Uncle Sean's Update - 6/30/23

Happy Friday and Happy Independence Day next week!!!  🎆🧨🎇
 
Goodbye to the first half of 2023 – Here is the Uncle Sean Update for 6/30/23:
 

• Couple of quick Fed updates this week:
  • The Fed Reserve published the results of their annual bank stress test with the punchline that “all 23 banks tested remained above their minimum capital requirements.”
    • Generally, this clears the way for dividends and share buy backs for the nation’s largest publicly traded banks, but I have been reading that some analysts are thinking banks may pare back in anticipation of heightened regulatory capital requirements on the horizon – I guess we’ll know more pretty soon as ex-dividend date announcements start coming out.
  • The Fed Reserve also announced a list of 57 early adopter organizations that have “completed formal testing and certification on the FedNow Service in advance of its launch in late July.”
  • At the 2023 ECB forum this week, Fed Reserve Chairman Jerome Powell reiterated his “higher for longer” interest rate stance stating that inflation is unlikely to hit the Fed’s 2% target until 2025; and that two more rate hikes are very likely this year.
    • 2025???  Holy Cow!!! 😲

 

• 👀 Worth paying attention to from a credit quality standpoint…  In a 6-3 decision, the Supreme Court struck down the President’s $400B student debt forgiveness plan citing the Administration did not have the authority to do so (would need Congress approval).
  • Hoping this does not result in additional personal loan delinquencies / consumer based asset quality concerns as student loan payments are set to restart in October.  😬

 

• 👀 Also a timely delivery related to credit / asset quality as we watch CRE exposures with a careful eye…  The FDIC, Federal Reserve, OCC, and NCUA issued an Interagency Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts.

 

• PacWest (Nasdaq: PACW; Bank subsidiary is Pacific Western Bank), consistent with their previously announced strategy to focus on relationship-based community banking, announced the sale of a $3.54B portfolio of Lender Finance Loans to Ares Management Corp.

 

• Texas Capital Bank (Nasdaq: TCBI) has partnered with Extend in order to offer virtual card issuance and spend management platform for business customers.

 

• Coastal Community Bank (BaaS Sponsor Bank; Nasdaq: CCB) announced they have launched ZEscrow powered by ZSuite Tech with the goal of leveraging ZSuite’s digital escrow sub-ledgering solution to enhance the bank’s commercial deposit growth.  Those folks over at ZSuite Tech have been on a roll - nice work!!! 😊

 

• Hate to see this, but…  Following up on last week’s Cease and Desist order, Nevada’s Financial Institution Division has placed Prime Trust into receivership.

 

• The CFPB hits ACI Worldwide with a $25 million civil money penalty as a result of a 2021 botched electronic payments test that effected nearly 500,000 accounts by initiating $2.3B in unauthorized mortgage debit withdrawals.

 

• Sendwave (international money transfer) announced the launch of Sendwave Pay for U.S. customers including a mobile app and Visa Debit card.

 

• Another week, another fraud naughty list consortium – which is a good thing as we move more and more into real-time / instant transfers (Tanner Mayo has been saying it for about 4 years now, “real-time money movement equals real-time fraud”).  Sardine announced the launch of SardineX, a 314b real-time fraud data consortium consisting of banks, card networks, payment processors, fintechs, and decentralized finance platforms, via an API-enabled risk analysis and transaction feedback platform.  For more info – check out the SardineX data consortium blog.

 

• Socure (in the red-hot digital identity verification space) has acquired Berbix for approximately $70M in cash and stock; and announced the launch of their Predictive Document Verification (DocV) 3.0 solution.

 

• Ramp (corporate card and finance automation) has acquired Cohere.io, an AI powered customer support tool.

 

• Kind of “news / not news” since this was originally announced last Nov, but hey – they are in beta now…  The Square Credit Card (running on the AMEX network) features a credit limit “determined by the sales a seller processes through Square.”  Square is also expanding on Square Loans to include a monthly installment payment option as opposed to just daily repayments on sales settlements.

 

• Notable FinTech funding for the week:
  • Unit21 (risk and compliance platform for FI’s, fintechs, neobanks, etc.) raised $45M in Series C funding round.  Check out this blog highlighting their Fintech Fraud DAO consortium that now “covers more than 10% of adult consumer transactions in the U.S.”
  • JustPaid (AI powered finance company) raised $3.5M Seed round.
  • Cart.com (end-to-end e-commerce platform) raised $60M in Series C round at a $1.2B valuation.
  • Maza (neo immigrant bank utilizing ITIN as identity check) raised $8M Seed Round.

 
 
Random Uncle Sean stuff:

• Ah, the 4th of July was always (and still is) one of Uncle Sean’s favorite holidays!!!!  So I’m cutting this short so I can fire up the grill, ice down the beverages, and blow some stuff up for the next four days - WOOHOO!!!!! 🤠
• Okay – some real quick Dad Jokes:
  • If a pig lost his voice, is he now “disgruntled…???”
  • What's a lawyer's favorite drink?  Subpoena colada….
    • Yep – here it is so you can have it in your head all day - Escape (the pina colada song) – LOL!!!!
  • I have a joke about trickle down economics, but 99% of people won’t get it…  I laughed a little too hard at that one!!! 😆🤣
  • And lastly for my Accounting and Payroll folks out there….  It’s called gross pay because it’s disgusting to see what you could’ve made…  🙄

 
 
Have a GREAT Independence Day holiday 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.