​Happy Friday!!!
 
FinTech | Banking | Data – it’s what we do!  Here is the Uncle Sean Update for 6/24/22:

• Fiserv gets a BIG salute from Uncle Sean this week as a Premier Sponsor of the Bankers Helping Bankers platform to accelerate support for community banks with technology education, fintech data, and collaborative innovation.  OUTSTANDING!!!!!  I am super proud to be a part of this movement supporting community banking!
  • Don’t forget to check out Fiserv’s new App Market allowing an open platform for banks on Fiserv core (DNA, Cleartouch, Precision, Signature, and Premier) to easily offer and integrate FI FinTech solutions “to address emerging opportunities in crypto finance, gig economy banking, small and mid-size business (SMB) lending and other priorities.”
  • And while you are at it – check out Bankers Helping Bankers launched by IBAT and FedFis.
    • Bankers Helping Bankers is for bankers only, but don’t miss out on the BHB BaaS Association which affiliate membership is open to:
      • FinTech and Bank Vendors
      • And of course, Banks looking to become a Sponsor Bank / BaaS Bank

 

• In a bit of an abrupt move (although not completely surprising – more on that below), Brex announced that they are moving away from SMB's focusing on VC backed and enterprise level customers for growth.
  • The announcement clearly caught many customers off guard as they were told that they had until August 15, 2022 to find an alternate solution.  TechCrunch has a really good follow up clarifying the Brex decision to show that only startups without “professional” funding in place will be impacted.
    • Look – I get it.  This allows Brex to eliminate low growth potential (somewhat discriminatory) “boot-strapped” SMB’s AND mitigate a higher perceived credit risk.  But yeah – the delivery was a little rough.  Especially considering the branding of “Corporate Card for Startups.”  But to be completely fair – Brex had always focused on funding versus credit history. 
    • Also not surprising was the swift competitor response – RelayFI was quick on the draw to capitalize and offer $150 for switching from Brex to Realy with proof that the customer was affected by Brex’s decision.
  • Pedro Franceschi (founder and co-CEO) gave an updated Blog post this week basically stating, yep – we botched that announcement and could have / should have done better.

 

• Tillful (business credit for SMB’s) announced a partnership with Experian to help establish and build “credit profiles for businesses that are new to credit or otherwise credit invisible, and thereby potentially expand the range of credit options that can be made available to them.”  A VERY COOL concept!
  • Recall on the Uncle Sean Update from 6/3/22, we talked about the launch of the Tillful Card (Mastercard issued by Sutton Bank).

 

• Zogo (gamified financial literacy app) announced that they have reached 200 Financial Institutions and 700,000 Users in Less Than 3 Years– WOW!!!!
  • I personally love the fact that the majority of their users are under the age of 24 as Uncle Sean is a HUGE proponent of financial literacy for everyone.  Check them out at Zogo.com. 

 

• “Let the dividends begin!”  Oops - sorry, did I just say that (LOL)???
  • The Federal Reserve Board released results of their annual stress test of the nation’s 33 largest banks. Punchline is that all banks perform well above required CET1 minimum capital levels under severe adverse scenario testing (despite a more rigorous stress scenario than last year).
  • You can check out the  66 page DFAST stress test report here including individual bank results.  BankingDive also has a good summary suggesting that dividends will likely remain flat, but certain banks may pare back buyback plans.

 

• FTX US (crypto exchange) announced the acquisition of Embed Financial Technologies, a white-label brokerage platform, in support of FTX Stocks to provide comprehensive equity and ETF trading across all asset classes – not just crypto.

 

• Truist completes their new Innovation and Technology Center in Charlotte, NC.

 

• Worth keeping an eye on – the CFPB is looking at credit card late fees as a potential area to crack down on as inflation threatens consumers.

 

• Notable FinTech funding for the week:
  • Autobooks (embedded payment and accounting platform for small businesses used by over 800 financial institutions) raised $50M in Series C funding round.  Valuation was not disclosed, but the company did state that they now have over 60,000 businesses on the platform with 840 bank installs – NICE!!!
  • Wahed (Muslim faith-based ethical investing / wealth mgmt app) raised $50M in Series B round and plans to launch a neobank soon.
  • Tapcheck (on-demand / earned wage access platform) raised $20M in Series A funding round.
  • Prime Trust (regulated crypto infrastructure platform) raised $107M in Series B to further enhance new offerings and wealth products such as their API-enabled Crypto IRA.
  • BlockFI (digital asset / crypto platform) signs a $250M credit facility from FTX to provide liquidity and “bolster BlockFI’s balance sheet.”
  • Cleo (PFM App) raised $80M in capital at a $500M valuation to continue to expand in the US.
  • FalconX (digital asset platform for institutional investors) raised $150M in Series D funding at an $8B valuation – WOWZA!
  • Vergo (business banking platform for architectural, engineering, and construction industry) raised $4.1M in Seed funding.

 
 
Random Uncle Sean Stuff:

• In other news this week - Juul gets smoked as the FDA bans their e-cig vaping products in the United States – WOW!!!  Of course, Juul responded defensively and is seeking a stay against the FDA ban and an appeal.
• Happy Birthday to our very own Dan Heilveil – have a good one buddy!!!!
• And of course a few bad Dad Jokes:
  • While at the restaurant, Aunt Patty said, “I’ll have the chef’s salad” and I whispered to her “that’s a little bit rude, just order your own!”
  • I bought new deodorant and the directions said, “remove top, push up bottom” – and I thought to myself…..  I really just wanted it for my armpits…  😲
  • It takes guts to be an organ donor!
  • Okay last one….
    • Good Morning.  Is this the Helpline for Alcoholics?  How do you make a Mojito? 😊

 
 
Have a GREAT weekend and please 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 & Happy Father’s Day Weekend!!!
 
Quick bragging moment – our weekly newsletter now has 11,250+ subscribers – HOLY COW!!!!  Not bad for only 12 months in full circulation!!!!  Avoid FOMO and sign up here to have the Uncle Sean Update and the FinTech Cowboy interviews delivered straight to your inbox every week.  And now – here is the Uncle Sean Update for 6/17/22:
 

• Shout out to Lineage Bank as the latest community bank to join the BHB Banking-as-a-Service (BaaS) platform!

 

• It’s Fed Week!!!  In a slight pivot from an estimated 50 bps move, although widely expected since the beginning of this week, the FOMC raised interest rates by 75 bps.  The response was, In large part, due to the CPI that came in at 8.6% for May signaling that inflation had not yet peaked.  For the “diehard Fed Superfreaks” like me, you can check out the following:
  • Federal Reserve issues FOMC Statement showing a 75 bps rate increase and quantitative tightening (QT) to remain on track as announced in May (which was $47.5B per month ramping up to $95B per month in Sept).
  • Chairman Powell’s Press Conference Transcript (27 pgs) – note that he mentions the Fed could hike rates by 50 to 75 bps again in July, but will be decided on a meeting by meeting basis.
  • FOMC Summary of Economic Projections (17 pgs) signaling more rate hikes to a median of 3.4% Federal Funds Rate by the end of 2022, 3.8% by the end of 2023, and 3.4% for 2024 (keep in mind that we are now at a benchmark of 1.5% - 1.75% so there is a ways to go). 
    • As always, even though it makes for good press - please remember that the Summary of Economic Projections (SEP) / “dot plot” is not policy or a plan of action, but simply a median of current assumptions based on current economic data as it stands today.  Meaning, the FOMC will pivot as they see necessary based on new data as it comes in.
  • It is worth noting that a 75 bps rate increase is the largest since 1994 (more on that in the Random Uncle Sean Stuff below)…

 

• I watched the stock market this week…  and…  well…  I threw up…  LOL!!!

 

• Frost Bank and Citizens Financial Group (Citizens Bank, N.A.) join the ranks of large FI’s eliminating NSF and overhauling overdraft programs.
  • Frost Bank expands overdraft grace & eliminates NSF fees for consumer banking customers.
  • Citizens announces Citizens Paid Early (early access to direct deposit) and commits to eliminating NSF fees by the end of 2022.

 

• Celsius (crypto lender) freezes withdrawals after a brutal crypto market downturn forced liquidity problems. 
  • Question - How do you stop a Bank Run???  Just tell people “no, you can’t withdraw your funds”…..   Yeah, that should work just fine (sarcasm)….  😲
  • To make matters worse, WSJ is reporting that Celsius has hired restructuring attorneys – yep, this is about to get ugly…  And you can bet the regulators and lawmakers are taking plenty of notes.

