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Bulletin

Uncle Sean's Update - February 19th

2/19/2021

 
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Happy Friday!!!! 
 
It is COLD here in Texas!  Here is the Uncle Sean Update:

  • The Federal Reserve Bank of St. Louis is taking a close look at Ethereum based decentralized finance (DeFi).  They recently published a report titled “Decentralized Finance: On Blockchain and Smart Contract Based Financial Markets”.  Who cares???  Well, it’s more evidence that governing bodies are looking at this very closely; and yields more support.  New investors / interests coupled with new political administrations point towards even more visibility in the crypto / blockchain space.  Key takeaways to the FRED research report are:  1. The report has a fairly bullish tone and notes that DeFi has the benefits of accessibility, composability, efficiency, and transparency; but 2. Cautions that smart contracts, dependencies, and operational security are key risks to address (echoing comments by Janet Yellen earlier this month).
 
  • Speaking of crypto, Mastercard and Island Pay launched the World’s first Central Bank Digital Currency (CBDC) linked card – the Bahamas Sand Dollar prepaid Mastercard gives people “the option to instantly convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted on the Island and around the world.”  And so it begins…
 
  • FDIC appoints Neocova founder, Sultan Meghji as first ever Chief Innovation Officer.
 
  • Brex is now the latest fintech / challenger bank to file for FDIC insurance via Utah ILC bank charter.
 
  • Marqeta is making headlines this week as they filed confidentially with the SEC for a proposed IPO with a valuation of approximately $10B.  They also announced that they have expanded their card issuing capabilities with a new credit card platform allowing innovators to launch next-generation credit card programs with flexible controls and features such as rewards, APR and credit lines in real-time based on custom rules using an intuitive dashboard.  Marqeta has partnered with Deserve to “power Marqeta’s program management services, including origination, underwriting, bank and bureau integration, customer service, compliance and risk management”.
 
  • Akoya (an FI consortium-owned financial data aggregator and competitor to Plaid in the US) announced that JP Morgan Chase has joined the Akoya Data Access Network.  “Fintechs, data aggregators and other data recipients can now request application programming interface (API)-based access to Chase customer data through Akoya” – thus providing massive scale to Akoya (not to mention significant street cred).  If you want to learn more about Akoya, Tearsheet has a good podcast and write-up with AkoyaCEO, Stuart Rubinstein (from December 2020).
 
  • In case you missed it, PayPal surpassed Mastercard in overall market capitalization this week.  Wow!!!!!
 
  • SeedFI raises $65M consisting of $15M Series A plus $50M Debt Facility led by Adreessen Horowitz (a16z) which is also the same VC firm that granted their $4M seed round (no pun intended) in 2019.
 
  • Vista Equity Partners makes a strategic hire this week and lands Tom Hogan as an Operating Managing Director in Vista’s Flagship Fund.  Most recently, Tom served as Chairman and CEO of Kony for 6 years until the acquisition by Temenos in 2019 where he served as North American President until now.  I’ll be 100% honest – I’m intrigued to see what Vista does next in the Financial Services / FinTech vertical.
 
  • Check out this article in Bankers Digest, Let Me Tell You a Story by Chris Williston – he nails it!  I laughed a little too hard as I am somewhat of a numbers geek; and we have the actual data that supports the core conversion rates that Chris refers to.  Actual facts, not narrow surveys forced into grandiose assumptions to fit a “consultants” prerogative (oops – did I just say that???).  I’m reminded of the line from the movie ‘Anchorman: The Legend of Ron Burgundy’ - “They've done studies, you know. 60% of the time, it works every time.”  LMAO!!!
 
Random Uncle Sean Stuff:
  • You might have heard that we had a slight weather event over the last 8 days or so here in Texas.  WHEW!!!!  Ice, snow, single digit temps, rolling blackouts, and downed tree limbs / power lines are all manageable.  We’re Texans – we can handle anything….  but when the water runs out……  things got a little interesting – LOL.  And WHAT THE HECK IS FREEZING FOG – C’MON MAN!!!  I didn’t even know that was a thing!
  • To paraphrase Mr. Robin Fussell, “It was so cold outside this week, I saw a Big 4 banker with his hands in his own pockets!!!!”
  • I can’t wait to complain about it being 106 degrees while floating down the San Marcos river…  Ahhhhh, now that’s better.
  • Oh yeah – and Happy Birthday to our middle son, Parker!!!!  Mom and Dad are proud of you, young man. 
 
