Uncle Sean's Update - 11/5/21

Happy Friday!!!
 
Don’t forget to sign up here to have the Uncle Sean Update sent direct to your inbox each week!  Here is the Uncle Sean Update for 11/5/21:
 

• It’s Fed Week, and something happened this time - LOL!!!!  Finally, the FOMC announced that they will begin tapering the $120B bond buying program by reducing the amount of Treasury Securities by $10B and MBS by $5B each month beginning in November and December.  After December, the FOMC stated that “similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook” – which means they could either speed up or slow down the asset purchases as needed.
  • Here is the full FOMC Statement and the Implementation Note; and as always, CNBC has a good summary.  Although Chairman Powell is sticking with his inflationary reference as “largely transitory”, he did mention “uncertainty” as to future inflationary pressures specifically towards supply constraints….
  • If you really want to get weird like me, here is the 56 minute FOMC Press Conference video as well as the 27 page written transcript of Chairman Powell’s press conference.

 

• The much anticipated President’s Working Group on Financial Markets (PWG) report on stablecoins is here!  The punchline???  The regulators told Congress to enact laws to regulate.  Wow – LOL!!!!  Yep, I think everyone was expecting a little bit more after four months of regulatory research.  All kidding aside, there were 2 main points from the PWG Report as follows:
  • 1 – legislation should be enacted to “limit stablecoin issuance, and related activities of redemption and maintenance of reserve assets, to entities that are insured depository institutions.”  Basically, FDIC insured banks should be the ones issuing stablecoins.  Could be bad news for Tether and Circle.  Or maybe a new type of Sponsor Bank emerges here….???
  • 2 – subject custodial wallet providers (such as Coinbase, Binance, and Gemini) to “appropriate federal oversight” including risk management, liquidity and capital requirements.
  • I found these summaries by CU Today and Banking Dive to be pretty good and short reads regarding the PWG Report.

 

• The White House submitted formal nomination to the Senate recommending Saule Omarova to become the new comptroller of the currency.  Critics of the outspoken nominee have had over a month to position themselves since the White House originally announced intent to nominate Saule Omarova on 9/23.  The upcoming confirmation hearings should be interesting; and probably entertaining as well – LOL!!!!

 

• Klarna released their next-gen global shopping app allowing consumers to shop at all on-line stores and use Klarna’s BNPL solution to pay for items regardless of whether the merchant is partnered with Klarna or not.  Additional features are planned to make the app the “ultimate shopping browser of the future”.   The new Klarna app is available in “the US, UK, Australia, New Zealand, Germany, Austria, Spain, Netherlands, Belgium, Sweden, Finland, Norway, Denmark, Poland and France.”

 

• Zelle reported strong Q3 2021 transaction results with stellar growth.  Overall, Zelle processed $127B on 466M transactions for Q3 2021.  That’s a 51% increase in dollar volume and a 44% increase in the number of transactions YoY.  Notably, the trajectory for Zelle Business Transactions is showing a rapidly growing use case beyond P2P.  Zelle currently has more than 1,200 financial institutions live on the network and another 1,835 signed, but not yet live.

 

• First Internet Bancorp (bank subsidiary is First Internet Bank of Indiana) announced an agreement to acquire First Century Bancorp (bank subsidiary is First Century Bank) – source: FedFis M&A database.   I read several articles regarding First Century Bank’s feature sets including card programs (First Century is among the top 15 U.S. commercial prepaid card issuers), lock box, ACH, and other tech features.  However – none of them mentioned Ingo Money….  A quick look into the FedFis Fintech Analytics© database (nice plug there) and we see that First Century Bank is the primary sponsor processor for Ingo Money; and the Ingo Money App is used by a huge majority of FinTech challengers for mobile deposit capture (Paypal’s Venmo, Walgreens Scarlet, Amex Bluebird, card.com, and many more).  It will be interesting to see if Ingo Money switches to another sponsor bank due to the merger, or if they are content to work with First Internet Bank of Indiana after the merger is completed.
  • You can check out the nicely done Acquisition Presentation by First Internet Bancorp for more financial detail regarding the merger.

 

• STAR Financial Bank in Indiana to offer crypto services on their mobile app to allow customers to purchase, sell, and secure storage of bitcoin powered by NYDIG and leveraging the Alkami digital platform.

 

• Rocket Mortgage goes nationwide to banks via partnership with Salesforce to provide “Rocket’s mortgage origination capabilities directly to banks, credit unions and other FIs through Salesforce Financial Services Cloud.”

 

• Square’s Cash App takes on teen banking by announcing availability to users 13 and up.

 

• Walmart installs 200 Bitcoin ATM's across the U.S. and plans to install at over 8,000 U.S. locations over the coming months.

 

• Cross River Bank announced the acquisition of Betterfin (SMB credit management and digital lending platform).

 

• Notable fintech funding for the week:
  • Plate IQ (B2B payment automation) raised  $160M in Series B funding round
  • Checkbook (digital payment platform / payment service provider) raised $10M in Series A funding round
  • Tifin (AI driven wealth mgmt) raised $47M in Series C round at a valuation of $447M which is a 5x increase over their Series A valuation in late 2020
  • Digital Currency (cryptocurrency conglomerate) raised $700M in a secondary sale of DCG shares at a valuation of $10B
  • equipfi (API-driven BNPL solution for banks & CUs) raised  $3M in Seed financing
  • Prepaid Technologies (prepaid card platform) raised $96M in capital boasting 9x revenue increase since their last capital raise of $5M in 2016
  • Laika (compliance-as-a-service) raised $35M in Series B funding
  • HoneyBook (SMB client mgmt platform) raised $250M in Series E funding round
  • Valon (digital mortgage-servicing / proptech) raised $43.9M in Series B at a $590M valuation
  • Horizon3.ai (cybersecurity startup) raised $30M in Series B round

 
 
Random Uncle Sean Stuff:

• Although Uncle Sean was pulling for the Astros…..  Congratulations to the Atlanta Braves for winning the World Series in Game 6 against the Houston Astros.  ESPN has a good editorial piece about the Championship and the Braves’ rough year fighting through injuries, an entirely replaced outfield by mid-season, and a depleted pitching rotation by the end of the regular season.
• Measuring snakes in feet is fairly rude when you think about it….  😊
• Since it is November, I’ll be showcasing a few of my favorite (and easy) recipes for Thanksgiving, football watch parties, or just lounging around on a fall day.  This week it is Uncle Sean’s Burgundy Mushrooms (this is Aunt Patty’s all-time favorite):
  • This is a long cook (about 9 hours in the slow cooker) and don’t try to speed it up; but it is super easy – just “set it and forget it.”  It makes the whole house smell great and pairs well with beef (steak) or smoked turkey.
  • 4 lbs of whole white mushrooms (yeah – 4 whole pounds..  It’ll cook down about half)
  • 1 cup of butter (2 sticks)
  • 2 tsp Worcestershire sauce
  • 1 bottle (750 ml) burgundy wine (I use Josh brand Cabernet Sauvignon – and yes it hurts my feelings a little bit to pour that into anything other than a glass for myself - LOL)
  • 1 tsp coarse black pepper
  • 2 cups water
  • 4 chicken bouillon cubes
  • 4 beef bouillon cubes
  • 1 tsp dill seed
  • 4 cloves of garlic (peeled) – I use the minced garlic in the jar and it’s about 2 tsp worth
  • Pour everything together in your slow cooker / crockpot, cover and cook on low for 8 – 9 hours (yes, it takes that long so plan accordingly) and enjoy!!!!!

 
 
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.