580 Breaking Banks at fintechXchange Ecosystem Building & Hot Takes for 2025

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols.

And this is Breaking Banks. Breaking Banks was the proud media partner of the Fintech Exchange, hosted by the Stena Center for Financial Technology at the University of Utah. Over the next few weeks, we’ll be releasing hours of content recorded on site with attendees and speakers.

This series is powered by U.S. Bank. In this first episode, we have U.S. Bank’s own Megan Kober joining me with the University of Utah’s President, Taylor Randall, and Stena Center Executive Director, Ryan Christensen. And we talk about the importance of ecosystem building.

Then Alex Johnson of Fintech Takes and Jason McCoula of Fintech Business Weekly. Well, we’re back in the hot seat to talk about hot takes for 2025, live from the Silicon Slopes. Between the Spice and Fintech headlines, the conversation goes from open banking, CFPB, and Chopra, to Baz Island, Synapse, Patriot Bank with its BSA and AML challenges, to what is really possible with bankruptcy proceedings.

The episode is action-packed, and not to give too much away, we talk about the speculation markets and the fact that Zuckerberg getting divorced. Join us this week on Breaking Banks, powered by U.S. Bank. So Silicon Slopes has been a thing for a while, like quietly growing.

And I’ll be honest, MX first lured me out and they’re like, hey, we’ve got the Silicon Slopes thing going. I’m like, you said slopes. You had me at slopes, right? Like there will be skiing involved.

But it feels like Utah is not just exploded on the tech scene, but with the Stena Center around financial technology, like really has planted a proverbial flag on top of the mountain about Utah is here and has been for a while, but really is crystallized. And President Randall, I’m very curious, from the university’s perspective, what was the impetus? Like how did you look at and say, Fintech, this is where we’re going to go? You know, the University of Utah had been involved with Silicon Slopes since its inception. And we were following successful entrepreneurs.

And we noticed a really interesting pattern. And that was many of the alums of the University of Utah were in Silicon Slopes, but they were actually interested in Fintech. And they were starting Fintech companies.

In fact, if you look at many of the big exits in Fintech, they came from founders from the University of Utah. We started to say, well, what, where did this come from? It turns out many of them had come through our finance program at the University of Utah and had self-taught themselves to code. And so our finance program is incredible.

Our computer science program is also incredible. And we started to say, you know, maybe there is actually not even a niche, right, but literally a garage door to drive through here. With a new way of, I would say, supporting industry, of educating students, and driving the economy of the state of Utah.

And so I simply sat down on a set of probably six different lunch meetings with those founders that came from the University of Utah, and we began to hatch the idea of a Fintech center. Well, in the show, I’ve been involved in ecosystem building in clusters around the world, including Chicago. And I’d say often the objective is amorphous, other than we want to be ranked on Deloitte’s list of top ecosystems for Fintech.

Ryan, what are the tangible goals of the center to say, this is what we look to accomplish? We have a few of them. And the way we think about our goals is we’ve got program areas. So in our program areas, we focus on academics.

We focus on labs and research. We focus on venture. And we focus on this annual conference.

And then we’ve got various goals around those different programming areas. It’s really centered around our multidisciplinary thesis of Fintech, which is it’s the intersection of finance, obviously, technology innovation. But then also, when that technology innovation starts to touch the US financial system, you’ve got a whole host of regulations you need to be thinking through.

So that’s, I think, the very first thing is we think about what the approach is, and we built bottom-up with that approach. And our goals are centered in, OK, in academics, we have tangible goals around enrollment. So we want to have X number of students in our intro to Fintech class, and that’s where the funnel starts.

So you just start getting people interested in the intro to Fintech. Then they may go into the minor. Another goal is to have our master’s out next fall so that students can start studying master’s degree in Fintech and graduating a good number of students through that.

We also have goals in terms of capstone projects that we have students working on and class development. So we’ve got several goals in the academic space. In the research and lab space, we’ve got some pretty lofty goals around getting access to different platforms that are in-production platforms.

So maybe an example would be we’ve worked with LonePro, and they’ve given us access to their production platform with problem statements for students to work on. And then those students get to work with the LonePro professionals as well on those problem statements. And LonePro has been hiring directly out of those labs.

