Fintech Recap: Charters, BaaS & the Fed

Fintech Recap: Charters, BaaS & the Fed

Welcome back to Fintech Recap. I'm Alex Johnson, joined as always by my partner in recapping, Jason Mikula. We kick things off with the accelerating trend of fintech companies becoming banks. Chime's CEO confirmed it's a matter of when, not if — reversing their "we're a software company" stance. Mercury got conditional OCC approval for a national bank charter the same week it raised $200M at a $5.2B valuation. We explore what the fintech-to-bank stampede does to your valuation (our case studies are Chime, SoFi, and LendingClub), and why some companies chartering today might wish they hadn't. Then, BaaS Island calls us back (I'm a sucker for the sirens' song). The OCC issued a consent order against Community Federal Savings Bank, a single-branch institution in Queens that grew from $140M to $900M in assets by running fintech partner programs for Airwallex, Wise, Payoneer, among others. We discuss why the OCC acted, and why the order is unusually narrow. From there, we walk through two executive orders from the White House on fintech and bank regulation and the Federal Reserve's convoluted master account situationship. Finally, in our Can't Let It Gos: Jason can’t let go of SpaceX dumping on retail investors as exit liquidity for their VCs, and I can’t let go of PayPal's settlement with the DOJ over a fair lending investigation into a program that never made a single loan. Truly, this will haunt me forever! This episode is brought to you by Persona.  The best fintechs expand what's possible for users. Persona does that for fraud prevention. Their recently upgraded link analysis tool surfaces connections in real time, letting you spot deepfakes, identity farms, and fraud rings during onboarding and investigations.  They just published their Fraud Leader's Guide to Link Analysis, a practical look at today’s top risk signals, automating decisions, and scaling link analysis for fraud prevention. Download it now: http://withpersona.com/ftt-fraud [http://withpersona.com/ftt-fraud]  Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/ [https://workweek.com/brand/fintech-takes/]  And for more exclusive insider content, don’t forget to check out my YouTube page [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos]. Follow Jason: Newsletter: https://fintechbusinessweekly.substack.com/ [https://fintechbusinessweekly.substack.com/] LinkedIn: https://www.linkedin.com/in/jasonmikula/ [https://www.linkedin.com/in/jasonmikula/]   Follow Alex:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos] LinkedIn: https://www.linkedin.com/in/alexhjohnson [https://www.linkedin.com/in/alexhjohnson] Twitter: https://www.twitter.com/AlexH_Johnson [https://www.twitter.com/AlexH_Johnson]

Fintech Takes x Chime presents Banking on Primacy Episode 4: The AI Episode

Welcome to Banking on Primacy, a four-part podcast miniseries from Fintech Takes, sponsored by Chime. The series orbits one question that has become the most contested in consumer finance: what does it take to earn (and hold) the most important relationship in someone's financial life? In Episode 4, I sit down with Ryan King, technical Co-Founder at Chime, to explore what AI means for the primary account relationship. Ryan has been in and around Silicon Valley as a builder through every major technology wave. He argues that AI isn't another step change; it’s a slope change. The closest historical analogy is the Industrial Revolution: factories didn't give workers better tools, they reorganized physical production. Now AI is doing the same thing to knowledge work. At Chime, that belief is already operational: 84% of code is now developed with AI. But the more interesting conversation is about consumers, not code. * Most of the financial services industry is racing toward building AI that makes it easier to spend, but is that the problem everyday Americans face? * When AI starts making financial decisions on behalf of consumers, whose side is it on? And how does the business model answer that question? * Financial institutions have spent decades building trust with millions of account holders. How does that trust translate in a world when OpenAI and Perplexity want the same job? This episode is brought to you by Chime. For most Americans, their primary bank account is their most important financial relationship. Traditional banks held that position and took it for granted. Chime was built differently: fee-free, built to succeed when members do, and now America’s #1 banking choice with roughly 10M active members. Chime Prime takes that further: 5% cash back, savings rates up to 9x the national average, premium travel perks, no fees. See how at https://www.chimeprime.com/ [https://www.chimeprime.com/] Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/ [https://workweek.com/brand/fintech-takes/] And for more exclusive insider content, don’t forget to check out my YouTube page [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos]. Follow Alex:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos] LinkedIn: https://www.linkedin.com/in/alexhjohnson [https://www.linkedin.com/in/alexhjohnson] Twitter: https://www.twitter.com/AlexH_Johnson [https://www.twitter.com/AlexH_Johnson] Follow Ryan: https://www.linkedin.com/in/ryanaking/ [https://www.linkedin.com/in/ryanaking/]  Learn more about Chime here: https://www.chimeprime.com/ [https://www.chimeprime.com/]

Who Pays for Open Finance?

