Uncle Sean's Update - 7/26/24

​Happy Friday!!!
 
Wow – another very exciting week with so much to cover!!!  Here is the Uncle Sean Update for 7/26/24:
 

• Right off the bat we give a big high-five to North Bay Credit Union as the latest innovative institution to join the BaaS Association with the goal of responsible innovation in a safe and sound manner to the benefit and protection of the end consumer.  BooYah!!! 😊

 

• 💥 Speaking of BaaS (and for those seeking additional detail on TPRM)…..  The Federal Reserve, FDIC, and OCC issued joint guidance this week.  The first is a reminder of the risks associated with Banks’ Arrangements with Third Parties to Deliver Bank Deposit Products and Services (only 11 pages, 3 of which are footnotes and citations) – highlighting examples of risk management practices by banks to manage such risks (emphasizing existing guidance).  The second is Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses (32 pages with detailed questions for the RFI beginning at the end of page 25).  My quick takeaway (not that anyone asked 😊):
  • Both of these docs are easy and quick reads.  Check them out.
  • If you were of the opinion that regulators were far behind related to knowledge of BaaS operations, I can assure you they are pretty well versed now.
  • These documents (in my opinion) certainly appear to be written in the blood of Synapse and Evolve Bank & Trust.  While they do not mention the companies specifically (of course), they are zeroed in on “intermediate platform provider” as a differentiator to the broader all-inclusive term of middleware – also referencing the connector model / intermediate platform provider as “aggregation layer.” 🎯

 

• Of course you know that Uncle Sean can’t pass up an opportunity to talk about macroeconomics – so pardon me while I completely geek out! 🤓  This week the BEA released the Advanced Estimate of real GDP of 2.8% for 2Q, up from 1.4% in 1Q.  Don’t get too excited yet as this is the early advanced estimate (there are always 3 versions of GDP released for the quarter, each a month apart – Advanced, Second Release, and Final).  However, this advanced release is important as some of the last economic data before the FOMC meeting next week, where most estimates are the Fed holding rates steady in July, with cuts likely in Sept.
  • That same report shows PCE (the Fed’s preferred inflation metric) declining to 2.6% for 2Q, down from 3.4% in 1Q;  with Core PCE coming in at 2.9%, down from 3.7% in 1Q.  CNBC has a good summary as always.
    • Some more interesting info regarding treasury rates from a supply & demand standpoint….  Reuters is reporting that the U.S. Treasury Department is likely to announce early next week that it keep most auction sizes steady over the coming quarter, offering the bond market some relief after recent large increases.  However, additional expansions are expected down the road as fiscal trajectory worsens. 
      • 😉 Keep that in your securities / interest rate management playbook…

 

• Hey – check out our friends at Atomic as they continue to CRUSH it 🚀!!!  This week Atomic announced their collaboration with Fifth Third Bank (NASDAQ: FITB; $26B Total Assets) to leverage Atomic’s cutting edge Deposit (switch) solution within its Fifth Third Momentum Banking® products and mobile app. Very nice!!!

 

• 👀 And more cool products….  Set to launch in Q4 2024, R&T introduces their new Certificate of Deposit Marketplace Exchange℠ (CDMX) Program for FI’s.  The upcoming program offers: access to expand deposit insurance through CDs; availability to individuals, businesses and municipalities; and an online portal for ease of transaction handling and reporting.   

 

• COCC announced its partnership with FirstData to offer the Clover® point-of-sale card processing solution to enable COCC’s community of banks and credit unions to enhance the payment experience for their consumers worldwide.

 

• MANTL announced their integration with Q2's Digital Banking Platform via the Q2 Partner Accelerator Program.  “This collaboration integrates MANTL Consumer Deposit Origination and MANTL Business Deposit Origination with Q2’s Digital Banking Platform to deliver a seamless account origination and onboarding experience for bank and credit union staff, customers, and members.” 

 

• Marqeta (NASDAQ: MQ) becomes the first issuer processor in the US certified for Visa Flexible Credential; and announced they are working with Visa and Affirm to offer multiple types of payment options on a single card including debit, credit, “pay-in-four” BNPL, or even pay with rewards points.
  • As previously announced back in May, Visa Flexible Credential is live in Asia and will be launching with Affirm in the US later this summer.

