Uncle Sean's Update - 1/13/23

Happy Friday the 13th!!! 😲
 
You can sign up here to have the Uncle Sean Update delivered straight to your inbox every week!  Here is the Uncle Sean Update for 1/13/23:
 

• Special shout out to Thread Bank as the latest to join the BaaS Association! Chris Black summed it up perfectly stating, “The BHB BaaS Association provides us a unique opportunity to collaborate with and benefit from similarly focused, innovative and leading community banks and other fintech partners on best practices, setting of industry standards and ensuring regulatory expectations are met.”  Yep – nailed it!!!  😊

 

• The BLS released CPI data for December this week.  The good news is that it came in exactly as expected with an annualized rate of 6.5% (core CPI came in at 5.7%) and the monthly rate was down 0.1% (core was up 0.3%) – again, exactly as expected.
  • Some good news - for the YoY rate of 6.5%, this marks 6 consecutive months of decreasing headline inflation with the high being in June 2022 at 9.1%, so we are indeed in a cooling off period.

 

• Congratulations to ZSuite Tech for successful completion of their SOC 2 Type 2 examination – great job!!!!

 

• We already have a CU acquisition of a bank to kick off 2023.  4Front Credit Union (Charter 61365; Traverse City, MI; $977M Total Assets) announced an agreement to acquire Old Mission Bank (FDIC 35303; Sault Sainte Marie, MI; $130M Total Assets).
  • This marks the first announced acquisition of a bank by a CU for 2023 (I am hearing that there are several more in the pipeline).  This compares to 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• Stride Bank (FDIC 4091) announced they have extended their sponsor bank agreement with Chime.

 

• Metropolitan Bank Holding Corp. (NYSE: MCB, FR 2820211), the bank holding company for Metropolitan Commercial Bank (FDIC 34699), announced they will fully exit crypt-asset related vertical citing recent developments in the crypto industry and material changes in the regulatory environment.
  • To be clear, Metropolitan Commercial Bank does not hold crypto on its balance sheet, and does not market or sell crypto assets to customers.

 

• The SEC formally charged crypto lender Genesis and crypto exchange Gemini with selling unregistered securities.  Uncle Sean is wondering if this is too little too late; or a serious signal from Gensler to other crypto firms that they are serious (or both)?  Also wondering if this is what finally prompts a bankruptcy filing as Genesis is STILL not allowing customer withdrawals from their platform for two months now…  That’s just crazy!!!

 

• I cant even make this crap up – Sam Bankman-Fried has launched his own Substack Blog and his first post is a review of why/how FTX collapsed (he still blames Binance CEO)… 
  • This last line of his first blog post is one for the record books - “I have a lot more to say–about why Alameda failed to hedge, what happened with FTX US, what led to the Chapter 11 process, S&C, and more.  But at least this is a start.”
  • I’m sure his attorney’s are thrilled – LOL!!!  😝

 

• Layoffs are still making headlines as the economy cools and FTX contagion continues to wreak havoc:
  • Coinbase (crypto exchange) cuts about 20% of workforce (950 employees) after cutting 18% earlier in June citing FTX contagion.
  • Crypto.com (crypto exchange) also cuts 20% of workforce (estimating about 490 employees) – also citing FTX contagion.
  • Greenlight (family focused fintech offering parental supervised banking and investing for kids) cuts 21% of workforce (104 employees) to better align operating costs with the current economic environment.
  • LendingClub (NYSE: LC and parent of LendingClub Bank, NA) cuts 14% of workforce (225 employees) to align with loan volume and revenue following the Fed’s historic pace of rate increases.

 

• And lastly, here are a couple of things worth keeping an eye on as they develop:
  • The FTC is proposing a rule to ban noncompete clauses for workers and independent contractors citing unfair method of competition.  Hmmm… 😲
  • The CFPB is proposing a rule to establish a public registry of contractual terms and conditions in non-negotiable form contracts to try to hide consumer harm, to stifle criticism about products and services, and to undermine consumer financial protection law.
    • Worth noting that this appears to be limited in scope to “Supervised Nonbanks” which the CFPB identifies as “nonbanks in markets for mortgage lending, payday lending, and private student lending, as well as larger participants in markets for consumer reporting, consumer debt collection, student loan servicing, international money transfers, and automobile financing.”
  • Banking industry trade groups blast SBA's fintech proposal to admit new nonbank entrants to the agency’s 7(a) loan program by allowing fintechs and other nondepository lenders to apply for a Small Business Lending Company license.

 
 
Random Uncle Sean Stuff:

• The record flooding in California has been crazy!  But it is even weirder when you consider CA is in both a flood and a drought at the same time.  Reuters has a good article explaining why the CA flooding will not end the historic drought conditions.
• Is it me or does everyone need about three or four tries to get the USB inserted correctly???  It’s just me, isn’t it…  Dang!
• And of course Uncle Sean is gonna’ drop some Dad Jokes!!!!
  • I’ve decided to make a fresh start in 2023, so if I owe you money - too bad!!!
  • I am old enough now that I can actually gain weight when I breathe!  Funny, not funny!
  • Water is the most essential element of life because without it, you can’t make beer. 😊

 
 
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.