Uncle Sean's Update - 3/24/23

​Happy Friday!!!
 
Don’t forget to tell your friends that they can sign up here to have the Uncle Sean Update delivered straight to their inbox every Friday (all the cool kids are doing it - LOL).  Here is the Uncle Sean Update for 3/24/23:
 

• Shout-out to Sunrise Banks (a CDFI) as the latest innovative institution to join the BaaS Association!!!!

 

• It’s FED WEEK!!!  As most everyone expected, the FOMC raised rates for the ninth time in a row by 25 basis points bring the target Fed Funds rate to 4.75% - 5.00%.  Some key observations:   
  • The U.S. banking system is sound and resilient.  Job gains have picked up, unemployment rate remains low, and inflation remains elevated.
  • Guidance has changed from ongoing hikes to some policy firming may be appropriate.  Recent events in the banking system are likely to result in tighter credit conditions for households and businesses, such a tightening in financial conditions would work in the same direction as rate tightening. 
  • Going forward the FOMC “will be focused as always on the incoming data and the evolving outlook, and in particular on our assessment of the actual and expected effects of credit tightening.”
    • Here is the written transcript (23 pages) of Chair Powell’s press conference; and here is the video (43 minutes).
    • Here is the Summary of Economic Projections (“dot plot”) showing the same target of 5.1% year-end rate projection as the last FOMC meeting. 

 

• This is fantastic – DCI (yep – the core processor that has been gobbling up market share) announced the launch of GoDeposits.  “By successfully eliminating the need for middleware, GoDeposits eradicates the need for Fintechs and financial institutions to work around the core processor. Today, DCI's partners are empowered to track transactions through DCI, ruling out the once-essential demand for third-party involvement. No friction in the 90-second application, 100% compliance, all KYC, options for funding, and multi-branding—all through one instance of core and no middleware.”
  • Some cool points here:
    • Removing that middleware / third-party infrastructure layer is HUGE for both banks and fintechs!  This effectively takes a link out of the monetary supply chain for DCI Sponsor Banks; and that helps by 1) reducing risk while enhancing compliance, 2) reducing cost, and 3) enables DCI banks to be BaaS/Sponsor Bank Ready for new account / deposit onboarding.
    • This is a shining example of what Uncle Sean continues to refer to as, “bringing Banking-as-a-Service back to the Bank.”  I love it!!! 😊

 

• The SEC has issued a Wells notice to Coinbase as a precursor to potential charges related to potential violations of U.S. securities law – specifically regarding staking services.  Coinbase’s CEO Brian Armstrong posted on Twitter that his company is “right on the law, confident in the facts, and welcome the opportunity for Coinbase (and by extension the broader crypto community) to get before a court.”
  • Uncle Sean smells settlement in the air and potential offshoring of Coinbase.  Time will tell….

 

• American Express is finally shutting down Kabbage Checking (powered by Green Dot Bank) as of June 30, 2023.
  • To be clear, this move has been scripted for a while since AMEX announced Business Blueprint banking solution for SMBs (includes business checking / AMEX debit card, line of credit, ability to accept online card payments, and expense / cash flow insights).

 

• Pinwheel (payroll API for direct deposit switching) announced the launch of Direct Deposit 2.0 expanding from payroll to now include direct deposit for gig wage (contractor) and benefit payment platforms such as unemployment and SSI.

 

• NYCB’s Flagstar Bank, NA (FDIC 32541, $90B Total Assets) acquired substantially all deposits and certain loan portfolios of Signature Bridge Bank, NA.

 

• ICYMI, the Economic Report of The President was submitted to Congress this week – it’s 513 pages and no, I did not read it all – LOL.  However, Chapter 8 caught my attention as it is titled Digital Assets: Relearning Economic Principles – and it’s not very positive.  Specifically on page 238, “Indeed, crypto assets to date do not appear to offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, improve financial inclusion, or make payments more efficient; instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value.”
  • WOW – In my best Jim Carey / Ace Ventura voice, “alrighty then!!!”  😲

 

• CLA (CliftonLarsonAllen LLP), the eighth largest professional services firm in the U.S., teamed up with KlariVis to be an exclusive nationwide provider of the KlariVis dashboard and analytics solution for the financial services industry.

 

• Fiserv and Central Payments (the BaaS subsidiary of Central Bank of Kansas City) partner together to help fintech brands and financial institutions create innovative debit programs.

 

• Homebot (consumer RE home equity insight portal) announced the acquisition of Quo Finance, a mortgage app for first time home buyers.

 

• Coming to America – Pay.com partners with Cross River to expand to the U.S. and create an all-inclusive payments platform for business and merchants.

 

• Notable FinTech funding for the week:
  • Rippling (business workforce management platform) raised $500M in Series E funding round – this blog timeline from Parker Conrad (co-founder and CEO) as fallout from SVB is amazing and worth the read.
  • Rain (EWA) raised $116M in capital consisting of $66M in Series A equity funding and $50M in debt.
  • Caramel (digital checkout and authentication platform with the goal of transforming private party and independent dealer car sales) raised $12M in Seed funding – check them out at drivecaramel.com.
  • Beam (construction GC / subcontractor payment platform) raised $4M Seed Round .

 
 
Random Uncle Sean Stuff:

• I ran across these the other day while I was surfing the internet – OOPS – I mean “working” – LOL!!!!  😝  As a parent, these are nothing short of hilarious…  Words of wisdom from children:
  • Never trust a dog to watch your food. – Patrick, age 10
  • When your Dad is mad and asks you, “Do I look stupid?” don’t answer him. – Michael, 14
  • Never tell your Mom her diet is not working.  Michael, 14
  • Stay away from prunes.  Randy, 9
  • Never pee on an electric fence.  Robert, 13
  • When your Mom is mad at your Dad, don’t let her brush your hair.  Taylia, 11
  • Don’t sneeze in front of Mom when you’re eating crackers.  Mitch, 12
  • Puppies still have bad breath even after eating a tic tac.  Andrew, 9
  • Never hold a dust buster and a cat at the same time.  Kyoyo, 9
  • You can’t hide a piece of broccoli in a glass of milk.  Amir, 9
  • If you want a kitten, start out by asking for a horse.  Naomi, 15
  • Felt markers are not good to use as lipstick.  Lauren, 9
  • Don’t pick on your sister when she’s holding a baseball bat.  Joel, 10
  • When you get a bad grade in school, show it to your Mom when she’s on the phone.  Alyesha, 13
  • Never try to baptize a cat.  Eileen, 8

 
 
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.