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Bulletin

Uncle Sean's Update - 7/8/22

7/8/2022

 
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​Happy Friday!!!
 
It was another super-busy short week.  Here is the Uncle Sean Update for 7/8/22:
 
  • Uncle Sean goes “off the rails” with an unsolicited op-ed on the Voyager Chapter 11 Bankruptcy - specifically related to the Voyager Debit Card showcasing “9% rewards” and the impact to those consumers, so please feel free to scroll down for the rest of the normal update 😊.
    • If you want to learn more about the current crypto contagion meltdown and how we got here, Forbes has a good summary of the Crypto Winter.
      • My 2 cents is that this is a process in deleveraging amongst rapid declining collateral – hmmm, any credit lessons learned from the past (yep – that’s sarcasm)???  My more “seasoned” banker friends are shaking their heads with flashbacks of Lehman Brothers.  We’ve seen this before; and ironically is largely why DeFi exists today – LOL!!!  Fortunately, this has just become contagion within the crypto ecosystem; and that market itself (in my opinion) is not big enough or widely dispersed enough to become systemic risk – YET. 😲
    • I am generally not a huge fan of more regulation, but in this instance we certainly need it sooner rather than later – particularly surrounding:
      • transparent stablecoin collateralization
      • investor protections, and
      • strict clarifications surrounding terminology – specifically loan yield versus “rewards” or “savings” (remember when Chime agreed to stop referring to themselves as a "bank")
    • Unfortunately, a direct result of this crypto contagion is the Voyager Bankruptcy; and the FDIC is investigating how Voyager marketed themselves, which is a good start.
    • Here’s the punchline - my biggest problem with Voyager is that even today, their website still says “the card that earns up to 9% rewards“  This is not a rewards platform, it is a USDC yield platform as I described in the Uncle Sean Update for 11/19/21 and again in the Uncle Sean Update for 4/1/22.  We need to do a better job of showcasing the risks associated with being outside of the FDIC and SIPC insured regulatory system especially when targeting retail consumers.
      • Let’s be honest, the crypto ecosystem can be very difficult to understand even amongst educated and experienced financial experts.  Just imaging the confusion to ordinary folks thinking they are getting rewards on debit card spend not fully understanding that they are generating a crypto loan return as an unsecured creditor.  We can do better than this…
    • Whew, I feel better now - back to the rest of the Uncle Sean Update!!!
 
  • Truist (NYSE: TFC) announced they are raising their U.S. minimum wage to $22 effective Oct. 1.
 
  • Mambu (modern cloud banking platform) announced global partnership with Visa to utilize Visa DPS as payment processor.
 
  • Take a minute and read this nicely done commentary by Rob Morgan on Why I'm Joining USDF.  Responsible blockchain innovation is cool!!!
 
  • I ran across this while doing some other research this week…  Looks like Farmington State Bank (FDIC 6149; $16M Total Assets; established 1929; no branch network; located in WA) is going through a rebranding / dba to Moonstone Bank – “a bank built by innovators, for innovators.”  Uncle Sean LOVES this new class of FDIC chartered developer banks; and I hope everyone pays attention to their current asset size (BaaS isn’t just for the Big Banks)!
    • Check them out at Moonstonebank.com
    • Also worth noting is their Bank Holding Company, FBH Corp, raised $11.5M in private equity funding in March from Alameda Research Ventures (yep - owned by Sam Bankman-Fried, CEO of FTX).
    • And lastly – take a look at the recent firepower they have brought in (this should be fun to watch):
      • Ronald Oliveira – CEO (former US CEO of Revolut)
      • Praful Mainker, CFA – Chief Risk Officer (former Executive Director of AI, Automation, and Data Science at JPM Chase) – deeply involved in crypto
      • Tim Courtney, CAMS – Head of Financial Crimes (former lead of BSA/AML/OFAC at OpenPay; VP Financial Crimes at LPL Financial)
      • Daniel Ranallo – CTO (former software engineer and CTO)
 
  • BMO Harris Bank becomes the latest large FI to eliminate NSF and restructure Overdraft fees for consumer and small business banking account.  Banking Dive has a good summary with other large regional comparisons.
 
  • Funding Circle (online small business lending platform) announced an agreement with DreamSpring (CDFI) to expand the DreamSpring small business reach via a co-branded application portal as part of Funding Circle’s lending-as-a-service program.
 
  • Notable FinTech funding for the week:
    • Finli (mobile payments app focused on service related microbusinesses) raised $6M in Seed funding round.
    • Tesorio (mid-market AR management platform) raised $17M in Series B round.  Valuation was not disclosed, but the company stated the “funding follows a third consecutive year of triple-digit revenue growth.”
    • Coalition (cyber insurance and active managed cyber security platform) raised $250M in Series F funding round at a valuation of $5B
 
 
Random Uncle Sean Stuff:
  • Only 50 more days until College Football season begins!!!!  I know it’s technically “week zero” with the majority of teams starting the season a week later, but it’s a start!!!!!
  • And a few quick Dad Jokes to kick off the weekend:
    • Why don’t they refer to dental x-rays as “tooth-pics?”
    • It is actually faster to say “world wide web” than “www”…..
    • WTF is an acronym……. (hehehehe)
    • A mosquito landed on my face and Aunt Patty said it was the easiest decision of her life!!!!  😝
 
 
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 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.
 

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