TFU | Nov. 25 – Dec. 8

Leading Off

Five federal financial regulators jointly published a statement supporting the use of alternative data in making credit worthiness decisions; Robinhood decided to halt its application for a special purpose national bank charter from the OCC; Goldman is ratcheting down its expansion plans for Marcus in the U.K. over concerns about its compliance burden; the NYDFS approved SoFi’s application for a BitLicense; Chime raised $500M in new funding; and Bloomberg explores how some of the Bay Area’s buzziest fintechs are growing their operations in New York.


In the News

U.S. regulators support using alternative data for credit assessments.  In a joint statement by the Federal Reserve, OCC, CFPB, FDIC, and NCUA [full text], the regulators note that alternative data, such as cash flow information, may help firms improve consumer access to credit, decision speed and accuracy, and pricing decisions. The regulators also advocate a “well-designed” compliance programs to address credit decision risks.

Robinhood pulls OCC charter application.  The stock-trading startup is pulling its application for an OCC bank charter, submitted earlier this year. A Robinhood spokesman said the withdrawal was voluntary and a source close to the decision said it does not represent a change in plans. The withdrawal follows a botched announcement of a checkings and savings product late last year.

Goldman slows U.K. expansion of Marcus.  Goldman Sachs is planning to “deliberately slow down the growth of Marcus” in the U.K., citing concerns about running afoul of post-financial crisis rules that would subject it to additional compliance burdens if it holds at least £25 billion in customer deposits. Marcus “currently holds around half of that [£25 billion total],” a year after debuting in the U.K.

NYDFS approves SoFi’s BitLicense application.  The New York Department of Financial Services (NYDFS) has approved SoFi Digital Assets, a wholly owned subsidiary of SoFi, granting it a money transmission license as well as the virtual currency license, colloquially termed the BitLicense. SoFi Digital Assets is the 24th company to receive a cryptocurrency approval through NYDFS.

Global authorities take another shot at stablecoins.  In a joint statement, the G7 working group on stablecoins, the European Commission, and the European Council warned that “no global stablecoin systems will be allowed to operate in the EU until legal, regulatory and oversight issues have been addressed,” citing concerns about a variety of risks to consumers, privacy, AML efforts, and others. 

Apple launches Express Mode in London.  Apple rolled out a new option for travellers on London’s transit network, enabling commuters to tap and go on their iPhones without validating their identity via passcode or Face ID. This has long been a feature of Google Pay on Android phones. 

Senator introduces draft privacy bill.  Senator Maria Cantwell (D-WA), the ranking member of the Senate Committee on Commerce, Science, and Transportation, introduced the Consumer Online Privacy Rights Act [full text], a new bill that would set federal privacy standards related to “information that identifies or is reasonably linkable to an individual residing in the U.S. or a consumer device.”

Chime raises $500M. The digital bank has quadrupled its valuation in less than a year to $5.8 billion thanks to a $500 million Series E round. The money will be used to continue the company’s rapid growth, including developing new products, doubling headcount by 2020, and potentially acquiring competitors.  

California fintechs ‘invade’ NYC.  With Stripe building up its presence in Manhattan, Bloomberg considers fintechs’ shift from the Bay Area to the Big Apple. New York is attractive to many firms because of its deep talent pool and proximity to financial services, although none of the fintech unicorns increasing their footprint in NYC (Stripe, Plaid, Affirm) plan to move their HQs from California. 




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