 

• C2FO launches CashFlow+ Card allowing businesses to get their receivables paid faster without typical discount fees via direct funding to a Sutton Bank issued Visa card - PLUS a 1% cash back reward on all purchases.
  • I really like this product concept; and those folks over at Sutton Bank continue to do cool things in the business embedded finance / BaaS sponsor arena.

 

• American Express announced the Abra Crypto Card – the first crypto rewards credit card on the American Express network.  

 

• Of course it wouldn’t be a full week without another BNPL mention…..  PayPal extends their BNPL offering by announcing “PayPal Pay Monthly” to give customers a more flexible way to pay instead of having to pay off purchases over six weeks as before – now they can make payments over a 6 - 24 month period….. 
  • Uhh - doesn’t this smell like just a regular credit card to anyone else?  Up to $10K limit, rates up to 29.99% (depending on credit), monthly payment schedule, what am I missing???  Have we gone too far in calling everything a BNPL solution?

 

• VyStar CU and Heritage Bancorporation mutually agree to terminate their merger agreement citing difficulties in obtaining the necessary regulatory approvals in a timely manner.  Per the announcement, “each company will bear its own costs and expenses in connection with the terminated transaction, and that neither party will pay any termination fee as a result of the mutual decision to terminate the purchase agreement.”

 

• Canadian owned VersaBank announced an agreement to acquire Stearns Bank Holdingford, N.A. (FDIC 10160) for USD $13.5M in a bid to obtain a US OCC charter.  The deal provides VersaBank access to US deposits to fund the growth of their Receivable Purchase Program recently launched in the US.  Upon closing, Stearns Bank Holdingford will be renamed VersaBank USA, N.A..
  • Here is a little more about VersaBank’s POS Financing model via Receivables Purchase Program that just entered the US market in March.
  • Note that the BHC, Stearns Financial Services Inc. and the two related banks, Stearns Bank of Upsala, NA (FDIC 9336) and Stearns Bank, NA (FDIC 10988) are NOT part of the merger agreement.

 

• Notable FinTech funding for the week:
  • Kinly (fintech banking app focusing on BIPOC – fka First Boulevard) raised $15M in Series A funding according to Axios (sorry about the paywall).
  • Narmi (digital banking and NAO solution for FI’s) raised $35M in Series B round.
  • Able (AI platform to streamline the commercial loan process for FI’s) exits stealth an announced a $20M Series A funding raise.  Check them out at able.ai.
  • HomeLight (proptech platform) raised $115M in capital consisting of a $60M equity extension of their recent $100M Series D plus $55M in debt financing.  HomeLight also announced the all stock acquisition of Accept.inc in the still red-hot “all-cash offer” arena.

 
 
Random Uncle Sean Stuff:

• HAPPY FATHER’S DAY to all the Dad’s out there getting’ it done!  Now quit loafing around and mow the yard, wash the cars, and grill up some food for everyone!
• I must admit, when I read about 75 bps interest rate hike being the largest since 1994, Uncle Sean immediately took a trip down memory lane:
  • In 1994, I had recently left Sheshunoff and was working at NorthCorp Realty Advisors (actually Crown NorthCorp) as their Cash Accountant in the Contract Department recording cash sweeps and reconciling to financial statements from third-party property management firms.  We were a SAMDA contractor with the RTC and would buy bulk performing asset blocks that had been repossessed (mainly multifamily and CRE).
  • Aunt Patty and I got married that year!  We lived in a tiny rent house near Princeton, TX for $400 per month (had two window units for AC and a propane space heater on the wall for heat).  We had a dog named Cutter.  I had a beat up 1987 GMC S15 pickup with way too many hard miles on it; and Aunt Patty had her infamous navy blue 1982 Pontiac Phoenix LJ hatchback (affectionately named “the turtle”) – a car that we still laugh about today.  LOL  😊

• Shout out to my niece, Laurel Mayo who had a birthday this week – Happy Birthday!!!!  21 again, eh??  Me too Lalo, me too!

• And it would not be a proper sendoff to Father’s Day Weekend without some Dad Jokes:
  • Reaching into a pair of pants and finding money is always a good thing….  Until the person wearing them makes eye contact!!!
  • The #1 surefire way to avoid stress at work is…  Don’t go!
  • One big difference between Mom’s and Dad’s is that if Mom says “smell this” it usually smells nice. 

 
 
Have a GREAT Father’s Day Weekend and please 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!!!
 
It’s HOT outside!!!!  Here is the Uncle Sean Update for 6/10/22:
 

• This week we get a double fist bump for the BaaS Association as great things continue to happen in Bankers Helping Bankers:
  • Five Star Bank joins the BHB Banking-as-a-Service (BaaS) platform as a founding member!!! 
  • Doubling down, is Coastal Community Bank announcing that they have also joined the newly launched BaaS Association as a founding member!!!

 

• I’m sure you saw this everywhere this week like I did, so I’ll keep this short and on point…  At their Worldwide Developers Conference, Apple announced the launch of their Apple Pay Later BNPL product.  CNBC has a really good summary.  No real surprise as we have been tracking this since last July.  However, there are a couple of new developments worth noting:
  • This is a function of Mastercard Installments and Goldman Sachs is the BIN sponsor; although Apple Financing, LLC will do the underwriting, approval, and hold the receivables.
  • Apple Pay Later is merchant agnostic meaning there is no need for ANY integrations as long as the merchant accepts Apple Pay (already accepted at over 90% of US retailers; and it is estimated that there are well over 100M iPhones in the US).
  • Could this be the “Klarna Killer” from a merchant agnostic perspective?  Will this dilute Square’s (Block) $29B acquisition of AfterPay as an ecosystem play?  Time will tell, but Apple certainly has the reach…

 

• Locality Bank announces a partnership with Hurdlr, an API based solution for Locality Bank’s business customers to seamlessly and “automatically track expenses, income streams, and tax deductions for accounting purposes.” 

 

• More banks announce changes to overdraft / NSF:
  • Flagstar Bank (FDIC 32541, NYSE: FBC, Total Assets $23B) revamps overdraft program to eliminate NSF and other OD changes beginning Aug 1, 2022.
  • New York Community Bank (FDIC 16022, NYSE: NYCB, Total Assets $61B) announced plans to eliminate NSF and restructure OD beginning Aug 1, 2022.  NYCB will also launch Early Pay in 3Q to allow customers to access their direct deposit up to two days early.

 

• Custodia Bank (fka Avanti), a Wyoming SPDI for digital assets / crypto, is suing the Federal Reserve for delays (19 months) in processing their master account request.

 

• PayPal announced that their users can now transfer, send, and receive crypto between PayPal and other wallets and exchanges.  Basically, this allows PayPal customers to:
  • Transfer supported coins into PayPal.
  • Move crypto from PayPal to external crypto addresses including exchanges and hardware wallets.
  • Send crypto to family and friends on PayPal in seconds, with no fees or network charges to send or receive.

 

• The FTC released a Data Spotlight on crypto fraud losses to consumers based on scams totaling $1B since the beginning of 2021 through March 2022; and is accelerating rapidly:
  • $680M total for all 2021 plus another $329M in 1Q2022….  That’s not good…

 

• So, this got interesting rather quickly….  Edge announced the launch of the Edge Crypto Mastercard allegedly without any identification or KYC (wait, what???)…  However, there seemed to be little bit of confusion and a Blog update on the Edge website states that the Edge Card has been temporarily removed “and the use of the card inside of our app has been temporarily disabled.”
  • In my best Ace Ventura voice, Alrighty Then!!!!  😲

 

• Railsbank changes their name to Railsr.

 

• SEC Chairman, Gary Gensler, is looking to overhaul Payment For Order Flow (PFOF).  While many firms have been quietly looking for alternatives, Robinhood looks as if they may be positioning for a fight.  “It is a really good climate for retail. To go in and muck with it right now, to me, is a little worrisome,” said Dan Gallagher (Robinhood Chief Legal Counsel) at the same industry conference Wednesday.

 

• Shout out to Michigan as they will soon be the 14th state to mandate personal finance education at the high school level as a graduation requirement – a concept that Uncle Sean is greatly in favor of!!!!

