Uncle Sean's Update - 3/1/24

Happy Friday!!!
 
🙏 Our thoughts and prayers are with those individuals and communities battling the wildfires in the Texas Panhandle and now Oklahoma as the Smokehouse Creek Fire has expanded to approximately 1.1M acres and is only 3% contained while strong winds and heat are forecasted again this weekend.  Here is the Uncle Sean Update for 3/1/24:
 

• Credit goes to Jason Mikula for breaking this story early on LinkedIn (pretty sure he has some kind of spiderman superpower as he continues to break news stories early - LOL).  In another blow to the middleware model, Treasury Prime has laid off half of its staff as they strategically pivot from the middleware/connector model to selling their software directly to banks only.
  • “This move solidifies the idea that the fintech [is] not our client, it’s directly the bank’s client. The person who manages that relationship is the bank, and according to our banks — pretty much 100% of them — that is exactly what all the regulators want. They want to be able to say like, ‘Look, it’s been managed by the bank, who is the chartered institution, who cares about compliance, who knows how to manage this problem, as opposed to some intermediary,’” Dean said (bold emphasis added by Uncle Sean).

 

• ICYMI, the Federal Reserve released their semi-annual Report to Congress related to monetary policy, economic developments, and prospects for the future.  Some key highlights:
  • Standard lingo (some cool graphs, but overall, this is me yawning 🥱) – inflation has come down considerably but is still too high, labor markets remain tight but is beginning to ease, monetary policy has been restrictive but recent models show a more balanced approach (page 43) with SEP (page 45) looking at possible rate decreases as monetary policy moves slightly towards neutral to accommodative.
    • Interesting note on page 3 where the FR states they intend to “slow and then stop reductions in its securities holdings when reserve balances are somewhat above the level that the FOMC judges to be consistent with ample reserves.” 
      • 👀Hmmm – I can’t help but wonder what the actual timing of that “QT end game” looks like in conjunction with SEP (dot plot) rate cut forecasts.
  • Also, that median monthly mortgage payment graphic on page 19 is an eye opener with an increase of about 65% from pre-pandemic levels related to newly originated home-purchase mortgages. 😬  Basically, for those that purchased since the beginning of 2022, it was largely painful.  But I don’t have to tell you that as you already know!!!

 

• Experian announced it will now include Apple "pay-in-4" BNPL loan information on consumers’ credit reports with a BNPL designation.  While this reporting begins on March 1, “the information won’t be factored into existing traditional credit scores but may in the future as new credit scoring models are developed.”
  • Uncle Sean is happy to see this as a good start.  I have been critical of some BNPL in the past as only reporting negative credit info (missed / late payments) while not giving credit to on-time payments.  Keep in mind that BNPL is not a legal term, so applications vary significantly by provider such as: soft versus hard credit pull initially, revolving LOC versus installment loan (credit utilization implications), short-term versus medium or even longer-term, etc.

 

• ZSuite Technologies (ZEscrow) is now available via AppMarket from Fiserv as a pre-integrated solution for those FI’s using the Premier® account processing platform from Fiserv.  Nice!!! 🚀

 

• Quaint Oak Bank (FDIC 35497) has selected Finzly to modernize its payments infrastructure and embedded business banking by consolidating ACH and domestic and international wire transactions onto Finzly’s Payments Galaxy platform.

 

• Socure (digital identity verification and fraud prevention) partnered with Trustly to offer merchants and fintech companies “a streamlined onboarding and guaranteed Pay by Bank solution.”
  • Recall earlier this month where Trustly announced a partnership with MX to deliver “clean and categorized transactional data to Trustly’s merchants, helping to inform decision-making and deliver personalized offers and rewards.”

 

• More Pay by Bank headlines as Dwolla has launched their new Open Banking Services that extends “Dwolla’s account-to-account (A2A) offering to include instant account verification, balance checks and fraud mitigation” for mid- to enterprise-sized businesses through Dwolla’s single API.
  • Is it just me or does anyone else’s eye twitch just a little when seeing the acronym “A2A”??? 🤠 Probably my age (not exactly a spring chicken here), but my mind immediately thinks intrabank transfer from checking to saving as opposed to merchant focused C2B Pay by Bank transactions.  LOL!!!!

 

• Marqeta announced a new partnership with AffiniPay to launch MyCase Smart Spend, a spend management solution for law firms to manage and track expenses utilizing the LawPay Visa SMB revolving credit card which is embedded in the MyCase platform.

 

• Sila partners with Trice to further power Sila’s ACHNow single API that links RTP (The Clearing House), FedNow, and Sila’s Instant Settlement for real-time money movement.
  • “Businesses can submit a standard NACHA file and ACHNow will intelligently route each transaction to either RTP or FedNow and if neither of those rails can support the transaction then Sila's Instant Settlement product is utilized to clear the transaction.”

 

• Orum announced they are now live with FedACH and adding FedNow + FedWire services as part of Orum’s new money movement API, Deliver.  Orum’s API solution now delivers access to FedNow, RTP, Same Day ACH, ACH, and Wires.

 

• 👀 California DFPI entered into a consent order with Chime that includes a $2.5M penalty and orders Chime to improve customer service standards due to unfair complaint handling.
  • Just a friendly reminder from Uncle Sean that complaint management is an area that BaaS Sponsor Banks need to continually monitor.

 

• Wedge introduced the Wedge white-label programmable payments platform enabling banks and CU’s to issue advanced debit cards, offering the ability to use the “most efficient payment method available at every point of purchase, physically or digitally.”

 

• Dora Financial has partnered with InComm Payments to allow their banking app users to make cash deposits at 88,000 retail locations via InComm Payments’ Cash Payments network.
  • Dora is a really cool and uniquely structured fintech to me as this is a CUSO sponsored by USAlliance Financial showing how CU’s can also directly participate in the fintech space. 😊

 
 
Random Uncle Sean stuff:

• WooHoo – we made it to March and Spring (and allergies) is in the air!  The transition from Winter (ugh February) to more tolerable Springtime and the rebirth of nature.  To me, Spring brings the excitement of anything and everything outdoors - gardening (pleases my OCD itch), more fishing, and early Spring flowers / trees.  I really like the blooms of Dogwoods, Redbud, and Lily Magnolia (a local favorite here in Northeast Texas Pineywoods).  Heck, I’m even looking forward to the familiar smell of freshly cut grass (although I reserve the option to complain about that and the excessive heat in about 4 months – LOL).
• Tis the Season for March Madness with the 2024 NCAA Basketball Tournament.  Don’t forget to keep up with the ESPN Bracketology updates until Selection Sunday (March 17) for Men's Bracket Watch and Women's Bracket Watch.

• And here they are – the Dad / Bad Jokes for the week:
  • I don’t procrastinate….  I intentionally wait until the last possible minute because then I will be older, and therefore wiser…. 😉
  • People with too many magazines have issues, but those with math books have real problems…. 🤓
  • And finally, Uncle Sean dishes out some solid gold right here… 
    • Anyone else notice that the “&” symbol looks like a stick figure scooting their butt across the floor???  It gets worse if you italicize it – “&” as it almost implies motion….  Yeah – you’ll be stuck with that image forever now…  Your welcome! 🤣😂

 
 
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 [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.