Have a GREAT weekend and please stay safe (and warm)!!!!
 
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.

Uncle Sean's Update - February 12, 2021

2/12/2021

 
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Happy Friday!!!! 
 
There is quite a bit of substantial crypto news this week.  Here is the Uncle Sean Update for 2/12/21:

  • Last week we mentioned Visa’s plans related to crypto (testing with OCC approved Anchorage Trust and First Boulevard fintech company), so it’s only fair that we share Mastercard’s plans. Check out their blog on Why Mastercard is Bringing Crypto Onto Its Network.  Here are some cool statistics for you:  Mastercard is accepted at 37 million merchants in 210 countries; Visa is accepted at 44 million merchants in approximately 200 countries; and PayPal is accepted at about 29 million merchants.  But only 15,000 business globally accept cryptocurrency payments (for now).  With increasing adoption and regulatory (OCC) guidance, it looks like the global payments landscape is beginning to have a major change.

  • Blue Ridge Bank (one of the FinTech Sponsor Banks that we are tracking here at FedFis) now allows their customers to purchase and redeem Bitcoin at 19 of their ATMs.  They are the first commercial bank in the US to provide access to Bitcoin through their ATMs at its branch locations.  They partnered with BluePoint ATM Solutions and LibertyX.  While there are other Bitcoin ATMs out there, they are not connected to a bank account.  The Blue Ridge scenario is unique (this week anyway) as it has the dual capability of servicing cash and Bitcoin transactions.

  • BNY Mellon announced that they will begin financing bitcoin and other digital currencies and plans to be able to offer these services to their customers later this year.  “BNY Mellon is proud to be the first global bank to announce plans to provide an integrated service for digital assets,” Roman Regelman, CEO of asset servicing and head of digital at BNY Mellon, said in a press release.

  • I’m pretty excited to be following (okay, more like stalking - LOL) these folks at Moov.  They are making headlines with their fintech_devcon conference later this fall.  Also, check out this super cool interview with Wade Arnold (CEO of Moov) where he talks about BaaS and payments as not just for fintech companies integrating with legacy bank tech stack, but more related to EVERY consumer facing company.  “We see a proliferation of the Uber of neighborhood lawn mowers to whatever the next great startups are going to be,” Arnold said. “To allow those payments to be easier for developers to add that feature to their platform is going to be key for that proliferation to happen.”  I love it!!!

  • Have you heard about this public bank concept brewing in New Mexico?  Basically it would be a state created bank (initially capitalized by a $50M contribution from the State Treasurer) that receives deposits from local governments and lends to local NM businesses in order to promote economic development.  It’s been kicked around for a few years, but is really starting to gain momentum and is likely to be introduced during the 2021 legislative session. 

  • Our Credit Union friends have been busy this week too!  Catalyst Corporate FCU announced the launch of PayMoli, their P2P mobile payment solution, allowing CUs an easy onramp to the marketplace. 

  • PSCU announced their plans to roll out a new installment payments solution, aka BNPL installment plan, citing “tremendous demand”.  Their BNPL product will have the flexibility to enable CUs to customize the criteria for their respective installment offers.  The platform will “integrate with PSCU’s Digital Xperience (DX) suite of market-leading digital offerings and will be available through APIs, and will leverage technology from Fiserv.”

  • You didn’t think I would miss an opportunity to mention a SPAC, did you???  MoneyLion is set to go public with $2.9B valuation via acquisition by SPAC Fusion Acquisition Corp. according to the MoneyLion press release today.  If you want to geek out (like me) – here is the MoneyLion Investor Presentation (nicely done by the way). 

  • Monzo taps $69M Series G extension in a down round on lower valuation.  This follows their $80M raise just in December which was also a down round on lower valuation - OUCH!!!  They announced this week that they hired Carol Nelson as US CEO to focus on the US market.
​
  • Reddit raises $250M Series E round.

  • Nymbus raises $53M Series C round.
 