 

• Notable FinTech funding for the week:
  • Middesk (B2B Identity-as-a-Service API in the smoking red hot identity verification / KYC / KYB space) raised $57M in Series B funding round.
  • Branch (insurtech platform) raised $147M in Series C funding at a $1.05B valuation.
  • Ivella (banking app for couples) raised $3.5M in capital.
  • Finch (API platform for connecting to corporate payroll, HR, and benefits systems) raised $15M in Series A funding round - connects to corporate payroll, HR, and benefits systems $15M in Series A funding round.
  • Proper (fintech sub-ledgering platform) raised $4.3M in Seed round.
  • SecureSave (workplace emergency savings account ESA platform) raised $11M in capital.  If this sounds familiar, it is – a few weeks back we highlighted Transamerica Workplace Emergency Savings Account to which SecureSave was one of the providers.
  • Summer (second home ownership platform featuring financing, rent while you are away, and property management) raised $13.4M in Seed funding $13.4M in Seed funding.
  • Fruitful (financial wellness membership platform) emerges from stealth with raised $33M in equity financing consisting of Seed plus Series A.

 
 
Random Uncle Sean Stuff:

• It’s a little warm here in Austin – expecting 104 today, 107 on Saturday, and 106 on Sunday – WHEW!!!
• I am cooking this recipe in my slow cooker right now for me and Aunt Patty today (if it tastes as good as it smells, this will be a hit) - slow cooker shrimp boil.  Couple of quick notes:
  • I added a small bag of Louisiana brand shrimp / crab boil (boil in bag).  I upped the water from 2 cups to 5 (needed more to cover everything).  I added fresh green beans for a twist.  Also used an extra ½ lb of shrimp and doubled up on the red potatoes and onion.
  • I think the above proves that Uncle Sean has a very difficult time following basic instructions  – LOL!!!!
• Okay – here are a couple of quick Dad Jokes to get you into the weekend vibe:
  • So I was at the store trying on some new shoes and I told the guy helping me that they were a little too tight.  He said, “try loosening the tongue up.”  And so I said, “It’th nho ghood, it’th thtill thoo thight.”  😊  
  • What do sprinters eat before a race? Nothing, they fast!  Hehehehehe!!!!

 
 
Have a GREAT weekend and please 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!!!
 
Welcome to June – I know, I can’t believe it either!!!  Short holiday weeks are always crazy as we try to cram our ordinary full hectic work week into 4 days while also wondering how it is possible for a three day weekend to go by at the speed of light, so let’s get to it.  Here is the Uncle Sean Update for 6/3/22:
 

• Okay – Uncle Sean goes “off the rails” here on FinTech valuation metrics and the market downturn.  As an old gray-haired finance superfreak, I feel marginally qualified to expand on this (insert the Farmers Insurance mantra – “we know a thing or two, because we’ve seen a thing or two” LOL)…
  • Plenty of folks saw the a16z chart being passed around recently showing in graphic form (pun intended because it is a train wreck) FinTech multiples getting crushed from a high of 25X just last October to about 4X in May ’22 - that’ll make anyone squirm!  However, there is so much more to that story.  Please do yourself a favor (especially if you are dependent on additional outside funding for cash flow) and read the a16z article, A Framework for Navigating Down Markets (and yes, it’s the one with the terrifying FinTech multiples graph).  It gives solid advice on managing to your cash flow; knowing your valuations; and gentle reminders about timing including the cautionary tale of keeping plenty of dry powder on hand - “raising capital with less than 12 months of runway sends a negative signal to the market and makes it harder to have a good fundraise.” 
    • Massively important for everyone, not just FinTech, as we navigate somewhat turbulent waters going forward with continuing pressures surrounding the “R” word (rhymes with “procession”).  😊
  • Now on to the rest of the Uncle Sean Update:

 

• Affirm (BNPL platform, Nasdaq: AFRM) announced a strategic partnership with Stripe enabling Affirm’s Adaptive Checkout™ to be available to Stripe users in the U.S. for BNPL option at checkout.
  • Pretty cool, but you already knew that if you were checking out Stripe Sessions 2022 last week that highlighted global BNPL agreements with Afterpay, Klarna, and Affirm (listed as coming soon) – including how to choose a BNPL provider.

 

• And as the BNPL wars continue to heat up, Klarna announced the official launch of the Klarna Card in the U.S. (touting an existing waitlist of 1M U.S. customers) enabling consumers to “Pay in 4” for any store or online purchase without the need for merchant signup.  The Klarna Card is a Visa card issued by WebBank and powered by Marqeta's modern card issuing platform.
  • A little more digging…  Free for the first year, then $3.99 per month to keep your card active.  Interest free payments are made every other Friday with nothing up front.  Soft credit pull with one of the requirements being you must have purchased through Klarna at least once and paid on time.  Attach your debit card as a funding source and enroll in Autopay or make payments manually every 2nd Friday.  Late fees apply in the event of missed payments (think consumer charge / payment card with 60 day terms).

 

• Webster Bank makes headlines again this week as the exclusive bank partner for Save's Market Savings Program.

 

• Some very exciting personnel movements this week:
  • Former PayPal Ventures exec, Peggy Mangot joins JPMorgan Chase as Head of FinTech Partnerships, Commercial Banking.
  • Former Visa Payments exec, Shawn Sinner joins MOCA Financial as President and Chief Revenue Officer.

 

• Couple of CU acquisitions of banks this week (and both were in Illinois):
  • NuMark Credit Union (Charter 61447; $624M Total Assets) announced an agreement to acquire Pioneer State Bank (FDIC 11726; $135M Total Assets).
  • Credit Union 1 (Charter 68727; $1.2B Total Assets) also announced an agreement this week to acquire NorthSide Community Bank (FDIC 34416; $312M Total Assets).
    • This marks 9 such acquisitions of a bank by a CU so far for the year.  This compares to 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• Fundbox (working capital platform for small businesses) announced the launch of the Fundbox Flex Visa Debit Card issued by Pathward, N.A. (fka MetaBank who recently sold their naming rights to Facebook – err, I mean Meta, for a cool $60M).  Fundbox and Visa are also working on a BNPL option; and a push-to-card capability for instant funding via Visa Direct.

 

• Tillful announced the launch of the Tillful Card for small businesses to build credit via a secured card that reports to Experian (with plans to add Dun & Bradstreet and Equifax soon).  The card is a Mastercard issued by Sutton Bank and powered by Highnote.

 

• Notable FinTech funding for the week:
  • Onramp Funds (SMB e-commerce sales-based financing platform) raised $42M in capital.
  • Binance Labs announced a $500M Fund to invest in Web3 and blockchain.
  • Clear Street (modern infrastructure for capital markets) raised $165M in Series B funding round at a $1.7B valuation.  Since 2021, “Clear Street experienced a 220% increase in financing balances, and 510% growth in equity transactional volume. Today, Clear Street’s architecture processes more than $3 billion in daily trading volume.”
  • Setpoint (modern embedded RE proptech platform) emerges from stealth with $615M in debt capital to enable other proptech firms to offer their customers a frictionless home buying and selling options by powering “the ‘Buy with Cash’ and ‘Buy Before You Sell’ purchasing options that are trademarks of alternative real estate models, including ‘Power Buying’, ‘iBuying’, ‘Fractional Ownership’, and others.”
  • Tandym (private label card platform for smaller e-commerce retailers) launches with $60M in Seed funding.
  • Constrafor (construction finance and management platform for contractors) raised $106.3M in capital consisting of $100M in credit and $6.3M add-on from a June equity round that wasn’t previously disclosed.  Their main finance product is the Early Pay Program, which is akin to invoice financing, but this TechCrunch article references the company is “working on a beta program to provide a virtual bank account for contractors, via Stripe, that would include credit cards.”  Check them out at Constrafor.

 
 
Random Uncle Sean Stuff:

• Memorial Day Weekend at Tanner’s house was an absolute blast!  After several years of quarantine, lockdowns, and isolation, it was very nice to spend time with family and friends; and the fish fry was stellar.  On Monday, we went to the movie theater and watched, “Top Gun: Maverick” – definitely on the must see list!!!
• Queen Elizabeth’s Platinum Jubilee celebrations commence this week and tributes pour in from leaders all over the world.  The New York Times has some great pics.
• And here it is, the moment you have been waiting for – DAD JOKES:
  • I enjoy bacon so much that sometimes I eat it several times per day.  It helps me take my mind off of these terrible chest pains I keep having.  LOL
  • I once worked at a scaffolding company, but they couldn’t put up with me……
  • If life gives you melons, you might be dyslexic….
  • I prefer to die peacefully in my sleep like my Grandpa…  Not screaming and yelling like the passengers in his car.  😝

 
 
Have a GREAT weekend and please 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!!!
 
