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Uncle Sean's Update

Here is the Uncle Sean Update for 10/7/22:

• Bankers Helping Bankers (BHB) is at it again!!!!?Check out the newest as BHB launches "Test Pilots", a way for community banks to join as innovative bankers to test pilot early-stage fintech vendor products and services.?The Test Pilot banks will become strategic partners with the fintech vendor, providing:
• Beta testing of products/services including feedback
• Influence of product development
• Assisting in a rollout strategy that minimizes risk to both the bank and the fintech (of huge importance)
• Responsible innovation for the benefit of community banks – HELL YES!!!!?Banks can sign up here for BHB Test Pilots.

• Macro-economic news – Jobs Data is still strong at +263,000 for Sept but slowing (and the smallest since Apr 2021) and unemployment dropped to 3.5% (forecast was 3.7%).?CNBC has a good summary.
• However, Uncle Sean finds it somewhat interesting that the Labor Force Participation Rate ticked down slightly for Sept to 62.3; and is trending mostly flat for the year and still well below pre-pandemic levels.?Meanwhile wages are still running 5% year-over-year.
• Keep in mind that the next FOMC meeting isn’t until Nov 1-2.

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• OORah! MOCA Financial announced they have partnered with the Association of Military Banks of America (AMBA) to launch the PATRIOT card for Veterans via MOCA’s next-gen card-based payment platform.?The PATRIOT card allows our Veterans the ability to have their government benefits deposited directly to a card without the need for a bank account.?
• “Veterans will benefit greatly from MOCA’s virtual and physical cards with associated technology that empowers cardholders to self-issue cards on-demand, including cards to family members; get real-time transaction alerts; and even make Person to Person (P2P) payments to family members or others in real-time. In addition, our Veterans can add money to their MOCA Cards from multiple sources, transfer money between cards, provision their cards to a digital wallet with the click of a button, and immediately replace a lost or stolen card.”

• Q2 (NYSE: QTWO, Q2 Holdings, Inc.) announced the acquisition of Sensibill as a compliment to Q2 Catalyst commercial suite by helping small and medium sized businesses to automate and streamline expense management via Sensibill’s machine learning platform.

• Rapid Finance announced the acquisition of Thrive.

• Saint Louis Bank (FDIC 58018; $712M Total Assets) announced a partnership with Nymbus to build out a niche digital banking solution (i.e. direct digital bank) for small to medium-sized law firms and other members of the legal community.

• New BNPL regs and enforcement seem to be coming as the Federal Trade Commission (FTC) weighs in on BNPL following a similar deep dive last month from the CFPB.?Payments Dive has a good summary.

• Afterpay (BNPL) announces interest bearing monthly installment plan for 6 – 12 months for purchases between $400 and $4,000.
• Interesting side note from Uncle Sean:
• Afterpay was acquired by Block (Square) for $29B and this deal was completed January 31, 2022.?Additionally, Square obtained a bank charter and began banking operations back in March 2021 as Square Financial Services (FDIC 59177).
• However, Square (Block) is using First Electronic Bank (FDIC 35533) as the program sponsor for Afterpay’s new monthly installment plan.
• To be honest, I am not entirely sure why Square is not running the installment loans through their own bank charter.?If I had to speculate, it may have something to do with: 1) BNPL regulatory scrutiny, 2) Square may feel that they are not ready for that much loan/underwriting exposure (through the charter), or 3) it just may be too far of pivot from their regulatory approved de novo business plan.?But probably a combination of all of the above.

• Just in case you missed it, the NCUA has been busy….
• Late last week the NCUA liquidated Paducah Teachers Federal Credit Union (Charter 11955; $12M Total Assets).?FedFis had a Failure Rating of 4.75 (1.00 – 5.00 scale with 5.00 being the worst) for Paducah Teachers FCU for 2Q22 Call Report placing them in the lowest possible percentile of all CU’s.
• Yeah – we do Bank and CU Ratings too (nice plug, right)!???
• And this week, the NCUA placed Mingo County Education Federal Credit Union (Charter 22678; $2.7M Total Assets) and O.F. Toalston Federal Credit Union (Charter 6293; $479K Total Assets) into conservatorship – both for unsafe and unsound practices.

• And another crypto cross-chain bridge hack…?This time it was Binance’s BNB token hacked for about $570M via cross-chain bridge hack – although the majority of funds remain under control in the exploiter’s crypto wallet and about $100 million was “unrecovered.”

• Notable FinTech funding for the week:
• Tally (automated consumer credit card debt payoff service) raised $80M in Series D funding round.
• Equi (alt-investing platform) raised $15M in Series A.
• Railsr (fka Railsbank) raised $46M in Capital consisting of $26M in Series C and $20M in debt financing.
• Juno (crypto digital banking firm) raised $18M in Series A funding round and launches a loyalty token.
• Jiko (a division of Mid-Central National Bank) raised $40M in Series B funding round.

Random Uncle Sean Stuff:

• We said goodbye to the original Coal Miner’s Daughter and Country Music legend Loretta Lynn who passed away peacefully at her home this week at the age of 90.
• This is a true story – I was interviewing at KHS America with Mr. Keith Gard many years ago for a Controller position overseeing consolidated financial reporting, treasury, credit, FP&A, payroll, and HR.?Keith asked if I had any experience with HR to which I jokingly replied, “yeah – I was in their offices all the time at my last job.”?Fortunately, Keith shared my sense of humor and I actually did get that job.?LOL!!!!!
• Now let’s crank out some classic Dad Jokes!!!
• I wonder if Mr. Peanut ever said, “I’ll be back in a Jiff.”
• Who knew that Breaking Bad was not about break dancing at all…???
• I told Aunt Patty that the kids have been on eBay all day.?If they are still on there tomorrow, I’m gonna lower the price.???
• And of course a motivational post….?“THINK – its what you do when you can’t thwim…”

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

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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.