Random Uncle Sean Stuff:
  • HAPPY VALENTINES DAY or Presidents Day Eve for those less smitten!
  • They are forecasting a low of 8 degrees on Sunday and 0 (yes, zero) degrees on Monday here in the Texas Hill Country.  DANG that’s cold!  But it’s okay because they are also calling for 3-5” of snow; and I can’t wait to go outside and build a fire in the snow!!!!
  • That reminds me - I better hurry up and get to the store for some whiskey – oops, I mean “supplies”…  LOL!!!
 
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.

Uncle Sean's Update - February 5th 2021

2/5/2021

 
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Happy Friday!!!
 
There was a lot of activity in the payments space this week; and I heard a rumor that there is a football game this weekend! On to Uncle Sean's Update:

  • Super Bowl Sunday is right around the corner!  Even if you don’t like football, pretty much everyone enjoys the Super Bowl commercials; and some have been leaked early.  This year sports a string of FinTech debuts into the most coveted ad space on TV.  Robinhood is moving forward with their commercial debut during the Super Bowl.  Judging by the smashing success (cough cough) of their PR and Communications Team recently, I can’t wait to see what they come up with!!!!  BNPL firm Klarna enters the space with SNL star and actress Maya Rudolph.  DoorDash has an ad featuring Daveed Diggs and Cookie Monster which is part of a larger marketing campaign focusing on deliveries beyond food.
 
  • PayPal finds itself in a lot of news this week.  Notably their record earnings in which they gained 16 million accounts and transaction revenue increased 12% over 3Q.  However, they also find themselves in the middle of a CFPB investigation related to their Venmo platform alleged unauthorized fund transfers and collections process.
 
  • Visa prepares payment rails for full range of cryptocurrency assets; and partners with fintech startup First Boulevard(fka Tenth) to pilot the new suite of crypto APIs.
 
  • The Federal Reserve has updated their expected launch timing for real-time payments - FedNow instant paymentservice is expected to go live in 2023.  If you really want to geek-out, here is the link to FedNow as part of FRBservices.org.
 
  • BNPL firm Klarna announced that they are experiencing tremendous growth in the US including doubling over last year to a record 15 million customers and is accelerating with “more than 1 million US customers joining Klarna each month since October 2020”.
 
  • And we simply can’t allow a week to go by without mentioning another SPAC deal, so here it is - Payoneer goes public after SPAC acquisition valued at $3.3B by FTAC Olympus Acquisition Corp.  Payoneer has a pretty cool Investor Presentation deck (I like these presentations a little too much).
 
  • LendingClub (NYSE: LC) completed its acquisition of Radius Bank.
 
  • Startup Paybby acquires Wicket to enter into minority bank offerings.
 
  • Clarity Money, purchased in 2018 by Goldman Sachs for $100M, is set to be shut down on March 5th as GS focuses on Marcus Insights.
 
  • Narmi announced that they raised $20.4M Series A funding.
 
  • FinTech startup Fair raises $20M and expects to launch in April following a beta period for family and friends in March.
 
  • Just when you think you have seen it all, check out the startup TreeCard (coming soon)….  Yes, they appear to have the World’s first wooden debit card!  The core of the card is made from recycled plastic bottles and the exterior is made from sustainably sourced cherry wood.  I’m digging it!
 
We produced an internal white-paper about a week ago titled “Reassessing the Value of a Bank Charter”.  It was fun putting that together; and we always get a chance to have some good campfire conversations when we produce these reports.  One of the cool concepts that came out of it was the changing landscape of digital customer experience (CX, UX, Personalization, or whatever buzz word you want to apply) - specifically related to school aged children that are successfully completing their tasks remotely with Zoom meetings and deadlines….  And we thought Millennials changed the landscape – wait until these kids are a little bit older.  There will be a whole new set of demands and expectations.
 
Random Uncle Sean Stuff:
  • We will be firing up the big smoker (good ole Nelly) for Super Bowl weekend and cooking chicken, sausage, and tri-tip.  God bless America!!!!
  • Did you know that Catfish The TV Show has nothing to do with actual catfishing?  I wasted half an hour waiting to see what lake they were going to…  If you listen closely right now, you can literally hear my 16 year old daughters embarrassment – LOL!
  • Have you seen the Chickasaw Nation PPE face masks?  You should definitely check this out on Instagram.  They distributed PPE to all of their citizens and people are posting pics of themselves from all over the US wearing their Chickasaw Nation face masks - very cool!!!! 
 