Wishing everyone a very Happy Memorial Day!  Trying to keep this one short and quick as we are cooking up some hamburgers and homemade onion rings this afternoon (don’t tell my boss I’m playing hooky - LOL)!  Here is the Uncle Sean Update for 5/27/22:
 

• Very excited to share that Webster Bank has joined the BHB Banking-as-a-Service (BaaS) Association as a founding member!!!  Great things continue to pour out of the Bankers Helping Bankers (BHB) platform every week!

 

• Stipe expands their middleware / open API functionality by launching Stripe App Marketplace - “now in beta testing (and is free), is launching with more than 50 apps from leading providers like DocuSign, Dropbox, Intercom, Mailchimp, Ramp and Xero.  The apps span everything from accounting, analytics, CRM, eSignature to marketing” with more being added over time.

 

• M1 has selected Thought Machine's Vault Core product with real-time ledger to power M1’s banking products and accounts. 
  • I’m interested to see how this plays into M1’s overall strategy with First National Bank of Buhl as the potential / eventual sponsor bank (reference - So... I bought a bank by Brian Barnes, CEO and Founder of M1).

 

• Synapse launched Global Cash - a BaaS service enabling FinTech companies abroad to quickly and easily implement a U.S. banking solution in over 35 countries consisting of “debit cards, bank-to-bank transfers, virtual account numbers for direct debit and direct credit, bill-pay, ATM access, and domestic and international transfers.”
  • Early customers include Nomad and Utoppia.  Worth noting that Synapse primary sponsor bank is Evolve Bank & Trust.

 

• Bank of America announced they are raising their US minimum wage to $22 per hour by the end of June as part of their existing commitment made last year to pay at least $25 per hour by 2025.

 

• Acting Comptroller of the OCC, Michael Hsu, gave some straight forward and rather harsh comments this week during his speech at the DC Blockchain Summit 2022 titled, “Crypto: A Call to Reset and Recalibrate.”  Not completely surprising as he has been a vocal crypto skeptic.  Here are a few key points from his speech providing a regulator’s perspective:
  • The crypto economy is dependent upon “hype” and unsustainably high yields – leading to bubbles.  Hsu went on to add, “There seems to be growing acknowledgement that yield farming today may have more in common with Ponzi schemes than with productive innovation.”  OUCH!!!  😲
  • The “crypto ecosystem is “highly fragmented and prone to hacks” with new blockchains being added daily (and the vulnerability of cross-chain bridges required for interoperability).
  • “Contagion risks are real” as was evident in the recent collapse of TerraUSD spreading contagion to the largest stablecoin, Tether, and to the broader crypto ecosystem.
  • “Custody and ownership rights are still underdeveloped” citing Coinbase’s recent regulatory filing stating that in a bankruptcy event, its users would be at risk of becoming unsecured creditors.
    • Still chuckling a little from the “Ponzi scheme” reference, Uncle Sean can’t help but wonder – do you think he’ll be invited back to speak at the DC Blockchain Summit again next year???  LOL!!!!

 

• Meanwhile, per the Federal Reserve request for comment, multiple industry associations weigh in opposing a U.S. Central Bank Digital Currency (CBDC).
  • ICBA opposes CBDC
  • ABA says No Compelling Case for US CBDC Today
  • CUNA and NAFCU also express their reservations
  • And don’t get in a hurry even if congress does act to pass legislation to issue a CBDC…  Federal Reserve Vice Chair Lael Brainard stated that a Fed issued CBDC “could take five years to put in place the requisite security features…”

 

• The FDIC released March 2022 Quarterly Banking Profile report.  Key points include:
  • Net Income declined YoY – mostly due to large credit reserve releases last year and current increases in noninterest expense (G&A).  Allowance for Credit Losses as a percentage of total loans and leases is down 44 bps from last year to 1.54%, but the big banks are starting to increase reserves again amongst macroeconomic concerns.
  • Net Interest Margin (NIM) remained flat despite an increase in Net Interest Income due to loan growth of 4.9% over last year (the increase in average earning assets offset the rise in rate spread).
  • Credit Card receivables are up 11.8% YoY.
  • Only 40 banks on the “Problem Bank List” which is down from 44 last quarter.  This is the lowest number of problem banks since QBP data collection began in 1984.

 

• Klarna (BNPL) plans to lay off about 10% of their employees.  This news comes after The Wall Street Journal (paywall blocked – sorry) reported that Klarna was seeking to raise up to $1B in a down round lowering their valuation from $46B last year to approximately $30B.
  • Also announced last week - Klarna hits 150M users and 400,000 merchants.  If this is a game of scale, Uncle Sean is curious - just exactly how many customers do you need to become profitable???

 

• Bolt (online checkout OS) also just laid off 1/3rd of their workforce.

 

• Notable FinTech funding for the week:
  • Andreesen Horowitz closed on their latest crypto fund (as expected) and it’s a doozy!  The new $4.5B Fund is their fourth and largest such fund for crypto and blockchain investments bringing the total raised in the asset class to $7.6B.
  • equipifi (white label BNPL solution for banks and CUs) raised $12M in Series A funding round.
  • Belong (RE proptech platform) $80M in Capital consisting of $50M equity funding and $30M debt.
  • Caribou (automobile lending and insurance solution) raised $115M in Series C funding round at a $1.1B valuation
  • Stable (commodity hedging platform with a focus on agri-food) raised $60M in Series B round.

 
 
Random Uncle Sean Stuff:

• Don’t forget that the reason for our Memorial Day holiday is to remember and honor our veterans that paid the ultimate price.  So please spend extra time with family, friends, and loved ones this holiday weekend as we are continually reminded that life can be fleeting – live, love, smile, and laugh often!!!!  😊
• Aunt Patty and I are headed over to Tanner’s this weekend to enjoy some much needed family time and Memorial Day shenanigans - woohoo!!!!

 
 
Have a GREAT Memorial Day weekend and please 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!!!
 
Fintech, Banking, Data – it’s in our DNA.  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox each week.  Here is the Uncle Sean Update for 5/20/22:
 

• Tons of great things happening in Bankers Helping Bankers this week; and I am very excited to give some virtual high fives to these great firms (with tremendous employees):
  • Unifimoney, a turn-key multi-asset digital wealth management platform for community banks and credit unions, shows their dedication to community banking by partnering with the Banking Helping Bankers platform.  Special thank you to Ben Soppitt and the entire Unifimoney Team for supporting BHB!!!
  • Travillian, a nationally focused executive search, strategy and talent advisory boutique dedicated to the financial services industry, becomes the latest to join the BHB BaaS Association as the go-to talent advisory partner with the Association.  High five to Brian Love, Keith Daly and the Travillian Team!!!

 

• Congratulations to Agility Bank as the nation’s latest de novo digital bank!!!!  Agility Bank announced that they have received all approvals to open as an OCC Minority Depository Institution (MDI) charter.  Agility Bank opens on Monday, May 23rd – GREAT job to Lauren Sparks (100% legit Rock Star) and the entire Agility Bank Team!

 

• Curt Queyrouze joins Coastal Community Bank as President.  Coastal Community Bank is a leading sponsor bank in the U.S. through Coastal’s CCBX BaaS / FinTech division.
  • Uncle Sean is very excited to see what Eric Sprink and Curt Queyrouze accomplish together!!!

