Uncle Sean's Update - 12/16/22

​Happy Friday!!!
 
Happy Holidays – I LOVE this time of year!!!  SPOILER ALERT – someone has a birthday coming up this weekend….  Here is the Uncle Sean Update for 12/16/22:
 

• They’re at it again!  This week the BHB BaaS Association announcement highlights the release of their newest whitepaper - Protecting the Consumer with Strict Compliance.  Do these folks ever sleep?  😊

 

• It’s FED WEEK!!!  As expected, the FOMC voted to increase rates by 50 basis points to bring the Fed Funds rate to a range of 4.25% - 4.50% and signaled that future interest rate increases will be necessary.  Before I completely geek out too much (because you know I will), here are the important links:
  • Summary of Economic Projections (SEP “dot plot”); Transcript of Chair Powell's Press Conference (23 pages); Full video (YouTube) of FOMC Press Conference (45 minutes)
    • And of course here comes some Uncle Sean “off the rails” commentary, so feel free to scroll down 😊:
      • Chairman Powell was very focused on the job market stating, "There's an imbalance in the labor market between supply and demand," noting that it will take a "substantial period" to get the labor market back in equilibrium.  "There will be some softening in labor market conditions," Powell said. "And I wish there were a completely painless way to restore price stability. There isn't. And this is the best we can do."
        • This is very relevant as we look at his comments related to non-housing related core services.  “… something like 55 percent of the index, PCE core inflation index, is non-housing-related core services. And that's really a function of the labor market, largely, at the biggest cost by far in that sector is labor.”
      • Lastly, Chairman Powell made several refences to the SEP which of course is not policy, but a median of assumptions from the FOMC based on current economic data as it stands today.  Key Points:
        • Fed Funds rate projection of 5.1% for 2023 which isn’t too terrible considering that “could” conclude soon with 50 bps on Feb 1 and 25 bps on Mar 22 (which is an SEP meeting).  However, per that same data, rates could remain elevated until the end of 2024….  I guess time will tell…
        • Median Unemployment projection of 4.4% (which is still historically low).

 

• I don’t know how, but just in case you missed it….  Sam Bankman-Fried (SBF) was set to testify remotely under oath to the House Financial Services Committee – but ole SBF didn’t quite make the venue (LOL) as Bahamian authorities arrested him based on a request by the U.S. Government and charged by three different US authorities - the Department of Justice, the SEC, and the CFTC.
  • The DOJ has charged him with an eight-count indictment including fraud, money laundering, and campaign finance offences.  At a news conference on Tuesday, U.S. Attorney Damian Williams in New York called it “one of the biggest frauds in American history,” and said the investigation is ongoing and fast-moving.  Here is the full DOJ Indictment document.
  • Commodity Futures Trading Commission (CFTC) also filed suit on Tuesday citing Fraud and Fraudulent Misstatements - CFTC Complaint.
  • And the SEC also filed charges against SBF for orchestrating a scheme to defraud equity investors of more than $1.8 billion.
  • SBF was subsequently denied bail (apparently the “depressed vegan with allergies” legal defense doesn’t hold water – LOL!!!) and will remain in jail until his extradition hearing on Feb 8th.  Happy New Year SBF….  😲

 

• They say timing is everything…  In the middle of all this FTX / SBF drama, Binance temporarily halted withdrawals of USDC during a “token swap” while investors all over the world literally threw up for about 8 hours until withdrawals commenced.  WHEW!!!! 
  • But wait, there’s more….  Per this CNBC article, accounting firm Mazars Group has now suspended all work with its crypto clients, according to its former client and the world’s largest crypto exchange, Binance.  This comes just days after Mazars Group released “proof of reserve” reports for several digital asset exchanges, including Binance.

 

• Shout out to Evermore Bank as they are open for business this week after receiving their charter approval earlier this year.  Check them out at evermorebankfl.com.

 

• Galileo (wholly owned subsidiary of SoFi) announced the launch of Galileo Deposit Switch powered by Atomic’s infrastructure for digitally connecting with payroll accounts.