So that’s another tangible goal we have is, OK, where are the students being placed? And what is our placement rate? And what kind of incomes are we seeing from those placements? The other is the entrepreneurism that we have at the school and really how many companies can we really help with funding opportunities, with those really early, hard-to-get funding opportunities so that they can grow. And then we look at our conference, and we say, OK, it’s a little hard sometimes to say, how do you measure who the best speakers or maybe podcasts are that want to participate with? They have neon signs. Yeah, neon signs.

Hot sauce. Hot sauce, I know. I’m waiting for the question when I have to taste the hot sauce.

But we’ve seen some tremendous growth in our attendees, and I think in terms of the content that we’re putting on the stage. By the way, that fits directly with what we’re trying to do as a university. We are trying to create incredible human capital that’s entrepreneurial, and then we measure our success by equity values of companies that are founded by our alums.

I had the chance to talk with a Utah-born, bred founder last night. We were talking about some of the challenges, and I’d say they were very similar to what we face in Chicago. But they said, challenge one is talent, challenge two is talent, challenge three is talent, challenge four is angel investment.

It sounds like you’re hitting all of those, and having the chance to talk to a couple students this morning that were volunteering, I was blown away at how grounded they are for, I think it was a sophomore and a junior, around their understanding of the ecosystem. And Megan, I’m curious, from a U.S. bank perspective, what are your goals in being so involved so early with the exchange? Yeah, well, when the University of Utah started their FinTech Center in 2023, I was like, I need to get involved. And so… I got a call from you.

Yes. So they found you. Go, Megan.

And I was impressed. I thought, I need to keep up, because you started saying a lot of things about FinTech I didn’t know you have. Yeah, no, absolutely.

And so, we’ve been involved since 2023, but really, at U.S. Bank, we think about ecosystem building as a catalyst for innovation and growth, not only for our products and services, but for the communities in which we serve. And so, we think about it in a couple different ways. One of them is collaborations with FinTechs to create customer-centric products and services.

And then, the second way is talent, like you mentioned, finding and developing and circulating ideas within the FinTech space. And then, thirdly, creating sustainable solutions that not only impact our communities, but also the FinTech system as overall. And so, what I really love about this conference in particular is that it combines industry, academia, and policymakers, not only to share ideas, but also to move FinTech forward into a future that we all can agree on.

So, President Randall, I’m curious when you lay out this lofty vision for what you’re going to accomplish, what was the biggest challenge for actually getting it to coalesce? It’s one thing to have an idea, it’s another thing to have a vision, it’s another thing to actually really build the pillars under that castle in the sky. You know, if you think about the vision we’ve laid out, it actually requires more than a university. And so, I think the first thing we had to do is find a set of entrepreneurs that had been successful, that bought into it, and were willing to invest with us.

And buy into the fact that this was going to be a long-term community investment that we were all going to have to put time and effort and resources into if we were going to really build this. And once you started to get those individuals, you quickly saw that banks followed. And as you know, this is such an interesting, I think, melange of traditional banking, of new technology, and people that are willing to embrace change.

It takes all of those elements to come together. And there’s probably a story around activating each one of those to get this whole system moving. Well, speaking of activation, that is part of your job, Brian.

When you got into the seat as kind of the inaugural director, what most surprised you about the role, either pleasantly or unpleasantly, in terms of, did you have a moment and say, what have I signed up for, and what could others learn from that? Abject fear is what I felt at first, because one, I didn’t come from academics, and it’s different. And so learning to operate in that system, which has been really enlightening. It’s been a really great experience.

The other very first experience that I had was actually when I sat down with President Randall to talk about the role. And I found myself relatively smart about some things in fintech, and I had a list of hard questions that I was going to kind of put the president through his paces on to see if he was really serious about this or not. And about 30 seconds into the conversation, I put the notepad away, because he clearly had a big vision and knew a lot more than I did.

So honestly, a lot of humility is what I felt was, how do you just kind of direct the energy that was already there, and then work with faculty and their goals, and work with industry and their goals, and get them together to have some of the successes that we’ve had. But really, it’s a lot of directing, I guess, of people that already have the same passion, and trying to get it focused into a spot where we can have some results. So, Megan, as someone who works across ecosystems, what defines those ecosystems that are doing very well and beginning to excel, and which ones are either struggling or they’ve become a cluster in name only? Yeah, and so when I think about successful ecosystems, I think about approaching it with a collaborative mindset.

