Uncle Sean's Update - 8/5/22

Happy Friday!!!
 
You can sign up here to have the Uncle Sean Update delivered to your inbox each week!  Here is the Uncle Sean Update for 8/5/22:
 

• Holy Cow – July jobs report came in at a jaw-dropping increase of 528,000 (expectation was 250K) with unemployment at 3.5%; but the labor participation rate remains low at 62%.  Jobs tend to be a lagging indicator, so we will see what happens to the data over the next month or so before the September FOMC meeting on Sept 21 (August jobs report is scheduled for Sept 2).
  • In a somewhat conflicting report from the jobs data - the New York Fed released their Q2 2022 Household Debt and Credit Report survey showing rapid increases in credit card debt at 13% year-over-year (the largest increase in more than 20 years).  Not too overly surprising to me considering the 40 year high in inflation, but certainly worth keeping an eye on as American consumers leverage high-cost debt to make ends meet. 
    • The warning sign is that CC delinquency rates are starting to tick up, but for now remain below pre-pandemic levels.

 

• Voyager bankruptcy update – Good news for consumers as the Bankruptcy Judge approved Voyager’s motion to give customers back their $270M in cash held at Metropolitan Commercial Bank (MCB) FBO accounts citing the “funds are property of such customers and not of the Debtors’ estates.”  Although these cash accounts have been frozen since July 1; and it took a Bankruptcy Judge Approval Order to lift the stay. 
  • This should prove to be an informative moment going forward for FinTech companies and BaaS Sponsor Banks as well.
  • Here is the actual Approval Order; and here is a link to track the Voyager Court Docket filings.

 

• Synctera (fintech connector) launches Ground Control to have key compliance tasks managed by Synctera on behalf of fintech clients such as KYC, BSA, AML, fraud, and customer disputes…..
  • Not too surprising if you had a chance to see the most recent Data timeout with Bobby Button LI post showing only 27% of FinTech companies have a dedicated in-house Compliance Officer.

 

• MVB Bank becomes the first live user of the Real-time Payments (RTP) Send functionality offered by MVB’s BaaS subsidiary, Victor Technologies.

 

• Global Payments (NYSE: GPN) announced an agreement to acquire EVO Payments (NASDAQ: EVOP) in an all-cash transaction at $34 per share ($4B).
  • Global Payments is also selling the Netspend consumer business to Rêv Worldwide, Inc. in an all-cash transaction valued at $1B reuniting Netspend’s original “founders, Roy and Bertrand Sosa, who also founded Rêv.”  Global Payments acquired the Netspend business in 2019 through its $21.5 billion acquisition of Total System Services, which had purchased the debit card company for $1.4 billion in 2013.

 

• A congratulatory shout out to long-time FedFis friend, Mr. Tom Shen as the newly appointed Chairman of BankiFi's Board of Directors .

 

• It’s been a tough run for Robinhood this week announcing layoffs of 23% of staff (following 9% in April); and receiving a $30M fine for allegedly failing to maintain and certify anti-money laundering (AML) and cybersecurity compliance programs.

 

• Oops – An Equifax glitch sent millions of incorrect credit scores to lenders during a three-week period from the middle of March to early April. 

 

• GloriFi to become publicly traded SPAC merger with DHC acquisition Corp placing GloriFi’s valuation at $1.7B, and providing the firm with around $279M in cash. Pending a full product launch this fall, GloriFi aims to provide a whole range of financial services including credit cards, insurance, mortgages, brokerage, and banking products, and hopes to tackle some of the country’s economic disparity by prioritizing people living in middle America.

 

• Nomad becomes the latest victim in a nearly $200M crypto hack.  This subsequent Chainalysis report estimates approximately $2B in crypto has been stolen from cross-chain bridges so far this year.

 

• Notable FinTech funding for the week:
  • Grasshopper Bank (BaaS Sponsor Bank and Direct Digital Bank) raised $30.4M in capital
  • Kompliant (credit and compliance platform for acquirer processors and FI’s) raised $14M in Seed funding
  • ZayZoon (EWA platform) raised $25.5M in Capital consisting of $12.5M in equity and $13M in a new credit facility to expand on-demand wage access (EWA) in the U.S. including a Visa prepaid GPR (coming soon) and financial wellness app.
  • Savana (API-driven digital delivery platform) raised $45M in Series A round.
  • Parafin (white-label embedded growth capital platform for SMB’s) raised $60M in Series B funding round to expand their embedded financial services.  Check them out at parafin.com.
  • ZSuite (digital escrow/sub-ledgering solution for FI commercial customers) raised $11M in Series A round.

 
 
Random Uncle Sean Stuff:

• WOW – what a crazy week…  Monkeypox is now a public health emergency – wonderful (sarcasm).  Brittney Griner gets nine years in Russian prison for ½ ounce of cannabis oil charged with “drug smuggling”….???  And a “furious China” fires missiles near Taiwan in outrage over Pelosi visit….  “Alrighty then!”
• Well, at least it is Friday – so how ’bout some Dad Jokes!  😲
  • I told the barista at Starbucks that I would like a medium roast, and he said, “Okay, you’re a little bit ugly and kind of fat.”  Well played…
  • When cows kiss do they call it “smooooching?”
  • I accidentally took my cats meds….  Don’t ask meow…
  • Not to brag too much, but I finished my 30 day diet challenge in about 4 hours….  LOL!!!
  • “Tacpocalypse” – the act of eating tacos like it’s the end of the World (tock-POCK-a-lips) 😊

 
 
Have a GREAT weekend, laugh often, 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.