Uncle Sean's Update - 9/2/22

​Happy Friday & Happy Labor Day Weekend!!!
 
It was a busy week with a lot of updates leading into the Holiday weekend, so let’s get right to it - Here is the Uncle Sean Update for 9/2/22:
 

• Congratulations to Mr. Robert Keil, Chief Payments Officer at Sutton Bank, for being nominated by his peers as the inaugural Chairman of the Board of Directors for the BHB BaaS Association!!!!

 

• Hmmm – this will be interesting to watch….  Block (fka Square) Cash App users (80 million strong by the way) can now make payments on e-commerce sites outside the Square network via Cash App Pay.
  • Previously this was a closed loop network meaning that users could only make payments using Cash App Pay on Square terminals or online Square merchant partners.
  • For now, Block has “partnered with American Eagle, Aerie, Tommy Hilfiger, Finish Line and JD Sports for the launch with more merchants like Romwe, Savage x Fenty, SHEIN, thredUP and Wish coming to follow in the coming months.”  Block is automatically offering a 10% discount to users when they make their first purchases with these merchants using Cash App Pay.

 

• For my compliance folks out there…  Per an 8-K filed on 8/29, Blue Ridge Bank has entered into a written agreement with the OCC after the regulator found “unsafe or unsound practice(s), including those relating to third-party risk management, Bank Secrecy Act (“BSA”) /Anti Money Laundering (“AML”) risk management, suspicious activity reporting, and information technology control and risk governance.”  😲
  • The main emphasis being to “adopt, implement and adhere to a written program to effectively assess and manage the risks posed by the Bank’s third-party fintech relationships” as well as “obtain an OCC non-objection prior to onboarding or signing a contract with a new third-party fintech partner, or offering new products or services or conducting new activities with or through existing third-party fintech partners.”  Additionally, the agreement requires Blue Ridge Bank to:
    • Adopt, implement and adhere to an effective written Bank Secrecy Act (“BSA”) risk assessment program to ensure BSA compliance risk assessments provide a comprehensive and accurate assessment of the Bank’s BSA compliance risk across all products, services, customers, entities, and geographies, including all activities provided by or through the Bank’s third-party fintech partners;
    • Adopt a revised independent BSA audit program that includes an expanded scope and risk-based review of activities conducted through the Bank’s third-party fintech partners.
    • Agreement will remain effective until it is amended by the Bank and the OCC, or the OCC modifies, waives or terminates the Agreement.

 

• Aeldra announced they shutting down operations and Blue Ridge Bank will be issuing final checks to consumers on Sept 9 for any remaining funds in their Aeldra account.

 

• LevelField Financial (financial services firm) announced the acquisition of Netshares Financial Services (an SEC registered broker-dealer) as part of their overall strategy to bring “traditional banking and digital asset products and services in one trusted platform.”  LevelField has also hired PNC Bank as an advisor to acquire a U.S. chartered bank and is reportedly seeking a $50M VC round.

 

• Jack Henry announced that they teamed up with Google Cloud to accelerate JKHY’s multi-year modernization strategy by bringing cloud-first technology to banks and credit unions.  Also this week, JKHY announced the completion of the Payrailz acquisition.

 

• First National Bank of Omaha announced the launch of launch of Bend by FNBO as a new credit card-as-a-service (CaaS) solution to allow digital brands / fintech companies to launch an embedded credit card solution.  Check it out at bendbyfnbo.com.

 

• Highnote expands their partnership with Visa as an issuer processor on Visa Cloud Connect.  Highnote also announced they are working with GiveCard to launch a new prepaid debit card (issued by Sutton Bank) to enable shelters, non-profits, and governments to scale cash transfer programs and quickly serve the needs of their target community.

 

• U.S. Bank announced they are raising their minimum pay to $20 per hour starting in early November.  This is the second minimum wage increase announced by U.S. Bank this year. 

 

• The Federal Reserve narrowed the FedNow Service launch to mid-2023 specifically targeting May – June timeframe; and marks the beginning of full-scale pilot testing in mid-September with more than 120 organizations participating.  Additionally, Fed Vice Chair Lael Brainard requested industry stakeholders to devote the resources necessary to support instant payments including “upgrading back-office processes, evaluating accounting procedures to accommodate a seven-business-day week, arranging liquidity providers, deploying a new customer-facing application, and promoting instant payments for key use cases to customers” to facilitate the shift to real-time payment infrastructure.
  • For more on FedNow, go to explore.fednow.org.

 

• The United States Federal Bureau of Investigation (FBI) issued a new warning for investors regarding DeFi hacks warning that cybercriminals are increasingly exploiting vulnerabilities in decentralized finance (DeFi) platforms to steal cryptocurrency.  The FBI PSA stated, “between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97 percent of which was stolen from DeFi platforms according to blockchain analysis firm Chainalysis”.

 

• Klarna (BNPL) losses quadruple as revenue increases on 24% for the 1H2022.  OUCH!

 

• Notable FinTech funding for the week:
  • RentSpree (end to end rental management software for renters, agents, and landlords) raised $17.3M in Series B funding round.
  • Solid (fka Wise, a fintech infrastructure / middleware / BaaS connector) raised $63M in Series B round.
  • Alloy (fraud / identity decisioning platform for banks and fintech companies) raised $52M in Series C extension.
  • VRGL (institutional wealth management analytics) raised $15M in Series A.
  • Willow Servicing (cloud-based mortgage servicing) picked up a $6M Seed round.
  • Landa (fractional RE investing) emerged from stealth mode with $33M in capital funding including a recent $25M Series A and a previous $8M Seed round.

 
 
Random Uncle Sean Stuff:

• Labor Day Weekend is here and with it comes the end of the dog days of summer and early hints of fall!!!!  Ahhhh, all feels right with the world again.  In Texas it means football, slightly cooler temperatures, much needed rain, Dove season, Hatch chile pepper season, holiday scheduling / planning with family, and yes – pumpkin spice flavored everything.  😃
  • Uncle Sean expects the stores to be packed with Christmas decorations any day now (SMH)….
  • Also - don’t forget to renew those Texas hunting and fishing licenses as of Sept 1!!!
• Check out the 110 year old Battleship Texas move through the Houston Ship Channel as she left La Porte, TX for some much needed repairs at a shipyard in Galveston, TX.  
• Dad Jokes are back:
  • I went by the house that I grew up in and asked if I could go in and look around.  They said NO and slammed the door…..  Geez, my parents can be so rude sometimes!!!
  • I don’t think the therapist is supposed to say “WOW” that many times in your first session, but here we are…   😝
  • Carrots can be good for your eyes, but alcohol can double your vision - LOL!!!
  • You ever take one of those naps that is so good that you abruptly wake up gasping thinking you missed the school bus….  But it’s Sunday….  And you’re 52… 
    • Yeah – hoping I get one of those this weekend!!! 😊

 
 
Have a GREAT LABOR DAY 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.