Uncle Sean's Update - 1/20/23

​Happy Friday!!!
 
Here is the “ChatGPT-free” (LOL) Uncle Sean Update for 1/20/23:
 

• Uncle Sean gives a virtual high-five to First National Bank of Eagle Lake as the latest institution to join the BaaS Association as we continue to grow our community of institutions focused on promoting banking-as-a-service in a safe, sound, and regulatory compliant manner.  I love the open collaboration within the entire Bankers Helping Bankers ecosystem!!!  😊

 

• Good ole nbkc bank (FDIC 35014) expands their BaaS / FinTech portfolio announcing a sponsor bank partnership with Acorns to provide Acorns-branded checking accounts and debit cards to qualifying Acorns customers.
  • Side note – I would like to give a special thank you to Mr. Brian Unruh who was gracious enough to spend a few minutes with me several years ago and talk about FinTech from a sponsor bank perspective at one of our conferences.  Those few minutes really resonated with me and sparked a wonderful several-year journey of researching, exploring, writing about, and even giving multiple presentations each year on fintech / sponsor banks / banking-as-a-service.
    • The best part about that story is that he probably doesn’t even remember that moment, but he was so nice and generous with his time (I think he was trying to leave to catch a flight) that it made a big impact on me.  Thanks Brian!!!

 

• Totem (fintech offering banking services directly to native indigenous people) strikes an agreement with Eastern Shawnee Tribe to offer FDIC-insured accounts without monthly fees or balance minimum requirements to its members across the US.  Good work - very nice!!!

 

• Grasshopper Bank (FDIC 59113) partners with SMB fintech Ramp to provide Grasshopper’s small and medium sized business clients access to Ramp’s corporate cards and financial automation platform.

 

• A couple of higher profile c-suite personnel changes:
  • Payoneer announced CFO transition and appointment of Bea Ordonez (previously Chief Innovation Officer at Webster Bank) as the Company’s new Deputy Chief Financial Officer.
  • Temenos announced a change in leadership team as the company prepares for the next phase of growth.
  • nCino also announced CFO transition and the appointment of Greg Orenstein (a c-suite executive at nCino for 7+ years) as nCino’s new Chief Financial Officer. 

 

• This caught my attention this week….  Michael Hsu (acting head of the OCC) stated that big banks “too big to manage” could face break-up.  “It is the size and complexity of the bank that is the core problem that needs to be solved, not the weaknesses of its systems and processes or the unwillingness or incompetence of its senior leaders,” said Hsu.  Ultimately noting that, “effective management is not infinitely scalable.”
  • I was particularly intrigued with the OCC’s four levels to the escalation framework:
    • 1st level is an MRA, which is a non-public supervisory finding typically stemming from an examination.
    • 2nd level is public enforcement actions, such as a consent order; and could be paired with a civil monetary penalty.
    • 3rd level is despite enforcement actions, public perception is that the bank doesn’t care enough, or is not capable of fixing the problem (or both), then growth restrictions may apply (recall where Wells Fargo is still under the 2018 asset size growth restriction by the Federal Reserve).
    • 4th level is asset divestiture or “breaking up the bank”…  😲

 

• Meanwhile, the Federal Reserve and the OCC approved BMO's $16.3B acquisition of Bank of the West creating the 13th largest commercial bank in the US…..

 

• Genesis (crypto lender) files for Chapter 11 bankruptcy…  No shock here since customer funds have been frozen since mid-November.  Curious as to how this will effect Gemini as Genesis' largest creditor owed $766M per the BK filing…

 

• Farmington State Bank, d/b/a Moonstone Bank (FDIC 6149) announced they are exiting the crypto space and “returning to its original mission as a community bank.”  They also stated that they will be dropping the Moonstone Bank name.
  • What a long strange trip it’s been!

 

• PayPal’s Xoom (international transfer) launched Debit Card Deposit for cross-border transfers allowing Xoom customers in the U.S. to send money to eligible Visa debit cards in 25 countries with real-time access to funds via Visa Direct.

 

• Robinhood announced a new media arm called Sherwood Media.

 

• Hey, look what showed back up on Uncle Sean’s radar – Notable FinTech funding for the week:
  • Splitero (home equity platform) raised $12M in Series A citing tremendous growth and an abundance of untapped equity in the U.S.
  • Canary (employee hardship / tax-advantaged relief platform for employers) raised $2.85M in new capital.
  • nsKnox (bank account validation and B2B payment security) raised $17M in new capital citing strong demand in cybersecurity, fraud mitigation, and compliance.
  • Link (digital payments platform) raised $20M in Series A and launched LinkPay capitalizing on the ‘pay-by-bank’ model stating a 70% savings on merchant fees over debt card / credit card processing and is SOC 2 compliant.  TechCrunch also has a good interview with Link.
  • Core10 (digital account opening and lending platform) raised $6.5M in Series B funding round.

 
 
Random Uncle Sean Stuff:

• Whew – it was certainly one of those tough weeks where I feel like I went 12 rounds with Muhammad Ali, but we made it to FRIDAY relatively unscathed!  So let’s just jump right into some Dad Jokes to kick off the weekend – YAY!!!
  • In the Middle East, is the person in charge of dairy processing, distribution, and sales referred to as the Milk Sheik…???
  • You shouldn’t use your left hand to brush your teeth….  You should use a toothbrush…
  • I now have an EpiPen.  My brother gave it to me as he was passing out.  Seemed real important to him that I have it.  Such a thoughtful guy - LOL!!!
  • Aunt Patty asked me what’s the dumbest thing I have ever done….  Wow – really bold of her to think Uncle Sean has peaked!!!!  😝

 
 
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Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #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.