Uncle Sean's Update - 5/17/24

​Happy Friday!!!
 
Running a little late this week, so let’s get straight to it! 🤠 Here is the Uncle Sean Update for 5/17/24:
 

• Let’s get the bad news out of the way first surrounding the nightmare middleware Synapse bankruptcy saga….  Sourcing TechCrunch here with a great write-up including a response from Evolve Bank & Trust….  Also crediting Jason Mikula and Fintech Business Weekly who has been covering this in great detail with superb accuracy for quite some time now – check out his latest excellent update of the Synapse disaster this week.  Here’s my TLDR notes:
  • 💩 (yes, I just used the poop emoji) - Ugh, the US Trustee filed an emergency motion to convert from Chapter 11 bankruptcy reorganization to Chapter 7 liquidation citing “gross mismanagement” of its estate so that losses were continuing with “little reasonable likelihood of reorganization;” and also cited that Synapse “inexplicably cut off access to its computer systems on a weekend” without notice forcing Evolve Bank & Trust to freeze payment and card activity due to lack of visibility.
    • If you want to dig deeper, you can access the Synapse Bankruptcy documents here (citing CA BK case # 1:24-bk-10646).
      • Meanwhile, I can only imagine that a newly reinvigorated CFPB (after the Supreme Court ruled this week that the CFPB funding structure is legal) is taking some serious notes as consumers do not have access to their funds held at fintech companies that were integrated with Synapse.  Yikes! 😬

 

• A bit of a nice CPI surprise this week as April CPI came in a little light at 3.4% YoY and 0.3% from March (expectation was 0.4%).  Core was 3.6% which was the lowest reading since April 2021.  CNBC has a good summary (love that YoY line graph of headline and core CPI). 
  • Any celebration should be slightly tempered as one month does not make a trend; and even Chairman Powell’s speech in Amsterdam was somewhat cautionary stating recent inflation data has been higher than anyone expected, and “we’ll need to be patient and let restrictive policy do its work.”
    • Yep - the last mile is almost always the most difficult.

 

• WOW – Visa reinvents the card announcing several new products geared for disruption in the digital age.  A couple of my favorites (pardon me while I completely geek out 🤓):
  • Tap to Everything – any device can now be a POS device….  You can also tap to add virtual cards into a wallet or app…  And my personal favorite – Tap to P2P, now that’s cool!!!
  • Pay by Bank – A2A driven by their Tink acquisition….  Visa Protect for A2A will likely be huge as well as instant payments continues to gain market acceptance.

 

• And here come the Visa use cases 😎 - Dwolla continues their push into Pay-by-Bank (aka A2A) – this week they announced integration with Visa to bring “advanced account verification capabilities to Dwolla’s A2A solution” empowering mid- to enterprise-sized businesses to receive payments via Pay-by-Bank.

 

• 👀 ModernFI announced the first ever deposit network for Credit Unions (😯 wow!!!); and also welcomes Rodney Hood, former NCUA Chairman, to its Board.

 

• Speaking of Credit Unions…..  This week brings another CU buying a bank.  Pima Federal Credit Union (Charter 7316; Total Assets $1.2B) to acquire Republic Bank of Arizona (FDIC 58271; Total Assets $279M) from RBAZ Bancorp, Inc. (FR 5591905).
  • For those keeping score, we are officially on track for a record year as this makes 8 announced CU acquisitions of a bank thus far in 2024 compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis).

 

• Avidbank (FDIC 57510; Total Assets $2.3B) has selected CorServ to launch a credit card platform for their commercial customers.

 

• ZSuite Tech is on a roll 🚀 and continues to make headlines again – this week comes with a pair of announcements:
  • Tru Treasury and ZSuite collaborate to launch ZSuite’s innovative escrow tool for Credit Unions.
  • Cornerstone Bank (FDIC 90282; Total Assets $1.6B) partners with ZSuite to provide ZEscrow digital escrow management platform to the banks commercial customers.

 

• Fifth Third announced the launch of Enhanced Payables powered by Paymode-X  (which is Bottomline’s business payments network) enabling Fifth Third business customers to streamline the payables process and enhance operational efficiencies. 

 

• Array gets to flex 💪 this week as their online privacy solution (Privacy Protect) now protects more than 4 million consumers with more than 200 million online records removed.  Nicely done!!! 😊

 

• Treasure Financial partners with Sequence to provide embedded investing for Sequence customers.  That Sequence platform is pretty cool 😎 – check it out at getsequence.io.

 

• Chime is launching MyPay, a new earned wage access service that will allow customers to access up to $500 of their paycheck before payday.  There doesn’t appear to be any mandatory fees but if a customer wants to receive the money instantly they will pay $2, otherwise for a one to two day turnaround it will be free.

 

• VantageScore announced that its newest credit-scoring model, VantageScore 4plus™ is now available for pilot for banks, fintechs and government lenders.  its new pilot uses open banking data from all major aggregator APIs and works for any credit report from Experian, Equifax or TransUnion.  Using the same scoring range as credit reports (300 to 850) means “most lenders will not need to adjust their credit/lending policies to use the new VantageScore 4plus credit score.”

 

• Notable FinTech funding for the week:
  • Aeropay (Pay-By-Bank solutions for businesses) raised $20M in Series B funding round.
  • Yendo (personal credit card secured by the customers equity in their car) raised $165M in capital consisting of $150M in debt plus $15M in equity.
  • Kudos (AI-powered smart wallet that recommends the right credit card to maximize rewards and cash back) raised $10.2M in Series A round.
  • Plenty (joint financial management platform for couples) raised $5M in capital.

 
 
Random Uncle Sean stuff:

• Okay – running late so straight to the Dad / Bad Jokes we go:
  • When one door closes, another door opens….  Other than that, it’s a pretty good car! 😊🚗
  • More wealth management tips – invest in tennis balls as they have a high rate of return!
  • Aunt Patty said I’m a Trophy Husband…  More like a Participation Trophy, but a trophy nonetheless!!!! 🏆🤪
  • They are called “hemorrhoids” because the term “asteroids” was already taken….  LOL 😝🤣  Okay – I’ll see myself out now!!!! 🤠

 
 
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.