Happy Sunday,
Economy keeps adding jobs. CFPB finalizes credit card late fee rule. Synctera extends Series A. Argyle raises $30Mn Series C. NYCB gets $1Bn lifeline. Visa partners with DailyPay, Western Union. Robinhood launches retirement accounts for gig workers. Prism Data announces first-party fraud score.
New here? Subscribe here to get our newsletter each Sunday. For even more updates, follow us on LinkedIn (PeerIQ by Cross River).
Employers Add 275,000 Jobs In Feb
Let the good times roll. Employers kept hiring in February, adding 275,000 jobs on a seasonally-adjusted basis. Wage gains in February slowed, with average hourly earnings growing just 0.1% vs. the month prior, below expectations of 0.2%. The unemployment rate unexpectedly edged up to 3.9%. The Fed has moved to temper expectations of a shift to rate cutting, though investors are still betting on multiple cuts by the end of the year.
Image: Wall Street Journal
CFPB Finalizes Credit Card Late Fee Rule
The CFPB moved to finalize a proposed rule that would lower the typical credit card late fee from as much as $32 to $8. The final rule would apply to the largest 30-35 card issuers, which account for about 95% of outstanding card balances. The credit card industry collects around $14Bn in late fees each year, which the rule could lower by as much as $10Bn. Card issuers are, unsurprisingly, not a fan of the measure. They argue the rule will hurt the large majority of consumers who pay their bills on time.
Bank trade groups have denounced the rule, and the U.S. Chamber of Commerce has said it plans to “imminently” file suit in an attempt to block the measure. It is expected the Chamber’s suit will argue that the Bureau’s rule violates the Administrative Procedures Act by being “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.” Senator Tim Scott (R-NC) weighed in on X, threatening to attempt to use the Congressional Review Act to reverse the rule, though such an effort is unlikely to be successful. Using the CRA to reverse rules passed by executive agencies must be done within a specific 60-day window and requires a joint resolution.
Synctera Raises Another $18.6Mn
The banking-as-a-service space, which has seemingly been engulfed in negative news lately, had a bright spot last week. Middleware platform Synctera announced an $18.6Mn extension of its Series A, co-led by Fin Capital and Lightspeed. The company said it will use the incremental capital to “supercharge” its efforts to scale its embedded banking and finance business to support larger and more complex use cases in the U.S. as well as international markets. The company also announced its intention it launch a payment product, SyncteraPay, to enable companies with existing third-party payment provider relationships to use Synctera for ledgering and settlement, as well as support for FedNow real-time payments.
Payroll API Provider Argyle Raises Series C
Payroll API platform Argyle announced it has raised a $30Mn funding round, led by Rockefeller Capital Management. Bain, SignalFire, and Checkr also participated in the round. The fresh funding brings the company’s total equity raised to date to $100Mn. Argyle’s payroll APIs enable third parties, including lenders, to verify income and employment data in a secure, automated manner, without having to depend on error- and fraud-prone manual reviews of user-uploaded documents.
NYCB Gets $1Bn Lifeline
New York Community Bank, which has been the subject of much hand-wringing and speculation, is shoring up its balance sheet with a $1Bn investment. NYCB’s troubles have touched off fears that last year’s regional banking crisis isn’t fully in the rearview mirror. Unlike last spring’s failed banks, NYCB’s deposit base has been fairly stable, though it does face a concentration of loans for rent-stabilized buildings in New York City.
The funds come from a group of investors led by former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital, Reverence Capital Partners, and Hudson Bay Capital. In addition to serving as Treasury Secretary under Donald Trump, Mnuchin memorably took over IndyMac following its seizure by the FDIC during the 2008 financial crisis. NYCB also announced a sweeping revamp of its management team, with former OCC head Joseph Otting replacing Alessandro DiNello as CEO. Otting, Mnuchin, and representatives from Reverence and Hudson Bay will join NYCB’s board, which will shrink to nine members.
Visa Partners with DailyPay, Western Union
On-demand pay platform DailyPay announced it has partnered with Visa to make Visa+’s capabilities available to DailyPay’s users. The integration of Visa+ will enable DailyPay’s millions of users to more seamlessly manage and move their accrued but not yet paid wages into Visa+ linked accounts. Visa+ launched in April 2023, with a goal of making moving funds across platforms as easy and seamless as moving them within a given app ecosystem. Visa+ initially launched with support to bridge Venmo and PayPal, and has since expanded to include other Visa partners.
In other Visa news, the company announced it has teamed up with old-school remittance provider Western Union on cross-border payments. The two inked a seven-year agreement that will enable Western Union customers to send money to Visa cards and affiliated bank accounts in some 40 countries. The new developments build on Western Union’s work to integrate Visa Direct’s capabilities, which date to 2019.
Robinhood Launches Retirement Plans For Gig Workers
Last week, no-fee brokerage app Robinhood announced Robinhood Retirement for Independent Workers, a retirement plan offering for gig workers. The new offering will initially be available to workers on Taskrabbit, Gopuff, and Grubhub beginning this month. Workers will be eligible for a “boosted” match ranging from 1-3% of their contributions for the first year.
Prism Data Launches First-Party Fraud Score
Prism, the cashflow-based underwriting startup spun off from credit card startup Petal, announced the launch of a first-party fraud risk score offering based on cashflow data next week. Dubbed CashScore FirstDetect leverages open banking data to predict the likelihood of first-payment default by users who are applying for loans but do not intend to pay them back. The new offering is available to all existing Prism Data clients.
In the News:
Biden nods to ‘junk fee’ rule, housing in State of the Union (American Banker, 3/7/2024) President Biden highlighted the CFPB’s rule to rein in credit card late fees in his SOTU address.
U.S. Bancorp sheds consent order inherited from Union Bank (American Banker, 3/7/2024) U.S. Bank will exit the consent order stemming from MUFG’s infosec and operational risk controls.
Powell says Fed not “remotely close” to a central bank digital currency (Reuters, 3/7/204) Fed Chair Powell reinforced the Fed isn’t anywhere close to issuings its own digital currency.
Bank Runs Spooked Regulators. Now a Clampdown Is Coming. (New York Times, 3/5/2024) New rules from the FDIC, OCC, and Fed will aim to address the causes of last spring’s bank crisis.
Decoding the CFPB’s puzzling position on earned wage access programs (American Banker, 3/4/2024) Why did the CFPB weigh in on California’s EWA rulemaking?
Zelle transactions jumped 28% last year to $806B (Payments Dive, 3/4/2024) Transaction volume and value are up about 30% year over year.
Bitcoin Hits $70,000 Mark for First Time Ever Before Retreating (Bloomberg, 3/8/2024) Bitcoin has been on a tear lately, with some predicting $80,000 by month’s end.
Leaked Treasury Prime Docs Show Risks Of BaaS Business: Churn, Concentration, Slowing Growth (Fintech Business Weekly, 3/3/2024) Internal documents show Treasury Prime struggling with slowing growth, high churn.
Grasshopper Bank finds compliance time saver: Generative AI (American Banker, 3/7/2024) Can genAI be banks’ secret weapon to scale compliance?
Experian Consumer Credit Reports to Now Include Apple Pay Later Loan Information (Experian, 2/28/2024) Apple will begin reporting tradeline data for Apple Pay Later loans to Experian.
Lighter Fare:
Ex-McDonald’s employee shares the french fries hack that all workers secretly do: ‘Literally the best thing’ (NYPost, 3/8/2024) If you haven’t tried this on your McD’s fries, you’re missing out.