Welcome back to the Fintech Takes podcast. I'm Alex Johnson, joined by Rafe Mazer, researcher and author of the excellent report "Who Pays for What? Pricing and Monetization Options in Open Finance [https://www.centerforfinancialinclusion.org/brief/who-pays-for-what-pricing-and-monetization-options-in-open-finance/]." This episode is a deliberate step back from the U.S. open banking soap opera I've been living inside for the past year or so.  The question of who pays for open finance isn't one the U.S. gets to answer in isolation. Other markets have been wrestling with it for years, and at some point I needed someone to make me look up. That person is Rafe. Rafe works across Africa, the Middle East, Latin America, and beyond, and his new report [https://www.centerforfinancialinclusion.org/brief/who-pays-for-what-pricing-and-monetization-options-in-open-finance/] surveys the global landscape of how open finance systems get built and funded.  It’s the closest thing to a first principles analysis that exists, and you should read it (link below). We cover the four distinct cost stages of open finance (most countries only plan for one), plus the five pricing archetypes that exist globally, from Brazil's threshold pricing that was never actually collected to South Korea's voluntary, self-governing open banking exchange that works without a single regulatory mandate requiring it. The U.S., despite having one of the most competitive financial markets in the world, may be poorly positioned to get this right. We also get into reciprocity, the word that never appears in the U.S. open banking debate but probably should, and what a federal data protection law would actually change. Check out Rafe's report here: https://www.centerforfinancialinclusion.org/brief/who-pays-for-what-pricing-and-monetization-options-in-open-finance/ [https://www.centerforfinancialinclusion.org/brief/who-pays-for-what-pricing-and-monetization-options-in-open-finance/] This episode is brought to you by Persona.  The best fintechs expand what's possible for users. Persona does that for fraud prevention. Their recently upgraded link analysis tool surfaces connections in real time, letting you spot deepfakes, identity farms, and fraud rings during onboarding and investigations.  They just published their Fraud Leader's Guide to Link Analysis, a practical look at today’s top risk signals, automating decisions, and scaling link analysis for fraud prevention. Download it now: http://withpersona.com/ftt-fraud [http://withpersona.com/ftt-fraud]  Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/ [https://workweek.com/brand/fintech-takes/] And for more exclusive insider content, don’t forget to check out my YouTube page [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos]. Follow Rafe: LinkedIn: https://www.linkedin.com/in/rafael-rafe-mazer-13531b/ [https://www.linkedin.com/in/rafael-rafe-mazer-13531b/]   Follow Alex Johnson:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos] LinkedIn: https://www.linkedin.com/in/alexhjohnson [https://www.linkedin.com/in/alexhjohnson] X: https://www.twitter.com/AlexH_Johnson [https://www.twitter.com/AlexH_Johnson]

Fintech Takes x Nova Credit Presents Cash Flow Conversations Episode 6: Living Out on the Edge

Hello, and welcome back to Cash Flow Conversations, a podcast series sponsored by our friends at Nova Credit. We've spent a lot of time in this series focused on the mainstream adoption of cash flow data within consumer lending: where to get started, the challenges you can expect to face.  Episode 6 leaves that territory behind for the open frontier, where the conversations aren't about operational realities but about what's coming next. And there’s no one better to have that conversation with than Nikki Cross [https://www.linkedin.com/in/nikkicrosspatrick/], Head of Data Science Consulting at Nova Credit. We get into why the development of custom scores in cash flow lending is harder than most lenders expect on Day 1, fair lending and how to navigate compliance concerns within an entirely new universe of data, and what agentic AI means for explainable credit decisions. Cash flow data reveals far more about how consumers tend to their financial lives than bureau data ever did; which is both the opportunity and the complication. This episode is brought to you by Nova Credit.  Nova Credit is a credit infrastructure and analytics company that enables businesses to grow responsibly by harnessing consumer credit data. Learn more at novacredit.com [http://novacredit.com]. Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/ [https://workweek.com/brand/fintech-takes/] And for more exclusive insider content, don’t forget to check out my YouTube page [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos]. Follow Alex:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos] LinkedIn: https://www.linkedin.com/in/alexhjohnson [https://www.linkedin.com/in/alexhjohnson] Twitter: https://www.twitter.com/AlexH_Johnson [https://www.twitter.com/AlexH_Johnson] Follow Nikki: https://www.linkedin.com/in/nikkicrosspatrick/ [https://www.linkedin.com/in/nikkicrosspatrick/]  Learn more about Nova Credit here [http://www.novacredit.com].

Fintech Takes x Chime presents Banking on Primacy Episode 3: Banking at Work

Welcome to Banking on Primacy, a four-part podcast miniseries from Fintech Takes, sponsored by Chime. The series orbits one question that has become the most contested in consumer finance: what does it take to earn (and hold) the most important relationship in someone's financial life? In Episode 3, I sit down with Jason Lee, Chief of Chime Enterprise. We unpack fintech as an employee benefit, which is compelling in theory but harder in practice than most founders expect. Employers don't wake up wanting fintech products. They want workers who stay. Jason founded DailyPay in his basement in 2015, built it into a multi-billion dollar company, and now looks after Chime's employer-facing business after Chime acquired his second company, Salt Labs. His read on what it actually takes to make this model work is fascinating.  * Why do most earned wage access products only reach 30% of a workforce and what serves the other 70%? * Why does brand recognition drive employee adoption more than the product itself? * Now that earned wage access is morphing into the financial health industry, where does that leave point solutions? This episode is brought to you by Chime. For most Americans, their primary bank account is their most important financial relationship. Traditional banks held that position and took it for granted. Chime was built differently: fee-free, built to succeed when members do, and now America’s #1 banking choice with roughly 10M active members. Chime Prime takes that further: 5% cash back, savings rates up to 9x the national average, premium travel perks, no fees. See how at https://www.chimeprime.com/ [https://www.chimeprime.com/] Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday and Thursday: https://workweek.com/brand/fintech-takes/ [https://workweek.com/brand/fintech-takes/] And for more exclusive insider content, don’t forget to check out my YouTube page [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos]. Follow Alex:  YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos [https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos] LinkedIn: https://www.linkedin.com/in/alexhjohnson [https://www.linkedin.com/in/alexhjohnson] Twitter: https://www.twitter.com/AlexH_Johnson [https://www.twitter.com/AlexH_Johnson] Follow Jason: https://www.linkedin.com/in/jasonleem2/ [https://www.linkedin.com/in/jasonleem2/]