 

• Ponce Bank (NASDAQ: PDLB) disclosed a $6.3M write-off and $1.7M in additional reserves in their 1Q2022 Earnings Announcement “relating to the Bank’s lending relationship with Grain Technologies, Inc. (‘Grain’)” fintech sponsorship…..  OUCH!!!!  😲
  • In a May 5th 8-K filing, Ponce stated that Grain "has been victimized by cyber fraud using synthetic and other forms of fraudulent identifications, a phenomenon that has become prevalent with FinTechs."  The filing also states that “Grain originates and services these microloans and is responsible for maintaining compliance with the Bank's origination and servicing standards, as well as applicable regulatory and legal requirements.”
    • Also disclosed in the 8-K is a pending lawsuit where Grain has sued a third party vendor for the fraudulent loan originations due to “synthetic identifications that Grain’s vendor failed to identify.”  Oops!!!
  • In total, 24,719 microloans amounting to $17M have been deemed to be fraudulent.  $11.8M remain outstanding as of March 31, but Ponce write off roughly $6.3M and provided additional reserves of $1.7M after applying a $1.6 million security deposit set-off, leaving a net balance of $2.2 million at March 31.  Ponce also maintains a $1M equity investment in Grain.
  • As stated in the 8-K, Grain intends to make Ponce whole upon completion of a Series A (yeah – just what a VC wants to hear), but Ponce also acknowledges that Grain “remains a pre-profit startup” and that further capital raises “may not materialize.”

 

• Transamerica launches Workplace Emergency Savings Accounts (ESA) for employers as an employee benefit.  It’s a savings DDA that can be funded via paycheck deductions as well as employer contributions via Millennium Trust Company and / or SecureSave (custodial savings account held at Wells Fargo).

 

• Greenlight (teen and family banking app) is launching their Family Cash Card a Mastercard credit card issued by First National Bank of Omaha (FNBO).  A little more digging shows us that the Greenlight Family Cash Card was a product of Marqeta’s modern credit card platform in partnership with FNBO – very cool!
  • Rewards on the Family Cash Card credit card range from 1% - 3% based on spend and can be returned in cash or auto-invested in a range of stocks and/or ETF’s in the app (Greenlight is partnered with DriveWealth on the RIA / SIPC side).

 

• Speaking of….  Marqeta (Nasdaq: MQ) announced this week the addition of Evolve Bank & Trust as Bank Partner to expand Marqeta’s program management capabilities.  As one of the premier sponsor banks and BaaS provider in the U.S., Evolve Bank & Trust will “support the full range of Marqeta’s program management capabilities, including BIN management, on-demand fulfillment, compliance reporting, and settlement services.”
  • However, if you were looking closely, you saw this mentioned last week as part of Marqeta’s 1Q2022 earnings announcement showing strong continued growth and impressive 2Q2022 guidance.

 

• Plaid had a busy week announcing the launch of Data Connectivity solutions (Core Exchange and Plaid Exchange) as well as Identity Verification (IDV) KYC and Monitor for AML and PEP.  Plaid Identity Verification and Plaid Monitor combined allows for a full-stack customer onboarding experience.
  • TechCrunch has a good summary here focusing on Plaid’s move towards identity and income verification, fraud prevention, and account funding – with specific reference to their recent $250M acquisition of Cognito.

 

• FTX (crypto exchange) has been busy as well lately.  FTX US announced an expansion beyond crypto to allow customers trade and invest in hundreds of US stocks and ETF’s by launching FTX Stocks - a free, no-fee, no payment for order flow (PFOF) platform.  Just last week, FTX US applied for New York State trust charter; and don’t forget about FTX CEO, Sam Bankman-Fried, recently acquired 7.6% of Robinhood outstanding shares which certainly raised a lot of eyebrows.
  • By the way, have you seen the FTX US Debit Card (Visa debit card issued by Evolve Bank & Trust)?

 

• The Federal Reserve finalized a rule that will allow banks to delay FedNow instant payments to prevent fraud. 
  • As Tanner Mayo consistently points out, real-time settlements introduce real-time fraud risks.  Let’s hope that over time, the FedNow service enhances fraud prevention tools.

 

• CNBC announced their 10th annual Disrupter 50 list with many familiar names.

 

• Notable FinTech funding for the week:
  • Unit (fintech BaaS) raised $100M in Series C funding round at a $1.2B valuation.  “Unit has seen its transaction volume grow by 7x over the last six months. The startup has crossed an annualized transaction volume of $2.6 billion, issued over 430,000 cards to over 330,000 customers and saw a 10x increase in deposit volumes.”
  • Thought Machine (core banking technology) $160M in Series D round at a $2.7B valuation less than six months after their $200M Series C at a $1B+ valuation.
  • GravyStack (Teen banking and financial literacy app) raised $5.2M in Seed funding.
  • CertifID (wire fraud prevention and recovery) raised $12.5M in Series A funding round.  This company is exciting to me as they target law firms and title companies to protect them from wire fraud during mortgage payoffs, CRE transactions; as well as a fraud recovery service.  Check them out at certifid.com.
  • Keep Financial (employee retention platform) emerged from stealth and announced $9M Seed Round to accelerate their vesting cash plan as an employer retention benefit.  Think of this as 0% employee loans that are forgiven over a period of time / vesting schedule – thus the retention benefit.
  • SpotOn (POS software and payments solution for restaurants, retail, and enterprise venues) raised $300M in Series F funding round at a $3.6B valuation just 8 months after their Series E.
  • Velocity Global (global employment solution to simplify how companies onboard, pay, and manage talent) raised a whopping $400M in Series B increasing their valuation 7x over last year.

 
 
Random Uncle Sean Stuff:

• Now we have Monkeypox…???  Seriously, can we not catch a break???  Somehow, my mind immediately references The Wizard of Oz and those creepy flying monkeys…  😲  Ahhh yes, the classic movie musical that has been traumatizing children for over 80 years – LOL!!!!
• Okay – time for some Dad Jokes to kick off the weekend!!!!
  • If anyone knows Phillip, tell him I have a bunch of his screwdrivers.
  • While at the Optometrist, the doctor came in and said my results were ready.  I asked, “can I see them?”  He replied, “probably not.”  😃
  • Turns out that a monkey cannot in fact do my job.  Long story short, he got us both fired!!!
  • After receiving my blood work results, I texted Aunt Patty and told her “I’m at risk for diabetes type 1”….  And she texted back “1”…..  Touché Aunt Patty!!!  😊
  • The fear of giants is called feefiphobia.

 
 
Have a GREAT weekend and please 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!!!
 
Oooh – It’s Friday the 13th!!!!  Watch out for black cats, broken mirrors, and don’t walk underneath any ladders – we’ve had enough bad luck this week called the Dow, Nasdaq, Crypto, and S&P!  Here is the Uncle Sean Update for 5/13/22:
 

• Things in the crypto world got really interesting this week….
  • We saw an unprecedented meltdown of Terra’s UST/Luna this week.  There is a lot more to this and I won’t even pretend to cover all of it (CNET also has a good summary), but here are the basics:
    • The TerraUSD Stablecoin UST (an algorithmic stablecoin NOT to be confused with Tether USDT) as a “stablecoin”, should be pegged to the U.S. Dollar on a 1:1 basis, but fell to a low of $0.12 Friday morning - akin to a bank run (yeah – I said it), liquidity became the primary concern in a hurry.  The related LUNA cryptocurrency also fell from $80 to $0 (yes, zero) during the week.  This sent shockwaves through the rest of the crypto markets (systemic risk, anyone???), but other leading stablecoins such as Tether USDT, recovered quickly.
  • Coinbase had a rough week citing 1Q2022 results showing declining users, declining trading volume, huge decrease in trading revenues, and a big quarterly loss of $430M.  But that’s not the story.  Embedded in their regulatory filing is a reminder that if a bankruptcy were to occur, customers could lose all of their holdings (see paragraph 1 on page 83 of the Coinbase 10Q).  Ugh – I know it’s a new SEC disclosure requirement (ref SAB 121), but tough timing for that kind of messaging on the heels of a rough Q1 earnings report while the stock is down 70% YTD; and experiencing major outages as crypto prices plunge (along with the rest of the markets to be completely fair). 
    • But YES, this is what happens when the company is not FDIC or SIPC insured, your entire investment including principal is at risk and individuals may likely become unsecured creditors in a bankruptcy case.  No real immediate concerns of BK for Coinbase specifically, but it shines more light onto the fact that this industry needs regulatory involvement for ordinary investor protections – sooner rather than later.
  • No coincidence, Treasury Secretary Janet Yellen told congress to act quickly to pass legislation to regulate stablecoins referencing Terra UST and Tether USDT as a warning.  Yellen stated, “They present the same kind of risks that we have known for centuries in connection with bank runs.”

 

• Solo Funds gets cease-and-desist order from Connecticut Department of Banking stating that all of the loans made to Connecticut residents from June 2018 – August 2021 contained a “tip” bumping the effective APR for the micro-loans from 43% - 4,280%.

