Uncle Sean Update - Week 51

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

  
 
Random Uncle Sean Stuff:

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

 
 
Have a GREAT weekend and stay safe!!!