So first of all, when you enter any ecosystem, you need to be super clear about your objectives, whether you’re driving innovation, or developing talent, or moving new products and services forward. And so what really attracts us to Utah is just the combination of industry, startups, academia, and policymakers all coming together to collaborate on ideas. And I think that melting pot of ideas and being open-minded really drives ecosystems forward.

And I’ll add one other thing there, is intention is so important. Yes. And just saying here, this is our intent, and being kind of loud and proud about it really, and then you find the people that have the passion, because all the ingredients are here.

But saying, this is the direction we want to go with some real intent is incredibly helpful. Yeah, and just adding on that intention too, I think it’s really important too. We all approach industries from very different perspectives, and so I think being open to co-collaborating and creating ideas, and it’s not just the value that you get out of it, but what can you contribute to this ecosystem to really make it whole.

President Randall, I’m curious, are you also beginning to partner more with these other ecosystems and clusters, where you’re finding there are other universities beginning to develop clusters around this, either in the U.S. or internationally? Is there a broader strategy of an ecosystem of ecosystems? You know, we do. We’re at the beginning, I would say the beginning, the first chapter of trying to explore that. One of the programs that we have involved here is a program called the Master of Business Creation, and this is a very different degree that’s really more of an accelerator.

And what you do in this degree program is you have to come with an idea, you do not get to explore the idea, you’ve got to be ready to start executing, and we launch companies. And in our first cohort, we had a company that went from zero to 60 million in revenue. You don’t take exams, you have board meetings.

The lectures are very short and concise, today you’re going to learn how to set up your sales team, let’s get going. We don’t admit just one person, we admit a founding team. And so what we have been doing is actually we’ve started to expand this program globally.

And interestingly, FinTech is a theme, so we recently opened a program in Accra, Ghana, and we have, I believe, 30 entrepreneurs in Ghana, and many of those entrepreneurs are focused on financial inclusion and FinTech in the developing world. And so that is one of the mechanisms we’re actually using to expand our ecosystem with FinTech as a major, major theme. And we’ll also be opening in a very short order in Europe.

So building on this for a second, so financial services, incumbents are ripe with those who want to resist change. I think academia is often very much the same, what you just described is a very radical idea when it comes to education and learning, almost apprenticeship, right, with a mentor and what you’re building. How did you overcome the internal obstacles to the, that’s not how academia works? You know, I think I’ve spent a whole career with people that surrounded me, that mentored me, that taught me how to innovate in higher education.

And the arguments for us having to innovate, the imperative for us having to innovate is just so strong right now that I’m actually finding it relatively easy. And actually finding many, many entrepreneurs among our faculty that are jumping on board and wanting to do it. They’ve just been shackled by the incumbency of the not how we do it.

Yeah, they have. And I’ve got a dozen stories, if you want to do this on another podcast, but they’re funny. I mean, they’re mostly humorous stories, but sad in a way.

Megan, we talk about this quite a bit with your team, having the chance to get together. You and David get to live in this ecosystem that is fast moving and fast moving with the startups and the VCs and the forward thinkers and the forward thinking institutions, but you have to bring it home to a very large institution that has its own share of not how we do it here, although I’d argue US Bank has done better than most of its size of really being forward thinking. How do you bridge that gap, the value that you’re getting by being part of this ecosystem? How do you bring it home? Yeah.

Well, when we think about ecosystems, we really think about it in a systems driven way. And so it starts with the entrepreneur at the center. And then you layer on these supporting like education, venture capital, accelerators, and then large corporations like ourselves.

And so what I’m really passionate about is those partnerships between fintechs and large banks, because not only does that drive our products and services to create more customer centric experiences, but it also helps, it creates ripple throughout the economy and the culture and communities in which we serve. And so I’m really, really excited about the recent report that the University of Utah and the center has shared. So Ryan, would you be open to sharing a little bit more? By the way, before he shares, I just want to say forward leaning organizations that are well established, like Megan’s organization, are critical to these ecosystems.

Because you can’t build enough stability with just the entrepreneurial movement, right? You actually have to have forward leaning incumbents that are willing to come in and say, you know, that’s a technology we want to support, or those are individuals that we want to support. So thank you. I mean, that is one of the pillars for us, our ecosystem.