 

• SoFi announced Pay in 4 launch allowing SoFi Bank customers to split purchases of $50-$500 into four interest-free installments via Mastercard Installments program during the payment process online or in store.

 

• AMC Theatres® (NYSE: AMC and APE) jumps into the embedded finance picture (see what I did there) by announcing the upcoming 2023 launch of the AMC Entertainment Visa Card as an open-loop credit card powered by Deserve and issued by Celtic Bank.

 

• Another week and a pair of CU / bank acquisitions:
  • Dort Financial Credit Union (Charter 68708; Grand Blanc, MI; $1.4B Total Assets) announced an agreement to acquire Flagler Bank (FDIC 35218; West Palm Beach, FL; $489M Total Assets).
  • LGE Community Credit Union (Charter 68581; Atlanta, GA; $2.1B Total Assets) announced an agreement to acquire Greater Community Bank (FDIC 34138; Rome, GA; $322M Total Assets).
    • These two announcements brings us to 14 announced acquisitions of a bank by a CU so far for the year.  This compares to 13 in 2021, 7 in 2020, and 16 in 2019 (Source: FedFis).

 

• And more CU news….  The NCUA announced that they placed Richmond City Employees FCU into conservatorship this week (Cert 14798; Total Assets $8M) citing unsafe and unsound practices.

 

• Notable FinTech funding for the week:
  • DataVisor (online fraud detection and risk management software for financial services) raised $40M in Capital described as a strategic growth round.
  • Mad Capital (alt lender for agriculture) raised $4M Seed round (no pun intended)
  • Nilus (no-code financial ops automation platform) raised $8.6M Seed round “to solve the payments data problem with the first plug-and-play financial operations platform.”
  • Pocketnest (white-label financial wellness platform) raised $2.6M in capital citing explosive growth over the last year.

 
 
Random Uncle Sean Stuff:

• Hey, hey, hey – it’s our very own favorite CEO and Fintech Cowboy, Dave Mayo’s Birthday this weekend!!!!  Happy 30th (cough, cough, cough) Birthday Davey!!!!
  • I like to remind everyone EVERY SINGLE YEAR that Dave is older than me – LOL!!!  Although some days it certainly “feels” like I am starting to catch up!  Here is a good (and true) story from when we were younger:
    • Circa mid 1970’s with double digit inflation resulting in skyrocketing prices, unemployment, and gas shortages (sound familiar?)…  Mom had taken a job at JCPenney’s to help make ends meet….  I was around 6 or 7 (I think) and Dave was a few years older than me (LOL)…  Anyway, I was sick and had to stay home from school.  Mom couldn’t miss work because we needed money for groceries and gas; so Dave stayed home from school to make sure I didn’t burn the house down, again (which is another story altogether).  Anyway, I wanted to play with the G.I. Joe toys – these were the old school 12” tall action figures from the 1960’s, not the small wimpy ones.  And they are “action figures” not “dolls” LOL!!!!  Dave said he would play with me but made me promise I would never tell anyone that he was 15 years old and playing with dolls (errrr, “action figures”) because it wouldn’t look cool to all his friends.  It was a great day even though I was sick.  45+ years later and I never told anyone…  Well, until today with this newsletter going out to about 13,000 subscribers - LMAO!!!!!  HAPPY BIRTHDAY DAVEY!!!!  I’ll play with G.I. Joe “action figures” with you anytime!
• And of course Uncle Sean is obligated to tell some birthday / aging themed Dad jokes now:
  • What did the pirate say on his 80th birthday?  “Aye matey.”  Oh C’MON – you know that’s a GREAT one!!!  😝
  • Statistics show that people that have the most birthday’s live the longest.
  • Do you know what rhymes with Birthday?  Alcohol!
  • Aunt Patty proclaimed that “ladies that have met a minimum senior age status” should be forever referred to as Queen-agers – I like it!!!! 😊

 
 
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.