2021 with a strong weighting on 3rd and 4th quarters (expecting flat to negative GDP for 1st half of 2021).  https://www.dallasfed.org/news/Interviews/int201202.aspx

 

• Square – have you seen their stock market valuations lately (NYSE: SQ)???  300+ P/E Ratio – are you kidding me???  For reference, Visa and Mastercard trade at about 40 - 50 P/E.  Holy cow!!!  https://finance.yahoo.com/quote/SQ?p=SQ&.tsrc=fin-srch

 
 
 
Random Uncle Sean stuff:

• For my son's 23rd birthday (yesterday), we bought dinner from the Texas Crab Company (local food truck).  It was super good and I highly recommend them.  Check them out on Facebook / Instagram as they move around the Hill Country every few days or so.
• I joined AARP this year
• I have gained 18 pounds since the Pandemic started (I’m an overachiever)
• Christmas decorations are expensive
• My daughter (Claire) takes her driving test next Thursday!!!!  Oh dear Lord!!!!!

 
 
Have a great weekend everyone!!!!  Stay safe and practice social distancing whenever possible.
  
Uncle Sean
smayo@fedfis.com