Uncle Sean’s Update 3/29/24

Happy Good Friday!!!
Happy Easter to all!!! 🐰 It was a fairly light week from a market research perspective (insert sigh of relief here 😊)…  Here is the Uncle Sean Update for 3/29/24:

• 👀 Bankers Helping Bankers (BHB) appoints Matthew Smith as President of BHB!!!! 🚀  Matthew’s new role is in addition to serving as Director of Innovation Initiatives at IBAT; and his complete lack of any personal time whatsoever (LOL) is a direct representation of his support and tireless dedication to community banking.
  • Congratulations, my friend!!!! 🤠  Looking forward to even more great times and successful collaboration together in support of community banks everywhere. 💪

• Sutton Bank and Piermont Bank are the latest BaaS Sponsor Banks to be hit with consent orders; and yes, it is TPR and AML again (and again and again and again and AGAIN!!!).  If you are still looking for regulatory guidance in the BaaS space, it is consistently being displayed through consent orders almost on a weekly basis.
  • For the record, Piermont Bank was previously working with middleware / connector firm Unit.
    • For more detailed information and excellent analysis coverage, I highly recommend following:
      • Sarah Beth Felix with her extremely informative and detailed analysis of consent orders (she is an absolute powerhouse in all things AML); and
      • Jason Mikula and his publication Fintech Business Weekly for incredible investigative journalism in the Fintech / BaaS space.

• ICYMI (I don’t know how, but just in case), Visa and Mastercard reach landmark credit card settlement after nearly two decades of litigation.  The settlement lowers interchange fees and caps them for five years.
  • Here is Visa’s PR statement, and here is Mastercard’s PR statement.
    • Many analysts are forecasting issuing banks to absorb some of the hit to reduced interchange (lower non-interest income), with an offset to lower rewards.  It will be interesting to see how this plays out at the merchant and consumer level.

• Robinhood launched their new Robinhood Gold Card (a subscription based Visa credit card issued by Coastal Community Bank with a host of rewards and perks) capitalizing on their acquisition of X1 back in June 2023 for $95M.
  • Based on the above interchange settlement, I can’t help but wonder how long the Gold Card’s 3% rewards will last.

• Here is another happy example of good people and a good company continuing to do great work for community banks. ❤️  Check out the amazing close to 1Q24 from ZSuite Tech this week with 3 very nice announcements – WOWZA:
  • ZSuite teams up with Bankwell Bank (FDIC 57368; $3.2B Total Assets).
  • First Bank (FDIC 58481; $3.6B Total Assets) launches ZEscrow and ZRent developed by ZSuite.
  • Core Bank (FDIC 34363; $1.1B Total Assets) launches ZEscrow.

• A federal judge ruled that Walmart can exit the Capital One exclusive credit card partnership early due to the bank failing to provide the required level of customer service.  Capital One is evaluating its right to appeal.
  • Lesson here is to double check contract T&C’s for clarity and specific SLA’s… 😬
  • 👀 Any bets on how long before One (acquired by Walmart) launches a CC?

• Dwolla expands its partnership with MX Technologies to take advantage of MX’s Instant Account Verifications (IAV) for Dwolla’s Open Banking / A2A services (pay-by-bank).
• Modern Treasury announced the launch of their Professional Services offering to help enterprises scale modern payment infrastructure.
• Sam Bankman-Fried gets 25 years and ordered to pay $11B in forfeiture.
• Personnel moves:
  • R&T Deposit Solutions (“R&T”) hired Angela Graves as Managing Director, Banking and Trusts further expanding R&T’s investment and footprint Deep in the Heart of Texas. 🎶🎵  Very nice!!!! 🤠🚀
  • Robinhood co-founder and Chief Creative Officer, Baiju Bhatt to step down to focus on his “next enterprise.”
  • Ally Financial hired Michael Rhodes as CEO effective April 29. He was previously CEO of Discover Financial Services for a tenure of about two months…
    • Discover 8-K filing further states Mr. Rhodes was “not expected to have a long-term role at the combined company after completion of the Company’s merger with Capital One Financial Corporation.”
      • That is, of course, assuming that deal gets all necessary regulatory approvals and actually closes.
  • Meridian Capital hires Brian Brooks as CEO to build up their compliance arm.
• “Obviously we need to reset that relationship and we need to build a risk infrastructure at Meridian that meets Freddie Mac’s expectations — that’s job one,” Brooks told Bloomberg. “We’ll be engaging on Day 1 with Fannie Mae, Freddie Mac and the FHFA to talk about ways we can improve the risk culture and ways that we can improve compliance to give them confidence.
• FinTech funding for the week:
  • Goalsetter (financial education and family financial well-being app) raised $9.6M in Series A Extension round to enhance their B2B distribution strategy to credit unions, banks, and wealth management institutions.
  • FundGuard (accounting platform for asset managers, asset owners, custodian banks and fund administrators) raised $100M in Series C funding round.
  • ZayZoon (EWA) raised $15M in Series B Extension round just six months from the original Series B bringing the total B round to $48.5M.
  • NewRetirement (a direct-to-consumer financial planning / wellness platform than can also be white-labeled for employers, advisory services, and financial institutions) raised  $20M in Series A funding round.  Check them out at newretirement.com.

Random Uncle Sean stuff:

• Smells like an April Fools’ Day joke to me since more details “will be revealed on April 1,” but a pretty cool marketing ploy nonetheless as it certainly got my attention….  7-Eleven has partnered with Miracle Seltzer to introduce a lineup of sparkling waters with bold and cutting-edge flavors including hot dog flavored sparkling water… 🤮
  • If this is not a joke…  I’m going to be 100% honest…  I will have to try it no matter how disgusting “hot dog water seltzer” sounds.  LOL!!!!!
    • No joking here…  Per our FedFis FinTech Analytics© platform (I am not above a shameless plug 😊) – did you know that 7-Eleven has a retail mobile banking app?  Yessir, check it out at https://www.transact711.com/.
• I have to go and dye some hard boiled eggs for Easter (Paas dye kit – I can smell the vinegar already), so let’s get to the good stuff – Dad / Bad Jokes!!!!
  • Turbo Tax has to be the worst computer game ever… 😵🙃
  • How rare is it for a cow to be struck by lightning?  I would say about medium rare….  (okay – that was pretty bad, LOL)
  • Ah – April Fools’ Day…  April 1 is named Fools’ Day after Steve April.  He was born on April 1, 1679.  He failed at more than 100 businesses endeavors in his lifetime, ultimately depleting all of his family’s assets – to which he earned the nickname “father of the fools.”  At the age of 19, he married a 61 year old woman who eventually left him because of his foolish ways.  He used to waste time reading all kinds of fake short-stories, just like you are doing now…  😆🤪

Have a GREAT Easter Weekend and please stay safe!!!

Uncle Sean