Uncle Sean's Update - 7/12/24

Happy Friday!!!
 
Happy to be back after an extended (and HOT) Independence Day holiday!!!  Lot’s of great stuff to dig into, so let’s jump right in.  Here is the Uncle Sean Update for 7/12/24:
 

• A bit of good economic news this week as June CPI actually declined 0.1% for the month (first time that prices have fallen since 2020 – Holy Moly) after a flat reading in May; and 3.0% over last year.  Core for the month was +0.1% after rising 0.2% in May; with 3.3% over last year (lowest since April 2021).  CNBC has a good summary as always.
  • Declining inflation metrics coupled with a cooling labor market (June unemployment rate increased to 4.1%, its highest level since November 2021) is giving hope for potential FOMC interest rate cuts as we move into 2H2024.  🙌🎉
    • Additionally, if you want to get really deep into the weeds…  The Federal Reserve Board released their semiannual Monetary Policy Report to Congress.

 

• Could this be good news (finally) related to the Synapse bankruptcy 💩 disaster???  CNBC is reporting that banks in Synapse mess make progress toward releasing deposits to fintech customers – potentially in a matter of weeks; and with hopes of a full reconciliation after the banks hired a former Synapse engineer late last month to unlock data.
  • Fingers crossed… 🤞

 

• 👀 SRM (Strategic Resource Management) has acquired Kenneth J. Sole & Associates, “a trusted banking technology consulting firm specializing in core processing platform conversion, migration support, and outsourced leadership for community, regional, and national banks as well as a myriad of credit unions.”  NICE!!!! 🚀

 

• Very happy to see this - RiskScout announced the launch of their comprehensive BSA / AML solution for financial institutions.  The timing is impeccable as almost all regulatory enforcement action / consent orders I have seen over the last year contained BSA / AML verbiage.

 

• A sign of the times???  Target announced they will no longer accept personal checks as a form of payment due to “extremely low volumes.”    
  • Honestly, I am a little surprised that we are not seeing more of this considering the recent rise in check fraud and so many other alternate forms of payment available…  Especially considering the Debit Card was theoretically (arguably anyway) supposed to replace cash and checks. 
    • Side note - did you know that the debit card was first piloted way back in 1966 by The Bank of Delaware (58 years ago 😲)???  Greenlight has a good quick read on the history and evolution of the debit card from back in February of this year. 😊
      • Ah, the snail pace 🐌 of consumer adoption of new financial services…. 🤷‍♂️

 

• And another incredibly timely product launch with so many ransomware cyberattacks - Sonar (fraud consortium powered by Sardine) has launched "Red Flag" service “to help banks and fintechs quickly verify if their customers’ data has been compromised in a breach or used for fraudulent activities, such as opening accounts, applying for loans, and making fraudulent online purchases.” 

 

• 👀 More regulatory concerns for BaaS Sponsor Banks (asset / lending side rarity) – shockingly, this one does NOT involve BSA / AML….  Enter CRA to the regulatory BaaS party…  The FDIC downgrades Forbright Bank's CRA score to the rare NI.  Keeping in mind that this is from a credit-builder fintech relationship that ended in April 2022; and the related originations made up less than 0.05% of the bank’s assets – according to the article.
  • Beware that this is not the first time CRA has been regulatory emphasis for BaaS Sponsor Banks.  Recall 2022 (actually released 2/1/23) Transportation Alliance Bank (TAB Bank) CRA Performance Evaluation of NI based on “illegal credit practice” (UDAP) of one of its fintech lending partners.

 

• Payments, payments, payments…:
  • RTP flex 💪!!!  RTP® network by The Clearing House sets 2nd Quarter Records including:
    • Single day record of over $1B in instant payments on June 28th; and 2Q record totals of 82M transactions and $55B total payment volume. 💥
  • Onbe partners with ZSuite Tech to provide “an embedded digital disbursement option for the more than 90 U.S. banks that use ZSuite Tech, allowing them to offer a simplified and cost-efficient mechanism for issuing payments through popular methods including virtual cards, ACH, push to card and mobile wallets.” 
  • Galileo adds wire transfer capabilities for its fintech customers via Fedwire and Community Federal Savings Bank.
  • MassPay partners with Cross River Bank to expand access to domestic B2B and B2C instant payments for MassPay’s partners and clients.

 

• Andrews Federal Credit Union (Charter 5754; Total Assets $2.6B) selects Blend for new digital account opening solution.

 

• Speaking of credit unions…..  I have some M&A rumor mill for you this week (Uncle Sean typically avoids rumor reporting, but this looks legit)…  Arrha Credit Union (Charter 61189; Total Assets $141M) is considering merging with The Pittsfield Co-operative Bank (FDIC 26393; Total Assets $382M) according to a legal ad soliciting feedback from credit union members. 

 

• And more credit union developments as ModernFi announced a partnership with Members Development Company (network of 80 large credit union owners) to create the first deposit network for credit unions to provide increased NCUA insurance – WOWZA!!!!

 

• Notable FinTech funding for the week:
  • Accend (onboarding and risk assessment for B2B FinTech) raised $3.2M in Seed funding.
  • Earned Wealth (financial services firm focused exclusively on the needs of medical professionals) raised $200M in capital.
  • Niva (global business identity verification platform – KYB) raised $3.3M Seed round.
  • DigniFi (automobile repair financing) raised $175M in capital.

 
 
Random Uncle Sean stuff:

• NASCAR unveils its first electric racecar sporting a whopping 1,300 HP!!!  I’m not 100% sure how I feel about that as the smell of gas and oil enhances the race experience (for me anyway), but I am trying to keep an open mind.
• After Hurricane Beryl knocked out power for over 2 million customers in the greater Houston area, the Whataburger app has become the unlikely power outage map after frustrations with the local utility company that does not have an outage map.  Yep – just one more reason why Texans love our Whataburger!!! 🍔
• And the moment everyone has been waiting for – the Dad / Bad Jokes:
  • It was so hot and humid here in Texas over the fourth of July holiday weekend that you could drink the air through a straw! 🥵
  • Uncle Sean spent so much money at the fireworks stand that the guy behind the counter gave me a high-four…. 🙄🤐
  • This one comes in from a young fan (shout out to 13 year old Zoe)…  What does a baby microchip call its Father?  Data… 😊
  • Little known fact – Tonto’s banker was The Loan Arranger… 🤠
  • And to wrap up the week…  Aunt Patty and I sincerely want our children to have all of the things we couldn’t afford….  Then we’re going to move in with them – LOL!!!! 😂🤣

 
 
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.