Season’s Greetings,

Consumer confidence improved as inflation moderated. Wells Fargo hit with monster $3.7Bn enforcement action. Sen. Toomey dropped a crypto bill. Acin raises $24Mn Series B. Chime tried to buy DailyPay (twice). GoDaddy refines its payment capabilities.

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Consumer Confidence Hits Eight-Month High

Consumer confidence hit an eight-month high in December, thanks to easing inflation and dropping gas prices. The Conference Board’s index rose to 108.3 this month from 101.4 in November. Impressions about job prospects remained robust, with 47.8% of respondents saying they expected jobs to be “plentiful” over the next six months. Encouragingly, expectations about future inflation dropped to their lowest level since September 2021.

Image: The Conference Board

Meanwhile, home sales continued their 10-month decline. Sales of previously owned homes declined 7.7% in November to a seasonally-adjusted annualized rate of 4.09Mn.

Wells Fargo Hit With $3.7Bn Enforcement Order

The CFPB ordered repeat offender Wells Fargo to pay redress and fines totaling $3.7Bn last week. According to the bureau, the bank had systemic failures and gaps in compliance that led to significant consumer harm.

Per the enforcement action, Wells mismanaged auto loan borrowers’ accounts, including by incorrectly applying borrowers’ payments, improperly charging fees and interest, and wrongfully repossessing borrowers’ vehicles. Wells also failed to refund fees for certain add-on products when borrowers repaid their loans early.

The CFPB also found Wells improperly denied thousands of mortgage loan modifications, which, in some cases, led to borrowers losing their homes to wrongful foreclosure. The bank was aware of the problems for years before it finally addressed the issue, the bureau says.

The enforcement action also finds Wells Fargo illegally charged “surprise” overdraft fees, in which customers had enough money in their account at the time the bank authorized the charge but were subsequently charged a fee anyway.

Finally, the bureau says Wells Fargo improperly froze more than 1Mn users’ accounts based on a faulty fraud filter, resulting in account holders being unable to access their funds for at least two weeks on average.

Wells Fargo may want to brace for more pain. CFPB Director Chopra said the agency isn’t pleased with the bank’s progress addressing these issues and that the current action doesn’t give “immunity” from further penalties to current or former Wells Fargo execs. Chopra also floated the possibility of additional constraints being placed on the bank, should it fail to progress towards resolving its issues quickly enough.

Toomey Floats Crypto Bill On His Way Out

Retiring Sen. Pat Toomey (R-PA) dropped another crypto bill during Congress’ lame duck session. While the current bill is almost certain not to pass, it could serve as a guide to legislators in next year’s session, who, no doubt, will face pressure to address numerous questions related to digital assets. Toomey’s proposed legislation would give the OCC authority to license stablecoin issuers, retain privacy for stablecoin transactions, clarify that stablecoin issuers that don’t pay interest wouldn’t need to register as securities, and would enable nonbank entities to issue tokens.

Still, while Toomey’s party will hold a slim majority in the House next year, Democrats will retain control of the Senate, meaning any crypto legislation would need to be a compromise that could secure approval in both chambers of Congress.

Ops Risk Startup Raises $24Mn

A group of top U.S., U.K., and European banks have backed operational risk startup Acin. The company raised a $24Mn Series B from the consortium, which counts JPMorgan, Citi, BNP Paribas, Barclays, and Lloyds as members. Acin uses its network of members to quantify non-financial and operational risk through a standardized inventory. Banks can potentially benefit by reducing the amount of operational risk capital they need to hold, thus improving their returns.

Chime Tried to Buy DailyPay for $2Bn

Leading U.S. neobank Chime was unsuccessful in multiple attempts to acquire earned wage access platform DailyPay, reports revealed last week. The first offer, in May, $300Mn in cash, $1.2Bn in stock, and $100Mn in restricted stock. The second offer, which came a month later, raised the stakes to $700Mn in cash, $1.2Bn in stock, and $100Mn in restricted stock.

DailyPay declined both offers after its board decided they undervalued the company.

GoDaddy Refines Payment Capabilities

Most people don’t think of domain registrar and web hosting giant GoDaddy as a “fintech.” But the company has been working to expand the payments tools it offers to customers by integrating capabilities necessary for operating ecommerce businesses. GoDaddy has made improvements that make it easier for sellers to use open-source platforms like WordPress or WooCommerce to build online stores. It also now offers a single dashboard that enables merchants to track and support sales and payments across physical locations, web stores, and social channels.

In the News:

Digital Dollar is a Long Way From Reality, Treasury Official Says (American Banker, 12/21/2022) Nellie Liang expressed little urgency over the federal government’s need to prepare for the potential launch of a digital U.S. dollar.

Basel Committee Finalizes Guidelines for Supervising Bank Crypto Exposure (American Banker, 12/18/2022) While the guidelines have little impact in the U.S. today, they could serve as a starting point for any future crypto regulation in the U.S.

FHFA Will Require Preapproval for New Fannie Mae, Freddie Mac Products (American Banker, 12/20/2022) The FHFA published a rule that will require Fannie Mae and Freddie Mac to provide advance notice of new activities and obtain approval prior to launching new products.

TransUnion Predicts 2023 Delinquent Rate Rise for Credit Cards and Personal Loans (Fintech Nexus, 12/16/2022) TransUnion’s latest study found 54% of Americans stated their incomes were not keeping up with inflation.

Sam Bankman-Fried Is Set for Extradition to U.S. (New York Times, 12/21/2022) SBF is set to be flown back to the U.S. after telling a judge that he agreed to be extradited.

As Fintech Funding Slows, Payment Startups Turn to Accelerators (American Banker, 12/19/2022) Valuations have put pressure on fintech capital.

Visa Teases Ethereum Collab, Aims to ‘Actively Contribute’ to Crypto Development (Decrypt, 12/19/2022) Visa released a paper outlining how Visa could one day collaborate with the Ethereum network on auto-payments.

PayPal Partners With Crypto Firm ConsenSys To Create Convenient Way To Buy Ethereum (ETH) (The Daily HODL, 12/19/2022) MetaMask will integrate PayPal into its platform to provide investors in the U.S. with an easy way to buy ETH.

How 2022 Hastened the Decline of Overdraft Fees (American Banker, 12/19/2022) An overview of American Banker coverage from 2022 that highlights the evolution of overdraft policy.

Skyscend Joins Visa Fintech Fast Track Programme (Finextra, 12/20/2022) Skyscend is a SaaS platform provider for supply chain finance.

Visa, Klarna and Other Payment Firms Lend Scale to ‘Green Payments’ (American Banker, 12/21/2022) Payments companies leverage transaction data, merchant spending activity in environmental moves.

Splitit, Worldline Deliver Card-Based Instalment Payments (The Paypers, 12/21/2022) The solution targets Worldline’s network of merchants and marketplaces.

Lighter Fare:

ChatGPT Can Negotiate Comcast Bills Down For You (Vice, 12/20/2022) A potential real-world use case for the AI bot that has taken the internet by storm.