 

• Qoins (PFM app to pay down consumer debt) partners with Bond infrastructure platform to launch the Qoins Debit Card (a Visa Prepaid GPR issued by Evolve Bank & Trust) in less than four weeks.

 

• Visa curates pool of BNPL Partners for issuers.

 

• ConnectOne Bank announced a partnership with Nymbus to launch “niche-based vertical” digital banking solution (i.e. direct digital bank) by year-end 2022.

 

• And another Credit Union buying a bank…  DFCU Financial (Charter 61844; $6.4B Total Assets) is acquiring First Citrus Bank (FDIC 34899; $689M Total Assets), BHC is First Citrus Bancorporation, Inc. (FR 3547841).
  • For those keeping score, this is the 7th CU acquisition of a bank YTD for 2022 compared to 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis).

 

• FIS announces embedded finance offering developed in partnership with Treasury Prime making it easier for small and mid-sized financial institutions on FIS core to become sponsor banks by via FIS API.

 

• Visa’s global head of fintech and crypto, Terry Angelos is leaving to become the new CEO of DriveWealth the brokerage infrastructure firm powering investing apps such as Unifimoney, Cash App, Douugh, and others.

 

• NYDIG announces partnership with Jack Henry to allow Jack Henry Banno FI’s to provide bitcoin services (buy-hold-sell) for consumer and business accounts.

 

• Hanover Bancorp had their IPO this week at $21 per share raising approximately $27M under the Nasdaq symbol HNVR. 

 

• Instacart announced they have confidentially filed a S-1 draft registration statement with the SEC for a potential IPO.

 

• Notable FinTech funding for the week:
  • Deserve (credit card platform ) secures a new $250M credit facility after experiencing 650% growth in transaction volume and 800% growth in receivables in 2021.
  • Chainalysis (blockchain analysis and tracking firm) raised $170M in Series F funding round at a $8.6B valuation.
  • Talos (crypto trading platform) raised $105M in Series B round at a 1.25B valuation.
  • Cushion (credit card and bank fee negotiation company) raised $12M in Series A funding readying for their bill pay solution for 100,000 current customers plus an additional six-figure waitlist. 
  • Ness (health-based credit card rewards app) raised $15.5M in Seed funding. 
  • Altro (credit builder based on existing subscription payments) raised $18M in Series A funding round.
  • TIFIN (AI wealth mgmt) raised $109M in Series D at a $842M valuation.

 
 
Random Uncle Sean Stuff:

• You HAVE to see this – In Dolni Morava, Czech Republic, the world’s longest pedestrian suspension bridge is now open.  WOW – not even going to lie, those pics made me dizzy and gave me butterflies!!!!  I can hear Aunt Patty now saying, “oh hell no!!!”  LOL!!!  😲
• I am at that age now when I have to select my year of birth online, it’s like a big spin on the Price is Right wheel waiting, waiting, and waiting for my number to come up…
• Gonna have to start taking Dramamine to deal with these stock market swings.  WHEW, what a crazy week.
• Deep thought from Uncle Sean…  Always remember that you are unique….  Just like everyone else!  😊

 
 
Have a GREAT weekend and please 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!!!
 
Wishing an extra special Happy Mother’s Day to all the Mom’s out there – hope you all have a wonderful day!  Don’t forget to sign up here to have the Uncle Sean Update delivered straight to your inbox each week.  Here is the Uncle Sean Update for 5/6/22:
 

• Check it out!!!!  The newly announced BHB BaaS Association is now open for membership registration for Member (BaaS banks) as well as Affiliate Member (non-BaaS banks, fintechs, and vendors).  For more info, head on over to BHB BaaS Association homepage.  

 

• Speaking of Bankers Helping Bankers, HUGE shout out to Sarah Fankhauser and Data Center Inc. (DCI) for sponsoring the Bankers Helping Bankers platform and supporting community banking across the U.S. – this is how we win in community banking!!!

 

• It’s Fed Week!!!!  Not since the beginning of the pandemic has there been this much anticipation to an FOMC meeting.  Although, I must confess – I’m not sure why….  Chairman Powell has been incredibly transparent (as always) scripting out that a 50 bps hike was probably in order; as well as general consensus surrounding a $95B reduction ($60B in Treasury Securities and $35B in Agency MBS) in the Fed Balance Sheet – i.e. quantitative tightening (QT) per the March FOMC minutes and in many interviews thereafter.  Well guess what, that’s exactly what they did with a three month phase-in of the quantitative tightening.  I know – shocking, right???
  • If you like to get your “Inner Fed freak on” (like me 😊), you can check out the FOMC Statement, the plan for reducing the Fed Balance Sheet (QT), Chairman Powell’s Opening Statement transcript (24 pages), and the Press Conference Video (47 minutes).  Key takeaways include:
    • 50 bps raise in rates plus Initial quantitative tightening (QT) of $30B in Treasury Securities plus $17.5B in Agency MBS beginning June 1; and doubling to $60B in Treasury Securities and $35B in Agency MBS after three months.
    • Russia’s invasion of Ukraine and Covid lockdown in China will continue to pressure energy prices and supply chain constraints respectively.
    • 50 bps increases will be on the table going forward at the next couple of FOMC meetings, assuming economic conditions come in as expected.

 

• Truist (FDIC 9846, Total Assets $530B) acquired Long Game, a pioneer in the mobile savings gamification app space.  Pricing was not disclosed, but Truist did mention that Long Game was complimentary to Truist Momentum, a workplace financial wellness program.

 

• Intercontinental Exchange, Inc. (NYSE: ICE) announced an agreement to acquire Black Knight, Inc. (NYSE: BKI) for $13.1B in a mixed deal of cash and stock.  This is big news in the world of financial institutions and mortgage servicing as Black Knight is arguably the largest Mortgage Servicing Platform (MSP) in the nation.  During a conversation with our own Bobby Button, he reminded me that Ellie Mae was also acquired by ICE back in 2020; and noted that this is a HUGE roll up of both Ellie Mae and Black Knight under ICE.
  • Of course Uncle Sean would not miss an opportunity to dig into the ICE / BKI Investor Presentation by ICE showing +4B TAM expansion, accretive to adjusted EPS in year 1, and synergies of $325M per year – very cool!

 

• First Internet Bank (FDIC 34607; Nasdaq: INBK) announced that First Century Bank, N.A. (FDIC 57123 and FinTech Sponsor Bank) has terminated the merger agreement between the two companies quoting an inability to “arrive at a mutually agreeable increased purchase price in exchange for an extension” by the previously agreed upon consummation date of April 30 despite having received approval from the Federal Reserve on April 29.

 

• We originally covered this lawsuit late last year – now H&R Block wins preliminary injunction against Jack Dorsey's Block.  Judge Nanette K. Laughrey ordered Block Inc., which rebranded from Square last December, not use its new name in connection with its Cash App Taxes services and that app’s green square logo.  Additionally, Block Inc. can’t communicate through advertising, press releases or social media that it is connected to the service, the judge said.

 

• The SEC doubles down….  The SEC announced this week the allocation of 20 additional positions to their Crypto Assets and Cyber Unit bringing the total to 50 dedicated positions focused on investigating securities law violations related to:
  • Crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralized finance ("DeFi") platforms, non-fungible tokens ("NFTs"), and stablecoins.  Also including additional emphasis on adequate cybersecurity controls and required disclose of cyber-related risks and incidents.

 

• Affirm (BNPL provider, Nasdaq: AFRM) partners with Fiserv to allow Fiserv business customers using the Carat operating system to easily integrate a BNPL option at checkout later this year.

 

• Stripe launches Financial Connections allowing Stripe’s customers a way to connect directly to their customer’s bank accounts utilizing MX and Finicity; and immediately drew the ire of Zach Perret, CEO of Plaid, the market leader in consumer bank account connectivity and former partner to Stripe.  Zach Perret originally tweeted: “Wow! Jay, you took interviews with Plaid & asked probing questions multiple times over the past few years, and your team sent repeated RFP’s (under NDA!) to us asking for tons of detailed data. I wish y’all the best with these products, but surprising to see the methods.”  😲
  • The original tweet by Zach Perret was deleted and replaced with “Deleted tweet. Misunderstanding or different styles perhaps. Presuming positive intent.”  And subsequently tweeted “Next take: Welcome to the fintech party, @stripe”
  • Ahhh… The joys of Twitter….  LOL!