 

• ACI Worldwide and Worldpay have announced an extension of their longstanding partnership with ACI continuing to provide critical infrastructure to Worldpay.  If it ain’t broke – don’t fix it!!! 😊

 

• Greenlight (family banking app focused on financial literacy for kids) partners with Bank of Clarke in Virginia (FDIC 6123; Total Assets $1.8B) to enhance financial literacy for children as part of the Greenlight for Banks program.  This allows Bank of Clarke customers to “receive free access to the award-winning Greenlight family finance app…”
  • This comes just about a month after signing US Bank ($684B Total Assets) to Greenlight’s embedded mobile app.  Those are some big wins!!

 

• Couple of announcements from major retail brands launching co-branded open loop credit cards (I love Tanner’s saying that this is the “gateway drug to embedded finance in retial” – LOL!!!!)
  • Ollie’s Bargain Outlet (522 stores in 31 states) partners with Sunbit to launch new co-branded open loop Visa credit card (issued by TAB Bank).
  • Brooks Brothers (500 stores and outlets in 45 countries) partners with Imprint for new Brooks Brothers World Mastercard co-branded open loop credit card (issued by First Electronic Bank).
  • Sheetz (676 stores in 6 states) announced the launch of the newly enhanced Sheetz Visa Card a co-branded open loop credit card issued by FNBO with enhanced rewards and expanding on an existing 14 year relationship with FNBO.

 

• Galileo announced the launch of Galileo 3D Secure (3DS) Access Control Server (ACS) to help clients protect against card-not-present (CNP) debit and credit card fraud.  Hugely important as CNP fraud is projected to skyrocket globally.
  • “He was a poor boy from a poor family” 🎵 – Sorry, sometimes my immaturity knows no bounds; and it’s been a really stressful week! 😝

 

• Flagstar Bank (FDIC 32541, $113B Total Assets, bank sub of NYCB) sold its residential mortgage servicing business to Mr Cooper for $1.4B – deal to close 4Q2024.  Housingwire is reporting that sources said over 1,000 Flagstar employees will be offered the opportunity to join Mr. Cooper.
  • Credit to Clark Street Capital for their weekly BAN Report reminding us that “last month the Financial Stability Oversight Council did a Report on Nonbank Mortgage Servicing. Back in 2008 Nonbank Mortgage Companies (NMCs) held only 4% of mortgage servicing rights.  As of 2022, they owned 54% and its climbing with acquisitions like this.”  The expectation is that this trend will continue to accelerate.

 

• A few personnel moves:
  • Brex names Sibongile Ngako as Chief Compliance Officer.
  • Temenos makes a couple of key leadership appointments in the US including Isabelle Guis as Chief Marketing Officer and member of the Executive Committee; and Monty Bhatia is appointed Executive Vice President (EVP) of Global Alliances and Partner Ecosystem.

 

• Notable FinTech funding for the week:
  • Fragment (ledger API for building financial products) raised $9M Seed round.

 
 
Random Uncle Sean stuff:

• I need a price check and cleanup on aisle 2….  Kroger’s $25B planned acquisition of Albertsons is temporarily halted due to antitrust concerns.  Hearing is planned for Sept 30.
• Cocaine sharks???  Really??? SMH…
• Snoop Dogg carries the Olympic torch in the penultimate (that is a barrister term for sure) leg before Friday night’s opening ceremony….  Don’t worry – he was on his best behavior! 😏😆
• And some quick Dad / Bad Jokes to start the weekend:
  • Here is another one from 13 year old Zoe (thank you, Zoe)…  Do you know why Texas doesn’t have U-Haul trucks?  Because we use Yee-Haw trucks instead! 🚚
  • Argentina is surprisingly cold this time of year…  In fact, it’s bordering on Chile…. 🙄
  • Sometimes I make my dog watch commercials of the homeless dogs in shelters – just so he knows how good he’s got it. 🐶
  • Pro tip on how to avoid stress at work…  Don’t go!!! 😊
  • Saving the best for last…
    • Hey, Aunt Patty - pass me the…. um… uh…  horse chester sauce, rooster shooter sauce, wash a chester shire, what’s this here sauce, who’s your sister sauce, where’s your sister sauce, wish I had a sister sauce, worst sister sauce, wish you could say it sauce, wish a sista would sauce, the witch is here sauce, WoooSaahhh 🧘‍♂️ sauce….  Oh forget it, just hand me the A-1… 🤠🤣😂  

 
 
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.