​Happy Friday!!!
🎃 Happy Halloween next week to all the ghosts and ghouls out there (don’t forget to pay your exorcist in full or you’ll get “repossessed” 😊)…. Here is the Uncle Sean Update for 10/27/23:
 👀 Acting Comptroller of the OCC, Michael Hsu is applying a “supply chain mindset” to bank-fintech scrutiny… “Sometimes you have a BaaS middleware player, different fintechs or your bank sponsor trying to do things at scale with lots of different kinds of players. That just, inherently, is more complicated. And if it’s more complicated, there’s likely going to be just a bit more risk there. And where there’s a bit more risk, we’re going to apply more scrutiny,” he said (bold emphasis added by Uncle Sean).Yep – here it comes…  An unsolicited Uncle Sean “off the rails” moment… 🤠Here at FedFis, we have been sounding the alarm about the risks of the middleware / connector model literally for well over three years now; and it hasn’t always been a popular opinion (to say the least) – but hey, when you are right, you’re right! A couple of folks you should be following for more information on this topic:Jason Mikula – click here to subscribe to Fintech Business Weekly (outstanding investigative journalism in all things BaaS and fintech)Alex Johnson – check out his latest Observations from Money 20/20 (you can subscribe from that link too)“There seems to be a belief among regulators that any BaaS middleware model that includes significant program management or that attempts to obfuscate the relationship between the bank and the non-bank partner is fundamentally flawed and incompatible with satisfactory third-party risk management. Put simply, Synapse and Solid seem to have ruined it for everyone.” – Very well said, Alex! 😎 And a quick macroeconomic update (because you know I can’t pass that up – LOL)…  Pushed by continued strength in consumer spending, US GDP grew at 4.9% annualized pace in the 3rd quarter (estimate was 4.7%).Chalk that one up to summertime / vacation spending….  We’ll see how well holiday spending holds up this quarter.  And then the bill comes due in 1Q2024… 😲 It’s here….  The FDIC, Federal Reserve, and the OCC jointly issued final rule to strengthen and modernize Community Reinvestment Act (CRA).  Some quick key points:Implementation (mostly) to begin Jan 2026.Updates asset size thresholds for small, intermediate, and large banks to account for changes in the banking industry: (1) small banks: <$600M (from <$376M); (2) intermediate banks: $600M–<$2B (from $376M–$1.503B); and (3) large banks: ≥$2B (from ≥$1.503B), adjusted annually for inflation.Small banks will continue to be evaluated under the existing framework with the option to be evaluated under the new framework. The rule also exempts small and intermediate banks from new data requirements that apply to banks with assets of at least $2 billion and limits certain new data requirements to large banks with assets greater than $10 billion.Takes into account not only branch footprint, but source of lending to include internet and mobile (finally).Here are some more data links if you really want to dig deep:2 page final CRA fact sheet.7 page CRA key objectives summary.The actual Federal Register notice is almost 1,500 pages – Whoof!!! 😬 Another important regulatory update….  The Federal Reserve Board has issued a request for comment on a proposal to lower debit interchange fees and establish a regular process for updating the maximum interchange rates on an every other year basis going forward.A $50 debit card transaction would decline from 24.5 cents under the current rule to 17.7 cents under the proposal; and only applicable to banks greater than $10B (Durbin statute). U.S. Bank (FDIC 6548) announced the launch of Avvance, and embedded point of sale financing solution (BNPL) to offer consumer financing during checkout with a quick application and instant decisioning.  Check it out at avvance.comNerdWallet (Nasdaq: NRDS) announced the launch of NerdUp Mastercard credit card which is a secured charge card (meaning no hard credit pull) issued by Evolve Bank & Trust and powered by Bond (an FIS company).Is it just me, or does the word NerdUp cause anyone else to immediately think of the song Word Up! by Cameo???  It’s just me, isn’t it…  It’s me… 🤣🎵🎶🕺 Greenlight (family banking app) is at it again – this time they have formed a CUSO to empower credit unions to offer Greenlight for Credit Unions – nice!!!! 😊Continuing to see more and more fintech firms expand their distribution strategy from challenger (B2C) to white-labeled solution for banks and CUs (B2B2C).And Uncle Sean is a huge fan of the financial literacy emphasis within the Greenlight app!!! 👍 Marqeta (NASDAQ: MQ) announced their new credit card issuing platform to make it very easy for retail brands to issue and control embedded credit cards for their customers.  You can check out Marqeta’s CEO (Simon Khalaf) interview on CNBC regarding their new credit card issuing platform. CSI announced a partnership with Dragonfly Financial Technologies to leverage Dragonfly’s Universal Online Banker platform, an enterprise-level business banking solution to CSI’s customers. Highnote expands their debit, prepaid, and fleet issuing card platform to now include consumer creditFiserv (NYSE: FI) partners with Melio to enable financial institutions to better meet the payments needs of small businesses (including payable and receivable workflows). LoanPro introduced transaction-level credit, a personalized underwriting methodology to handle transaction approvals and apply different financial mechanics based on transaction-specific attributes. Socure announced the launch of Sigma First-Party Fraud solution powered by the concurrent launch of its First-Party Fraud Consortium (FPFC) to detect and prevent fraud before it happens based on pooling of data and insights.“The consortium’s founding members include many of the nation’s largest digital banks and fintechs, including SoFi, Green Dot, Varo, Ingo, Dave and Public, amongst others, totaling over 50 million active accounts across the consortium at launch.” WEX (NYSE: WEX) announced a definitive agreement to acquire Payzer for total consideration of approximately $250 million, with additional contingent consideration of up to $11M based on defined performance metrics. Notable FinTech funding for the week:Prism Data (cash flow underwriting and predictive analysis platform originally spun off from the credit card firm Petal) raised $5M Seed Round.Lunr (inventory financing for emerging retail brands) raised $6M in equity financing.Opportun (Nasdaq: OPRT) raised $200 million private structured financing solution to finance the origination of its personal loan products. 
Random Uncle Sean stuff:After a crazy playoff series in baseball, it is now official.  Congratulations to the Texas Rangers and the Arizona Diamondbacks for making it to the 2023 World Series in a rare MLB all-wildcard matchup!!!  Game 1 starts this Friday 10/27 at 7:05 Central in Arlington, TX.  Former President George W. Bush will throw out the ceremonial first pitch.Here they are – your Bad / Dad Jokes for the week:The word “seven” has “even” in it…  Which is odd…. 🤔I recently ordered a Life Alert bracelet – so if I do get a life, I’ll be notified immediately!  LOL!!!It’s all fun and games until your oversized shirts start fitting…  😲Albert Einstein was a genius, but his brother Frank was a monster….  😃If you think about it…  When you’re drinking beer, the beer is getting drunk too…  🍺I tend to do my beast proofreading right after I hit sned…  Every snigle weak….   
Have a GREAT weekend, a very Happy Halloween, 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.