One thing I’ll add there that I found very interesting that came out of the Synapse Evolve disaster is that it went upmarket. You had Stripe move to Fifth Third, a very large player, to continue doing their services. Because I think that larger incumbents are starting to see the success that it’s had out there when it very easily could have shattered into a thousand pieces and maybe not been able to be picked up.

But it instead went upmarket. It’s been a very interesting kind of thing that I’ve watched. But in terms of the report, yeah, we finally finished a report we’d been working on for a little while.

And I’ll tell you what was a little bit difficult about it was defining FinTech, and that was the first challenge. The first two pages of the Alloy Labs RFI response to the interagency request on third party relationships is, we need a better definition of FinTech, because it doesn’t just mean banking as a service. And so let’s at least figure that out, because we can’t study that that we don’t know.

And so we need to corral this a little bit. And what happens is you end up leaving some things out that maybe you wish were in, but it gives you a structure. And within that structure, what we found is we have a pretty robust ecosystem.

And it’s generating about a billion dollars in wages in the state of Utah, with an economic output of about $7 billion, which is incredible. And it’s the third highest wage category of all industries in the state of Utah. That’s about double of the average wages in Utah.

This is all just FinTech companies. So that excludes also the employees that are sitting at banks that are working on FinTech, or some of the Bass partnerships that you have at banks in Utah, because there’s a lot of Bass activity in Utah. That excludes that as well.

So it’s a very interesting insight. Some stats that stood out to me was you have 67 FinTechs here, which is quite impressive. But of the billion dollar wages, one job in FinTech creates almost three jobs in the broader community, which is such a ripple effect into the state of Utah.

Stunning. Brett Roberts from Lone Crow was telling me this morning that Utah is almost exactly 1% of the US population. But if you look at the number of Keck jobs and FinTech jobs, it’s almost five or six X that in terms of concentration, which I thought was a very interesting stat.

Not what I think of when I think of Utah, where you think of the traditional hubs being, of course, San Francisco, New York, Chicago being a global hub, but more markets centric. But here is Utah in a very broad base. And I’m curious, across the board for any of you, why is it such a broad base? Because you find in San Francisco, there’s concentration around lending and wallets, Miami around crypto now.

New York has both markets and consumer facing. Chicago is very much capital markets. But you see the full gamut within Utah.

Any ideas why that is? I’d love your opinion. I think about this a lot because as you’re building an ecosystem, you try to study the past and see what successes are. I would say there were some really critical moments in the evolution of the Utah ecosystem.

It goes back to perhaps the St. Germain Act, where industrial loan corporations were established. And after that, you just saw a flood of talent globally come in to start staffing these banks. And of course, they get tired of working at those banks and they start exploring different ideas.

When you took that financial talent combined with a tech explosion that occurred outside of fintech, it started with WordPerfect and Novell. But that talent was looking for outlets. And I think those things kind of all came together to build what I think is just at the beginning stages of a pretty remarkable financial technology environment.

Ryan, for those looking to partner with the Stena Center, whether maybe you have to answer it twice for corporates like U.S. Bank or for startups, what can they expect and what are they going to get and what should they expect the process to look like? Yeah, that’s a great question. And I did want to double click on something that President Randall mentioned around the ecosystem and the industrial banks. I think that’s been such a key ingredient.

You’ve got 85 plus percent of industrial bank assets in the state of Utah. And the industrial banks have tended to be fairly innovative. And so they were kind of early entrance into the partnership banking, Bass Banking.

And because of that, we’ve got a pretty long history of doing this and some regulators that are very familiar with it. So if you’re going to go do a similar service in another state, you can do it. But the regulator is going to be seeing it for the very first time.

You’re not going to have the same talent pool. And so kind of to your broad, broad spectrum kind of comment, that’s enabled payments and it’s enabled embedded lending. It’s enabled so many different things, deposit gathering, that I think to your point, the industrial banks are kind of maybe an unsung hero here.

Well, and I think you want to underscore the importance of regulators that have gotten used to working in a different set of frameworks than a lot of the other states. Something I’ll be talking with Brandon Millhorn about later. It is one of the advantages, one of, for a two tier system is states can take different approaches like Utah has.