 

• The Independent Community Bankers of America (ICBA) released their legislative and regulatory policy objectives for 2022.

 

• Notable FinTech funding for the week:
  • Point (home equity investment platform) raised $115M in Series C funding round.
  • Concerto (a new and holistic approach to risk for credit card brands) raised $21.2M in Capital to expand co-branded credit card platforms to more brands.
  • Argent (non-custodial Ethereum mobile crypto wallet) raised $40M in Series B to make digital wallets easier to use and more secure.
  • Traceable AI (cybersecurity platform to protect API’s) raised $60M in Series B funding round at a $450M valuation.
  • Line (alt-lending subscription platform for underserved consumer short-term credit availability) raised $25M in Equity and Debt financing with 600,000 people registering since last summer for the interest free, no credit check platform.
  • Possible Finance (alt-lending installment platform) raised $20M in Equity financing with plans to launch the Possible Credit Card - a small dollar limit unsecured CC with no interest and no late fees issued by Coastal Community Bank.  Possible focuses on underserved consumers and “has provided over 1.65 million small-dollar loans to over half a million customers since 2019.”
  • Lev (digital CRE lending platform) raised $170M in Capital consisting of $70M in Series B and $100M in debt financing.  Valuation was not disclosed but the company has closed nearly $1B in CRE mortgages in 2021 and grown 10x year-over-year.
  • Walnut (healthcare POS installment lender) raised $110M in Capital comprised of $10M in Series A and $100M debt financing.

 
 
Random Uncle Sean Stuff:

• HAPPY MOTHER’S DAY – it’s actually Mother’s Weekend according to Aunt Patty (and is very close to evolving into Mother’s WeeK), and Uncle Sean agrees!!!! 😊 

• Happy Cinco De Mayo!!!  Here’s some history on Cinco de Mayo – note that it is NOT Mexican Independence Day; and has grown as a huge celebration of Hispanic heritage particularly here in Texas.  Plus it gives Uncle Sean a great excuse to drink some margarita’s!!!
• I can’t even call these Dad Jokes this week because these are mostly true for me, so enjoy:
  • Am I the only one who gets borderline delusional when they rearrange the grocery store?  It’s like my entire world gets turned upside down and I don’t even know who I am anymore – LOL!!!!
  • I’ve been practicing resistance training by refusing to go to the gym.
  • I was watching this TV show about explosives and motorcycle jumps and they said, “don’t try this at home.”  So I’m going over to my brother’s house – this is gonna’ be great!!!! 😝
  • Aunt Patty always asks me why I get out of bed so early and I told her, the world simply can’t revolve around me until I get up!
  • Hard boiled eggs are just miniature whole boneless skinless chickens….  I know, that got a little bit weird…
  • Do you think Tesla owners are concerned that if they tweet something negative about Elon Musk, their car “magically” will not start???

 
 
Have a GREAT weekend and please 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!!!
 
Welcome to the last business day of April which means we are already 1/3rd of the way through 2nd quarter – Holy Cow!  Here is the Uncle Sean Update for 4/29/22:
 

• More great things coming out of Bankers Helping Bankers (BHB) platform and the newly created BHB BaaS Association.  Off to a screaming start (to the moon) as two of the leading Sponsor Banks in the nation join as founding, charter members just this week alone – stay tuned for more!
  • Sutton Bank joins BHB BaaS Association
  • Evolve Bank & Trust joins BHB BaaS Association

 

• Fiserv announces the launch of AppMarket allowing an open platform for banks on Fiserv core (DNA, Cleartouch, Precision, Signature, and Premier) to easily offer and integrate FI FinTech solutions “to address emerging opportunities in crypto finance, gig economy banking, small and mid-size business (SMB) lending and other priorities.”
  • Warning – some Uncle Sean op-ed here:  To my Banking friends - this is what we have been asking for.  An easy open platform to integrate third party FI FinTech solutions to your core.  It is not quite the Holy Grail solution as it is only core specific (not online or mobile), but it is exciting and is a GREAT start!!!!  Go into the Fiserv AppMarket Platform and play around to see what is being offered – it’s really cool!!!!
    • Recall just a few months ago when Jack Henry announced their open marketplace featuring 850+ fintech integrations through Banno.  The difference being the JHKY solution is mobile / online only whereas the FISV solution is core specific (but no mobile).  Again not the end–all solution, but a GREAT start!!!
    • Looking back, it feels like the O.G. to open marketplace was Finastra’s Fusion Fabric (via legacy Malauzai mobile).  Then came Q2 Innovation Studio and Partner Marketplace.  Now the major core processors are providing open solutions.  Exciting times as we begin to bring BaaS back to the bank!!!

 

• The Federal Reserve Bank of St. Louis released their 2021 Annual Report.  Do yourself a favor and read the Main Essay titled The Blockchain Revolution: Decoding Digital Currencies.  It is a bit of a longer essay, but it is easy to read and highly informative if you are looking for a refresher on crypto, defi, blockchain, smart contracts, tokenization, stablecoins, and CBDC.  Uncle Sean highly recommends it!!!! 

 

• Another CU acquisition of a bank – CoVantage Credit Union in WI (Charter #66848, $2.5B Total Assets) announced an agreement to acquire LincolnWay Community Bank in IL (Cert #57971, $277M Total Assets).
  • If you are keeping score, this is the 6th CU acquisition of a bank YTD for 2022 compared to 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis)

 

• A pilot program for instant cross-border (IXB) payments is being launched by EBA CLEARING, SWIFT and The Clearing House (TCH) and is anticipated to launch before the end of 2022.  Initial proof of concept was completed last October.
  • It will be interesting to see how this impacts competition as fintech companies have really been active in this  cross-border payments space (i.e. Wise, Remitly, Sable, TransferMex, and many others).

 

• BetaBank (in organization) submits FDIC application for a de novo digital bank focused on SMB lending.

 

• KeyBank joins the ranks of recent financial institutions to restructure Overdraft Fees and eliminate NSF.

 

• Hmmm…  At Jack Dorsey’s request, Block (fka Square) filed an 8-K with the SEC to officially change Jack Dorsey's title from Chief Executive Officer to “Block Head” effective immediately.  Not ironic at all to me that this was filed on 4/20……  Okay then!  LOL!!!  😃
  • However, per this article in Fortune, Jack Dorsey owns 18,042,428 Twitter shares – giving him a $978M payday at $54.20 per share acquisition price by Elon Musk (a $270M premium over the closing price on April 1).  Touché Sir Block Head!!!

 

• Bond (embedded finance / BaaS infrastructure) and Evolve Bank & Trust (fintech sponsor bank) have partnered together to offer BaaS solutions.  Uncle Sean can’t help but wonder what this means to Synapse who has been a leading infrastructure partner with Evolve for years…???  😲

 

• Fidelity becomes the first major retirement plan provider to allow bitcoin as a 401(k) investment option for workers subject to their employers adoption and 20% allocation limits.
  • This comes fresh off of last month’s DOJ warning to fiduciaries focused on 401(k) plan investments in crypto to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”

 

• Bolt (online checkout provider) finds themselves in a rather precarious position as they are being sued by their most prominent customer (ABG) citing a failure to honor a commitment to provide a checkout product with the ability to “seamlessly integrate” into its partners’ websites.  This looks really UGLY!!!

 

• And of course it wouldn’t be a full week if we didn’t have more CFPB saber rattling.  Now the CFPB is invoking some old Dodd-Frank legislation to examine nonbank financial companies (i.e. FinTech) that pose risk to consumers - namely mortgage, private student loans, payday lenders, debt collection, international remittance, and auto loan servicing.

 

• Notable FinTech funding for the week:
  • Cogni (digital banking app) raised $23M in Series A funding with expansion plans into crypto including a multichain wallet, crypto trading, high-yield savings account, and early access to limited edition NFTs.
  • MetaLend (lending protocol for NFT’s) raised $5M in Seed funding.
  • Ellis (U.S. neobank for immigrant students) raised $5.6M $5.6M in Seed funding.
  • Kard (rewards-as-a-service API for card issuers) raised $23M in Series A funding.
  • Copper (teen banking app) raised $29M in Series A funding round and is expanding the app to allow customers to gain the ability “to direct funds from their FDIC-backed accounts into a wide range of investments, from individual stocks to mutual funds to cryptocurrency.”  Thus creating a parental supervised environment where teens can learn as they spend, save, and invest.
  • ModusBox (payment integration infrastructure platform) raised $7.5M in Series A funding round.