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.

Uncle Sean's Update - January 29, 2021

1/29/2021

 
Happy Friday!!!!
 
WOW, what an exciting week this was! So let’s get to it!
 
  • Reddit creates “Woodstock moment” as a new breed of retail investors armed with stimulus checks and connected through social media via wallstreetbets seek to “stick it to the man” – and have largely succeeded in crippling some of the biggest Wall Street hedge funds by targeting heavily shorted stocks.  Peace, Love, and Investing – yeah baby (channeling my inner Austin Powers).
  • Robinhood once again finds itself in the middle of controversy when they decided to suspend trading activity on GameStop (and others) from retail investors (see Reddit wallstreetbets platform mentioned above) initiating a short-squeeze, but allowing hedge funds to continue to make trades.  This gets really messy when you see how Robinhood makes money running a free trading platform (by charging market makers for order flow on the back-end).  Citadel is one of the biggest market makers in the US and is already distancing themselves from Broker’s decision to stop retail trading.  But wait – this train wreck gets even better!!!  The SEC issued a public statement saying they were “closely monitoring” (not really what you want to hear) the extreme trading events of the last several days; and working with other regulatory agencies to “protect investors and to identify potential wrongdoing”.  And of course, here come the customer lawsuits.  So much for Robinhood's Mission Statement, “to democratize finance for all” – OUCH!!!!  Someone needs to get them a new PR & Communications Team!!!
  • It’s Fed Week!  I geek out a little too much each time the Federal Reserve meets to discuss monetary policy.  Nothing new - keeping interest rates at zero until after the cows come home; and continue purchasing bonds (Treasury securities and MBS) to the tune of $120B per month.  Pretty soon that will add up to some real money.  Here is the full FOMC Statement and includes a link to the implementation notice.  CNBC has a pretty good write-up as well.
  • Although Finn was short lived in the US, JP Morgan Chase is at it again – this time rolling out a digital retail bank in the UK.  Hopefully they will not make the same Finn mistakes – here’s a little bit of history…   Finn was built on top of the same back-end infrastructure as Chase’s conventional mobile app (error #1), so it even looked the same with no real differentiating factors between Finn and Chase’s mobile banking app (error #2).  Chase also rolled out an online only account opening process (NAO) that was very similar to Finn's onboarding process (error #3), making Finn irrelevant for customers who couldn't visit branches to open an account.  Undoubtedly resulting in cannibalization of existing accounts from Chase to Finn as opposed to net new accounts.  Do you think Chase will name the new UK direct bank “Finnless”???  LOL!!!
  • Speaking of Direct Bank  / Digital Brands….  I was doing some research and reading up on Goldman Sachs earnings and when I stumbled upon some Marcus data – check out page 8 of the GS strategic update.  Marcus now has almost $100 Billion (yes, Billion with a B) in deposits at the end of 2020 – WHOA!!!
  • New fintech startup Greenwood announced they signed up 500K users in the first 100 days since opening their wait list in October.  Greenwood expects to officially launch in May or June of this year and is aiming to serve the Black and Latinx communities.  Greenwood’s Give Back Program allows customers to donate to organizations such as the NAACP, the United Negro College Fund (UNCF), or Goodr (a food bank) every time they use their debit card.
  • Check out Paid Deposit Switch API launch making it easier for users to establish or change the destination of their direct deposit.
  • Coinbase to become publicly traded via direct listing of its Class A common stock as opposed to IPO.
  • Branch announces the launch of their Employer Payments Platform.
  • Mambu announced another year of approximately 100% YoY growth for 2020 and a market valuation of $2.1B.
 
And the capital keeps pouring in with no signs of slowing down….  Here are a few honorable mentions for this week:
 
  • Fast raises $102M in Series B round led by Stripe and Addition, with participation from Index Ventures and other existing investors.  Fast allows you to log into websites and check out without having to enter information more than once creating a one-click checkout process. 
  • Albert raises $100M in Series C round bringing their total funding to date to $173M since 2016.  Albert is a mobile banking, savings, and investing platform and has signed up more than 5 million users.
  • Stilt raises $100M debt facility with Silicon Valley Bank bringing their total debt facility to $225M.  Stilt provides financial services and credit building products for immigrants in the US.
  • Fintech B2B payment firm, Melio raised $110M in Series C2 round for a $1.3B valuation.
  • Fintech mobile app, Dave secured a $100m Credit Facility from Victory Park Capital.
 
