The hottest Banking Substack posts right now

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The Smallest Bank in Tennessee Grew Fast With BaaS. Why It May Give The Entire Industry A Hangover.

Fintech Business Weekly • 267 implied HN points • 27 Aug 23
💰 Finance Banking Fintech Regulation Partnerships Deposits
  1. The smallest bank in Tennessee saw significant growth by leveraging BaaS partnerships, but this rapid expansion may raise concerns about the bank's ability to manage increased complexity.
  2. The Herrington family behind Lineage Bank has a history of running banks, facing challenges and controversies in their previous ventures.
  3. Synapse, a key BaaS partner of Lineage Bank, has faced regulatory scrutiny and may be pressuring Lineage to approve more programs, highlighting risks in complex financial partnerships.

Fighting the Bandwagon Effect in Your Decisions

Ruben Ugarte's Growth Needle™ • 39 implied HN points • 20 Feb 24
💼 Business Banking Strategy Decision-making Growth Economics
  1. JPMorgan Chase is opening more physical branches, even though many think they're outdated. This shows that sometimes going against the trend can be a smart move.
  2. The bandwagon effect can lead people to make poor decisions just because others are doing something. It's important to think critically instead of just following the crowd.
  3. To resist the bandwagon effect, consider your own goals, gather diverse opinions, and take time to analyze options before making decisions. This can help you make better choices.

Is Japan’s Inflation As High As It Seems?

Japan Economy Watch • 279 implied HN points • 24 Jun 22
💰 Finance Inflation Banking Policy Economy Market
  1. Japan's inflation rate may not be as high as it seems, with different measures showing varying results.
  2. Central banks like the Bank of Japan use 'core' inflation rates that exclude volatile items to gauge long-term trends.
  3. The challenge for Japan's economy is to achieve healthy inflation driven by domestic demand rather than by high import prices.
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A Modern Look at an Old Banking Risk

The Sunday Morning Post • 78 implied HN points • 09 Jul 23
💰 Finance Banking Regulation Stability Risk management Social media
  1. Bank runs can still happen today, triggered by various factors like social media rumors and liquidity issues
  2. The FDIC, established in 1933, guarantees a certain amount of depositors' funds to prevent bank runs and provide stability to the banking system
  3. Modern banking faces new challenges like swift fund transfers, online activism affecting stock prices, and the need for regulators to adapt to the changing landscape

Was Fintech's Biggest Lending "Innovation" A Willingness To Serve Riskier Borrowers By Charging Higher Rates?

Fintech Business Weekly • 237 implied HN points • 09 Jul 23
💰 Finance Fintech Lending Venture Capital Banking
  1. Fintech lenders rely heavily on conventional credit scores like FICO and possibly overcharge riskier borrowers.
  2. Fintech's main 'innovation' is serving borrowers banks reject by charging higher interest rates.
  3. Goldman Sachs is looking to offload its Apple partnership, showcasing the shifting landscape of fintech engagements.

The LIBOR scandal, part 2

The Jolly Contrarian • 19 implied HN points • 11 Apr 24
💰 Finance Scandal Banking Legal Ethics Regulation
  1. The concept of interest rates as a tradable financial instrument emerged in the 1980s, thanks to the development of interest rate swaps, marking a significant shift in the financial landscape.
  2. The manipulation of the LIBOR rate involved complex financial processes that led to criminal proceedings against several traders, highlighting ethical and legal dilemmas in the financial industry.
  3. The legal interpretation of the LIBOR Definition in the context of criminal law versus contractual interpretation raised debates around conflicts of interest, contractual obligations, and the application of criminal charges in financial settings.

Future of Goldman's "Platform Solutions" Looks Grim

Fintech Business Weekly • 170 implied HN points • 24 Sep 23
💰 Finance Fintech Banking Cryptocurrency Regulation
  1. Eco shut down its banking app and laid off its team as it focuses on new money initiatives with cryptocurrency.
  2. Goldman Sachs is near selling GreenSky, indicating a bleak future for its "Platform Solutions" division.
  3. CFPB warns that lenders using AI must provide specific reasons for adverse actions and initiates rulemaking to remove medical debt from credit reports.

What IS OCEN? What would it look like?