 
 
Random Uncle Sean Stuff:

• DON’T FORGET – Mother’s Day is next weekend, May 8th!!!!!  You’re welcome - LOL!!!!
• Yep, you know Uncle Sean has some Dad Jokes for you:
  • Which letter is silent in the word “scent?”  Is it the S or the C???
  • Do twins ever wonder which one of them was unplanned?
  • Maybe Oxygen is slowly killing you and it just takes 75-85 years to fully work…
  • Why is the letter W called double U and not double V?
  • The word “swims” upside down and backwards is still swims (wait - there’s that double U)!!!

 
 
Have a GREAT weekend and please 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!!!
 
Happy Earth Day!!!  Here is the Uncle Sean Update for 4/22/22:
 

• For the headline spot this week, Uncle Sean gives you the punchline first – this is what a De Facto OCC FINTECH CHARTER looks like…  Now that I have your attention - Column, N.A. (FDIC #58224) effectively emerged from stealth this week as the new “developer infrastructure bank.  The only nationally chartered bank built to enable developers and builders to create new financial products.”  Basically a fintech bank - WOW!!!!  How did we get here?  Well, I’m glad you asked… 😊
  • Uncle Sean and the FedFis Team recently came across Column, NA as we were updating our 1Q2022 FinTech Analytics© Report (nice plug, right) when we saw that the Point Debit Card had changed sponsor issuers from LendingClub Bank (fka Radius) to Column, NA.  Needless to say I was excited to see a new sponsor bank emerge – but there is even more to the story:
    • Last year (3/8/21), investors acquired Northern California National Bank for about $50M (a smaller $330M nationally chartered bank).
    • What was not disclosed (until recently) was that the "investors" were William Hockey (former President, CTO, and co-founder of Plaid) and his wife, Annie Hockey.
      • The “change in control” merger was completed on 7/14/21 and FFIEC shows that Northern California National Bank changed their name to Column NA on 8/16/21.
      • From a brand perspective is where things separate.  
        • Northern California National Bank (“powered by Column N.A.”) retains their website and brand as the traditional bank operations.  The separate Column website is where the new fintech BaaS layer resides and lists Plaid (among others) as their customers.  If you spend 2 seconds on the Column website, there is no doubt this is a fintech infrastructure bank.  Hell, even the website structure and font look eerily similar between Plaid and Column.  It’s pretty cool; and you can check out their blog  "Announcing Column" which is really cool too!
        • While the bank operations still utilize FIS-BancPac (source: FedFis) for core processing, Column (on the fintech side) has “built its own core purposefully to expose primitives like ACH directly to developers.”
    • Even better, this is not the first example.  Brian Barnes (founder and CEO of the fintech M1 Finance) acquired First National Bank of Buhl which was one of the smallest nationally chartered banks by asset size ($34M total assets) via change in control merger; and readily admitting that M1 was not ready to become a bank holding company.
  • Don’t take any of this the wrong way - I support and applaud the innovative approach by both Mr. Barnes and Mr. Hockey; and I LOVE seeing the “middleware” BaaS structure brought back to the actual bank (a model that Cross River Bank and many others have also excelled at).  I am also SUPER happy that we did not lose a charter in the M&A examples above!!!
    • To expand a little bit more, to me this is the 3rd Gen iteration of a fintech charter; and the evolution has clearly been a product of a tedious and restrictive U.S. De Novo process:
      • 1st gen was the standard de novo application by a fintech – i.e. Varo (expensive, lengthy, very restrictive business plan, and not granted for most applicants)
      • 2nd gen was “buy the bank” – i.e. SoFi acquisition of Golden Pacific Bank (very small nationally chartered bank).  Jiko really spearheaded this movement.
      • And now we have 3rd gen – a much easier “change in control” individual / investor acquisition of small nationally chartered banks.
    • Last point – remember when everyone was suing each other over the legality of a National Fintech Charter by the OCC???  Well, Uncle Sean is patiently waiting for the good folks at the CSBS, ABA, and ICBA to freak out when they realize that this is what the new de facto OCC FinTech Charter looks like….  It’s evolution due to a restrictive de novo process.

 

• Fifth Third Bank raises minimum hourly wage to $20 per hour beginning July 4.
  • At first glance, this looks like a great benefit for many of the hourly workers.  However, the contrarian in me can’t help but focus on the fact that higher costs often spur innovation and adoption to newer technologies (in this case the potential for accelerated digital transformation, AI, and RPA).
    • i.e. - not much of a coincidence to me that the same quarter where a barrel of oil hit $130 that Tesla releases record earnings – LOL!!!  Now I know there is a lot more to the Tesla story, but you get the general idea of increasing costs spurring alternate innovation.

 

• OCC issues a Consent Order against Anchorage Digital Bank for BSA/AML program violations.  Not great press for Anchorage (although I suspect they will cure the consent order successfully and quickly); but it does show consistent treatment from the OCC towards digital asset banks (i.e. crypto custody, trading, staking, etc.) as BSA/AML is still a big concern in the digital asset arena.
  • As Mike Fernandez recently pointed out in a LinkedIn post under a separate topic (but applicable here as well), “…make sure your compliance department is just as strong as your development department or all your efforts will be for nothing.”  Yep!

 

• The CFPB is no longer just showing teeth, they are biting hard – especially towards repeat offenders!  The CFPB and NY Attorney General sue MoneyGram as a “repeat offender.”
  • “MoneyGram spent years failing its customers and failing to follow the law, ignoring customer complaints and government warnings in the process,” said CFPB Director Rohit Chopra. “MoneyGram’s long pattern of misconduct must be halted.”  OUCH!!!

 

• Notable FinTech funding for the week:
  • NovoPayment (global BaaS platform) raised $19M in Series A funding with an emphasis on expansion in the U.S. market.
  • SEON (online fraud prevention) raised $94M Series B funding round to continue to expand global operations “In 2021, the company more than tripled its annual recurring revenue, grew its headcount by 4X, and opened new offices in Austin, and Jakarta.”
  • Flipside Crypto (blockchain analytics) raised $50M in new funding at a $350M valuation.
  • BlockApps (blockchain developer) raised $41M in new funding.
  • FundGuard (AI platform that assists asset managers and fund administrators to manage and service funds, ETF’s, and insurance) raised $40M in Series B.
  • ThreatLocker (cybersecurity) raised $100M in Series C .
  • Spruce (decentralized identity) raised $34M in Series A.
  • Oyster (red-hot distributed workforce platform market) raised $150M in Series C funding at a $1B valuation following their launch in 2020.
  • Convoy (digital freight network) raised $260M in Capital including $160M Series E plus $100M in venture-debt.
  • And of course we can’t pass up a 4/20 highlight – Treez (cloud-based retail and supply chain platform for the cannabis market) raised $51M in Series C funding at a $260M valuation.

 
 
Random Uncle Sean Stuff:

• Happy 96th Birthday to Queen Elizabeth II; and having taken the throne at age 25, now celebrates an impressive 70 years of leadership service (platinum jubilee)!!!  The all-out shindig for her birthday and platinum jubilee celebration will actually occur in June when it’s a bit warmer.  BBC has a great compilation of the Queen's life in pictures; and check out the Barbie Signature Queen Elizabeth II Platinum Jubilee Doll by Mattel that instantly sold out. 
  • Do you think she bought one for herself – you know I would have!!!  I can see it now…  An Uncle Sean doll (err Action Figure) holding a big ole catfish!  LOL
• Happy Earth Day!!!  In an era where we as a global society finally seem to pay more attention to ESG, conservation, pollution, and environmental restoration – it’s important to recognize the O.G. since 1970 - Earthday.org.
• And here they come….  Dad Jokes – it’s how eye roll…
  • Why do hens lay eggs?  Well, they would break if they just dropped them.  Duh!!!
  • In honor of Earth Day (and in my best Obi Wan Kenobi voice), may the Forrest be with you!
  • Do you know why you can’t hear dinosaurs pee?  Because they are extinct…. 😊

 
 
Have a GREAT weekend and please 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.