Uncle Sean's Update - 1/21/22

Happy Friday!!!
 
Sign up here to have the Uncle Sean Update sent straight to your inbox each week.  Here is the Uncle Sean Update for 1/21/22:

• Congratulations Community Bankers Association of Georgia for becoming the most recent association of community bankers offering access to the Bankers Helping Bankers platform this week for their member banks in Georgia.  Uncle Sean is VERY EXCITED to be a part of this!!!!!

 

• The long-awaited Federal Reserve document on potential U.S. central bank digital currency (CBDC) is finally here….  I’m glad that Chairman Jerome Powell tempered expectations last week by stating it would be “an exercise in asking questions and seeking input ... rather than taking a lot of positions.”  However, I am happy to report that it is much more detailed than the joint 2-pager released back in November after several months of waiting….  If you want to dig deep, here is the 40 page Federal Reserve report - Money and Payments: The U.S. Dollar in the Age of Digital Transformation.  Otherwise, here are some key points (the paper goes over these in detail):
  • If (and that’s a big if as they continually reiterate that Federal Reserve takes no position on the desirability of a U.S. CBDC) a potential U.S. CBDC were created, it would need to be privacy-protected, intermediated, widely transferable, and identity-verified (that last one is key)
  • Complex policy issues and risks must be fully vetted – specifically, how it might affect financial-sector market structure, the cost and availability of credit, the safety and stability of the financial system, and the efficacy of monetary policy
  • Seeking public comments by May 20, 2022 by using this form - https://www.federalreserve.gov/apps/forms/cbdc

 

• Shout out to SoFi as they get the regulatory nod by the OCC to become a Bank Holding Company through its acquisition of Golden Pacific Bancorp, Inc. thus paving the way for the new SoFi Bank, National Association – very cool!!!! 
  • So I read far too many misleading articles referencing the “conditional approval” specifically related to limiting SoFi’s engagement in crypto.  So to be crystal clear – a written “non-objection notice” is required of all OCC regulated banks before engaging with crypto (see OCC Interpretive Letter #1179), not just SoFi Bank.
  • Additionally, the “conditions” relate to specific capital contributions (the $750M capital injection has been fully disclosed many times) and adherence to an Operating Agreement.  Again, all standard stuff in the banking world but it kind of freaks out some of my non-bank fintech friends I guess.  Here is the actual OCC Conditional Approval Letter.

 

• Stripe inks a 5-year agreement with Ford to modernize and scale the automaker’s e-commerce and payments platform across North America and Europe.

 

• Plaid announced that they are acquiring Cognito, an identity verification and compliance (KYC, AML) platform.  TechCrunch estimates the price at $250M and has a good summary here.

 

• Earned Wage Access (EWA) continues to garner significant regulatory attention.  This week, the CFPB Acting General Counsel Seth Frotman stated in a letter that they may be digging further into this issue again in the near future for greater clarity as to what constitutes a “loan”.

 

• U.S. Bank and Truist become the latest to join the ranks of banks reducing overdraft fees.

 

• Acorns and Pioneer Merger Corp (SPAC – Nasdaq: PACX) have terminated their merger agreement.  Per the Pioneer 8-k, Acorns is required to pay a termination fee of $17.5M in monthly installments through Dec. 15, 2022 PLUS another $15M on Dec. 22, 2022 if Pioneer does not close another deal and decides to liquidate.   

 

• Check out Cross River Bank (one of Uncle Sean’s favorite Sponsor Banks) expanding their sponsor footprint into the crypto world with Cross River Crypto providing “fiat on and off ramps” as a service for wallets, crypto exchanges, and NFT platforms.  Makes perfect sense considering their payment API’s.

 

• Leading crypto exchange Coinbase partners with Mastercard to allow Coinbase customers to easily purchase NFTs using Mastercard credit and debit cards on the crypto exchange’s upcoming NFT marketplace, thus bypassing the cumbersome consumer-driven process of having to open a crypto wallet, buy crypto, than use it to purchase an NFT in an online marketplace.

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• Iroquois Federal (FDIC #29675; Total Assets of $767M) partners with Nymbus to launch their new digital-only brand, Hitched.

• H&R Block launches Spruce, a no-fee consumer mobile banking platform featuring a Mastercard debit card (issued by MetaBank) with cash back rewards, savings, early direct deposit access, credit score monitoring, overdraft protection (up to $20), and of course tax refund allocation.
  • A quick look into our FedFis FinTech Analytics© database shows that this compliments H&R Block’s existing financial services offerings that include Wave Money (no-fee SMB financial platform with Visa debit card issued by Community Federal Savings Bank) and the Emerald Card on the no-fee mobile MyBlock app (with prepaid Mastercard issued by MetaBank).

 

• Shopify launches their business banking platform, Shopify Balance business account within the online Shopify platform.  Features include next-day access to funding from Shopify sales, a Visa debit card, rewards, and money transfer / bill pay with no fees.  A nice compliment to the existing Shopify Capital and overall Shopify platform.

 

• In the meantime, per this Government Executive report, the USPS Banking Pilot has provided banking services to 6 (yes six) customers between Sept 13 and Jan 12 for a gross transaction total of $548.46 that resulted in fee income of $35.70 for the Postal Service.  Well, I guess that finally solves our unbanked problem (sarcasm) – LOL!!!!!

 

• Sultan Meghji, Chief Innovation Officer for the FDIC, resigns less than a year into the job.

 

• Fintech funding for the week:
  • Pinwheel (payroll API) raised $50M in Series B funding round at a $500M valuation just six moths after their $20M series A
  • Banyan Security (Zero Trust Network security platform) raised $30M in Series B round
  • Facet Wealth (hybridized tech / advisor financial planning firm) raised $100M in Series C funding round
  • 1Password (password management and security monitoring platform) raised $620M in Series C funding at a $6.8B valuation
  • iTrustCapital (crypto IRA software platform) raised $125M in Series A round at a $1.3B valuation – DANG that’s a big Series A!!!  The company states that they have grown from $2B in transaction volume to more than $4.5B in the last six months.   
  • Autograph (an NFT agency co-founded by Tom Brady) raised $170M in Series B.  While celebrity NFTs have had mixed results, Autograph is “essentially an agency go-between for celebrity athletes and entertainers looking to find a personal presence in the incredibly noisy NFT world” – basically an on-ramp if you will.  To me, this gets pretty interesting when you think about the new college rules allowing college athletes to make money by selling their name, image, and likeness (NIL) rights - basically the very definition of an NFT….  And Tom Brady certainly brings some legitimacy to these young athletes.   

 
 
Random Uncle Sean Stuff:

• I wonder how long it will be before we see manager level and above job postings that state “remote work experience required?”  It is certainly becoming a very unique skill set that is growing in demand.
• Is it weird that I still have my Christmas tree up?
• Okay – a couple of quick Dad Jokes:
  • I hear they aren’t making shortbread any longer….
  • My neighbor was having water issues so I sent him a “get well soon” card….
  • One snowman looks at the other snowman and says, “Do you smell carrots?”
  • The other day I grilled a chicken for two hours and he STILL wouldn’t tell me why he crossed the road!  😊

 
 
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.
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