Random Uncle Sean Stuff:
  • One good thing about quarantine lock down – I don’t remember the last time I bought gas for my truck!
  • Still loving our new air fryer!!!  We made homemade chicken wings the other night and they were glorious.
  • January is over???  How did that happen so fast? 
 
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.

Uncle Sean's Update - January 22, 2021

1/22/2021

 
​Happy Friday!!!!
 
FinTech news events were pretty light due to the short week related to the observance of Martin Luther King Jr. Federal Holiday; and just a few other things going on in our Nation’s Capital - LOL!  Here are the highlights for the Uncle Sean Update for 1/22/2021:
 
LendingClub receives regulatory approvals to acquire Radius Bank.  Deal is expected to close on or around Feb 1, 2021 per the LendingClub press release following the customary 15 day Federal Reserve waiting period.  If you are kind of a dork like me, this is actually a “reverse merger” since the surviving entity is the Radius Bank charter.  We will undoubtedly see more of these so here is the flow:  Lending Club becomes a bank holding company by acquiring Radius Bancorp, thus assuming full ownership of Radius Bank (you can’t be a bank holding company without owning a bank).  Then they change the name of Radius Bank (but keep the charter number) to LendingClub Bank, National Association.  See – that description didn’t hurt too bad now did it?!?!?!
 
Third time’s a charm (or is it?)…  Rakuten Bank American files for FDIC Insurance again via pending Utah ILC Charter. 
This is their 3rd attempt in less than 2 years.  In an interview with American Banker, Rakuten Bank America CEO Lee Carter said the company filed its latest application on Jan. 15. Rakuten proposed a business model that is significantly simpler than what was envisioned in its previous applications.  
 
Plaid launches FinRise, a new fintech incubator that looks to empower early-stage entrepreneurs that are Black, Indigenous, or People of Color (BPIOC).  Read more about the program here  - Plaid Blog - FinRise
 
KeyBank to expand their existing Direct Bank (Laurel Road) from student loan refi and mortgages to include loans and deposit products for Doctors per this BankingDive article.  Coincidentally (or not - LOL), they also announced their intention to close 70 branches (7% of their physical network) in 2021 per their KeyCorp 4Q20 Earnings Transcript.
 
The Honorable Dr. Janet Yellen is on track to become the first female Treasury Secretary after serving as the first female chair of the Federal Reserve.  Per this CNBC article, the Senate Finance Committee voted unanimously to approve with a 26-0 vote; and the next step is entire Senate vote.  Jim Kramer likened Janet Yellen to Tom Brady, unflappable under pressure – that is awesome!
 
We lost Mr. Henry “Hank” Aaron this week.  Boxing legend Muhammad Ali once called Hank Aaron “The only man I idolize more than myself.”  Check out this wonderful article by ESPN - Hank Aaron impact measured by more than just home runs.  Tributes have been pouring in over social media and other platforms from Barack Obama, George W. Bush, Dan Rather, Magic Johnson, Jimmy Carter, Johnny Bench, Russel Wilson, and many, many others. 
 
Random Uncle Sean Stuff:
We bought an air fryer this week.  Our first test run was sweet potato fries and it was nothing short of heavenly!!!!
 
I read where Austin Community College (no affiliation – Uncle Sean is a proud Texas State Alumni) recently converted an empty shopping mall into a college campus.  What a great example of positive change by repurposing retail commercial real estate.  “Located inside what was once a major shopping mall, ACC Highland is a national model for sustainable, adaptive, community-minded reuse. It’s the college’s largest campus and still expanding. With indoor fountains, unique study spaces, a park, and many neighboring businesses, there’s plenty to explore.”  
  
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.
 
 

Uncle Sean's Update - January 15, 2021

1/15/2021

 
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.

Uncle Sean's Update - Jan 8th 2021

1/8/2021

 

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.

Why are we really excited about 2021?

1/6/2021

 
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.

Uncle Sean's Update - Bye, Bye 2020!

12/31/2020

 
Picture
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.

Uncle Sean's Update - Week 52

12/24/2020

 
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
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