Turnaround • 494 implied HN points • 05 Oct 20
💼 Business Fintech Lending Credit Banking Small business
  1. OCEN is a new credit infrastructure that could revolutionize lending in a way similar to how UPI transformed payments.
  2. It is a protocol, not a switch, and its potential lies in the consumer products that can be built on top of it.
  3. OCEN aims to address India's credit distribution problems by making access to credit easier for the Next Billion Users and SMEs, potentially reducing the concentration of capital.

Leaked Treasury Prime Docs Show Risks Of BaaS Business: Churn, Concentration, Slowing Growth

Fintech Business Weekly • 89 implied HN points • 03 Mar 24
💰 Finance Fintech Banking Regulations Business Models Risk management
  1. Leaked Treasury Prime documents highlight risks in Banking-as-a-Service business, including issues like churn, concentration, and slowing growth.
  2. Treasury Prime's strategic pivot to focus on selling to banks instead of fintechs resulted in drastic employee layoffs, shedding light on the challenging environment for middleware platforms in fintech.
  3. Fintech companies like Chime and Green Dot facing regulatory actions and penalties underscore the importance of compliance and customer service in the financial industry.

Potential Class Action Argues High APR "Rent-a-Bank" Scheme Violates RICO

Fintech Business Weekly • 96 implied HN points • 11 Feb 24
💰 Finance Banking Legal Regulation Fintech Lending
  1. A potential class action case argues against a "rent-a-bank" scheme for high APR loans, highlighting the importance of understanding financial regulations and usury laws in the lending industry.
  2. The case brings attention to the evolving landscape between fintech companies and traditional banks, showing the complexities and discussions around defining the true lender in partnerships.
  3. The case also underscores the need for transparency and clarity in financial partnerships, as demonstrated by the alleged lack of distinction between a fintech entity and bank in customer-facing materials.

What if there's no U.S. recession?

Jon’s Newsletter • 59 implied HN points • 05 Aug 23
💰 Finance Economy Investing Banking Market Trends Recession
  1. Bank of America has changed its prediction and now believes the U.S. might not face a recession. This change happened after positive statements from the Federal Reserve about the economy.
  2. Despite rising interest rates, the economy has been doing well with job growth and spending in new areas like AI and renewable energy.
  3. Historically, when there wasn't a recession after rate hikes, the stock market usually performed better, suggesting a positive outlook for investors.

Blue Ridge "Explores Options" For Capital Raise As It Reduces BaaS, Fintech Exposure

Fintech Business Weekly • 126 implied HN points • 19 Nov 23
💰 Finance Banking Regulation Lending Payments Compliance
  1. Blue Ridge Bank is looking to raise capital and reduce its exposure to banking-as-a-service and fintech.
  2. States like California and Wisconsin are regulating earned wage access, which is positive but adds compliance challenges.
  3. Plaid has launched a subsidiary as a consumer reporting agency, moving towards offering cash flow underwriting services.

Morgan Stanley-Backed TomoCredit Isn't Paying Its Bills, Faces Mounting Legal Challenges

Fintech Business Weekly • 89 implied HN points • 18 Feb 24
💰 Finance Fintech Credit Legal Challenges Startups Banking
  1. TomoCredit, a startup backed by Morgan Stanley, is facing financial troubles and legal challenges despite its initial success claims.
  2. Mission Lane, a subprime card startup linked to LendUp, has raised $50 million and replaced its CEO in an effort to reposition itself.
  3. A study by the Federal Reserve reveals differences in how financially stable versus fragile households utilize buy now, pay later services, impacting the types and frequency of purchases made.

Fundamentals: compound interest explained

Concepts of Finance 🧠 • 119 implied HN points • 13 Feb 23
💰 Finance Investing Savings Banking Personal Finance
  1. Compound interest lets you earn interest on both your original savings and the interest you've already earned. It's like a snowball getting bigger as it rolls down a hill.
  2. The longer you keep money in a compound interest account, the more you'll earn. This means that starting early can lead to much bigger savings over time.
  3. You can find compound interest rates from banks, credit unions, or online calculators. Knowing these rates can help you make better decisions about saving and investing.