But if you think of the partnering, so you have an advantage with regulators. Is there some advantage for startups coming here, working with Stata Center, with the regulators? Yeah, so that’s one of the things that we really try to work on is, we’ve got a project right now that hopefully we’ll hear more about later. But we think there’s a new innovation in regulations around FinTech that we can be helpful on.

And so we’ve gathered the heads of the industrial banks, the president of their association. We sat down with the regulator. We sat down with a few of the legislators and said, let’s start thinking about this.

And brought in some industry participants and we’re starting to germinate maybe some next generation FinTech enabling sandbox around some innovative thinking, I guess, on the regulatory side. So that’s, it’s, I’m maybe teasing there a little bit, but I think that’s kind of how the process works. But if you’re maybe a smaller company or a larger company that wants to partner with the Stata Center, I think there’s several ways.

We mentioned workforce development. So just talking to the FinTech Center about how do we create the pipeline for the talent to end up in your organization through internships, through just hiring graduates and understanding which people are graduating with what talent. Another way is through research.

We have several companies right now that we’re working with, for example, on some AI enabling work. We have a company that sees a lot of call volume into their customer service and they’d like to figure out how they can get in front of that call because, you know, that’s expensive and it’s not always the best experience for the customer. So how can we take some of our learnings using AI on why those calls are being generated and get something in front of the customer right when they’re going to start having that problem that they’re going to call in about.

So we’re doing research around how to identify that and then act. We’re also doing some research with a company that has a very large workflow around fraud prevention and looking at how do we use AI to essentially automate that workflow that they have and start doing some testing in a lab that we have and see how that works in the lab so that they can then go and implement that into their actual workflow and production. So some very interesting ways to partner.

And then sponsoring the exchange. There’s a variety of ways that people can partner with us. Where can they learn more? Stena.

Actually, I should know my website. We’re going to rerecord this part, right? Yeah, we’ll put it in the call notes. Megan, I’m curious, what themes are you pursuing that if someone, whether it’s a larger organization or a startup and they want to work with U.S. Bank, what themes are top of mind for you right now? Yeah, so we’re really excited because we just announced our AI Center of Excellence.

So we’re really excited to see how AI is going to be a catalyst throughout our business lines and also with our customers. But we work across the enterprise, so we handle anything from consumer banking to business banking, payments, wealth management, and everything in between, fraud, data. So we’re always looking at ways to partner, both bringing companies into U.S. Bank to accelerate our products to market or selling our payment rails and embedded payments and FBO solutions to emerging technology companies as well.

Well, and I will say, because one of our portfolio companies I had introduced you to on the AI front was blown away with how nimble and open U.S. Bank was and it was a pleasant surprise on their front. President Randall, if another university is interested in either pursuing this idea of how do we create an accelerator based education program or even just an ecosystem, not necessarily fintech, how can they get in touch with some of your best practices? You know, one, we always have a partnering model. And believe it or not, between universities, my overarching theory of leadership is that the world’s problems are so large we should leave the competition on the football field.

Let’s just tackle these problems together and figure out how to solve it. But we’re always open to talking, to tours, and it turns out when anybody visits us, we learn as much from them as they might learn from us. Fantastic.

Well, we can do another episode on the need to get rid of the portal within the football field, but that’s a separate hot take. Thank you, guys, for letting Breaking Banks be part of this and sharing your hot takes. Thank you.

Appreciate it. Okay, well, this is a very special live edition of the fintech recap podcast. My name is Alex Johnson, the creator of fintech takes and I am joined as always by Jason Mikula, creator of fintech business weekly.

Jason, it’s good to see you in person. I was going to say our first in-person encounter of 2025. It is.

It is indeed. And yeah, the first, I think, live podcast that you and I have done together, at least since we were also joined on stage by our friend Jason Henricks, who is also here. Jason, number two or Jason, number one, if you prefer to think of yourself that way.

Thank you for hopping on fintech recap. We’re delighted to have you. And for lending us the equipment, I guess.

This is your show. This is literally your show. I promise not to derail it.

And well, I can’t promise not to swear this time. Oh, there may be swear. Okay, well, that’s fine.

None of us represent the views of our employers, so like we’re fine there. I’m trying to get Kia to swear on the podcast, but we haven’t gotten there yet. I know.

I know. I’m still working on that. All right.