A Bank of One's Own

Monomythical • 166 HN points • 11 Mar 23
💼 Business Startups Venture Capital Banking Entrepreneurship
  1. Many startup employees are unable to afford buying equity in the company they work for, leading to missed opportunities.
  2. Traditional banks often do not cater well to the financial needs of individuals involved in startups or venture capital.
  3. There is a need for more institutional support and celebration of diverse backgrounds in the entrepreneurial and creative fields.

Is the Capital One/Discover Deal Good or Bad For “Competition”? Yes.

Fintech Business Weekly • 81 implied HN points • 25 Feb 24
💰 Finance Fintech Regulation Banking Acquisition Legislation
  1. Capital One's acquisition of Discover is a complex deal that has both good and bad elements for competition, creating a potential shake up in the US payments space.
  2. The CFPB is using once-dormant authority to supervise nonbank entities like World Acceptance Corp, focusing on risks to consumers.
  3. Acting Comptroller Hsu suggests creating a federal money transmitter licensing framework to better regulate non-bank companies providing bank-like services, highlighting potential risks in the growing role of non-bank firms in banking areas.

What Happened to the OCC's Chief Fintech Officer?

Fintech Business Weekly • 133 implied HN points • 10 Sep 23
💼 Business Fintech Banking Regulation Investment Startups
  1. The OCC's Chief Fintech Officer mysteriously disappeared from his role, raising questions about his background and qualifications.
  2. CFPB Director highlights Apple and Google's control over mobile payments, calling out potential anti-competitive practices.
  3. FDIC's Q2 Banking Profile shows declining net income, slightly reduced net interest margins, and continued unrealized losses in banks' securities portfolios.

Peacetime Bank Stress Tests: Who's That For?

Without Warning • 39 implied HN points • 19 Feb 23
💰 Finance Banking Capital Regulation Risk management Investors
  1. The purpose of stress tests for banks in peacetime is not necessarily to predict future crises, but to ensure banks have enough capital and that the tests are tough and variable.
  2. It's important for stress test scenarios to change and remain tough to prevent banks from manipulating their capital levels and misrepresenting their financial health.
  3. The public stress test process during peacetime may not have a significant impact on capital allocation to the banking sector, unlike crisis-time stress tests.

It's Getting Harder to Get a Loan

The Sunday Morning Post • 39 implied HN points • 25 Jun 23
💰 Finance Loans Interest Rates Economy Banking
  1. Banks are making it harder to get a loan due to higher interest rates and tightened lending standards across all loan categories.
  2. Rising deposit costs are influencing banks to be more selective in lending, preferring customers with deposits in their institution.
  3. Banks are tightening lending standards to protect themselves, leading to fewer loans offered and increased charges, covenants, collateral requirements, and reduced loan sizes.

CBW Bank, A BaaS Pioneer, Is Up For Sale: Exclusive

Fintech Business Weekly • 59 implied HN points • 17 Mar 24
💼 Business Fintech Banking Regulation Innovation Sales
  1. CBW Bank, a pioneer in Banking-as-a-Service, is up for sale, showing continued challenges in bank/fintech partnerships.
  2. CBW Bank grew significantly under new ownership, focusing on innovation and providing API access for startups and banks to build digital banking solutions faster.
  3. Regulatory shifts and challenges in innovation may have led to CBW's decision to sell, highlighting the impact of changing regulatory attitudes on banks like CBW.

Too Big To Fail

The Last Bear Standing • 160 implied HN points • 10 Mar 23
💰 Finance Banking Bonds Liquidity Regulation Risk management
  1. In the mid-2000s, banks faced a significant problem with growing leverage and inadequate cash reserves.
  2. The 2008 financial crisis led to emergency bailouts to address liquidity issues in the banking sector.
  3. While regulations and liquidity injections have reduced the risk of widespread liquidity crises in large U.S. banks, the 'too-big-to-fail' problem persists in the broader financial system.

China's Evergrande Mess

Diane Francis • 219 implied HN points • 18 Oct 21
💰 Finance Economics Investing Banking Real Estate Market Trends
  1. China is facing a big problem with its real estate market because of a crisis involving a company called Evergrande. This company has huge debts of $300 billion.
  2. This situation shows how tough it can be for big countries like China to handle major financial issues. They often manage to turn things around, but this crisis is particularly challenging.
  3. The Evergrande crisis could have serious effects not only for China but also for the global economy if it's not handled well. It's important to keep an eye on how this develops.