So as we do on this show, we’re going to run through some news stories from the last month or so of what’s been happening in fintech. Henricks, I don’t think you’ve been on the show when we jumped in the boat and gone to Bass Island. Should we take a quick trip? There should be no tourists on Bass Island.

Well, you’re not a tourist. I like to think of you as like a survivor from the last time the volcano blew up. So you can just hang out with us.

But maybe, Mikula, can you walk us through some of the stuff that’s happened since the last time we talked? Yeah, absolutely. So a couple of interesting developments. The most headline grabbing one that is based on a filing in the Synapse bankruptcy, but not actually one of the immediate parties to the bankruptcy.

I’ve learned a lot about navigating and interpreting court documents. You have. And basically, the situation is a former Synapse employee is seeking to use the company’s DNO directors and officers insurance policy coverage in relation to a legal expense, which if you read through the document, is a subpoena from the Southern District of New York Department of Justice.

I will say that that’s consistent with other sources I’ve spoken to about the idea that there is some sort of open criminal investigation, open grand jury looking into the matter, including issuing subpoenas for documents and testimony related to the case. I also understand that in addition to SDNY, that local office is coordinating with Maine Justice, meaning like the Maine DOJ, as well as the money laundering and asset recovery section, MLARS. What this means in practice and when we may learn what, if any, criminal case could come out of it, who knows? And then the second quick tidbit, actually, you’re the one who brought this to my attention.

So I did. Thank you. Yeah, I’m usually on top of the bass.

I got to one before you. I was very proud. This is why I have to have a good network of friends, informants, and spies.

Well, you were the first person I thought to text. I was like, I got to text Jason. Yeah.

This is why I’m glad we’re on a text chain friendship relationship. That’s right. Patriot Bank, which is an OCC chartered bank, in an 8K filing revealed that it had entered into a material definitive agreement with its primary regulator, the OCC.

The information contained in the 8K basically made it sound like this stemmed primarily from BSA, AML issues, no surprise to anyone who’s been following the Bass and Partner Bank space. There were a couple of notable elements, the most significant one being that there were elevated minimum capital requirements, which we’ve only seen in, I think, a very small number of these Bass-related orders, and that the OCC has designated the bank to be in troubled condition. So, yeah, that’s the recap on Bass Island.

What’s your response to that? Well, I mean, maybe Henrik, you can go next on this. I mean, what jumps out to you there? Well, I mean, we talked about this with Kia months ago, maybe a year ago. It was warm.

That’s all I remember. It was still warm. So not now.

The question that was raised by Kia was, is it a matter of when, not if, there were going to be criminal charges or at least criminal investigation in regard to Synapse and Evolve? And my point at the time that I’m going to stand by is that amount of money does not go missing for that long unless someone is moving shells around to further disguise it. And with McWilliams at the helm, the fact that she has not been able to get to the bottom of that as a sophisticated attorney with deep regulatory ties and ability to navigate, says something is afoul, right? Like something does not smell good in the state of Tennessee. Arkansas.

I mean, that’s where the smell emanates from. Mentioning McWilliams, the Synapse bankruptcy trustee and former FDIC chair, I mean, something I’m very interested to see is with the presumably impending turnover at the federal bank regulatory agencies, in the bankruptcy hearing, she mentioned, you know, I’m going to be in touch with the new people in these roles on January 20th. And I believe she said something to the effect of, like, it’s both a warning and a threat, something to that effect, which, you know, I have to say, I’ve been disappointed at the lack of at least any public involvement from the FDIC, OCC, and the Fed, as far as sort of helping, like, get this to some sort of resolution.

I have no idea what’s happening behind the scenes. But based on McWilliams’ comments, it sounds like they haven’t been particularly supportive of getting this to a resolution. Hopefully, you know, new leadership provides a fresh opportunity and maybe a change of posture there.

Yeah, I mean, I think that kind of the thing you guys are both touching on that I agree with is, like, what is possible through bankruptcy proceedings is just very limited, right? Like, and we’ve listened to all those calls multiple times, and Jason’s been on every single one of them where it’s like, they all get on, they all give status updates, nothing really changes. There’s no ability for the judge to do anything. There’s no ability for McWilliams to do anything.

And so nothing really gets resolved. And I think that you make a really good point about the regulatory agencies like McWilliams, the judge, all of the customers involved, they’re all, like, begging the regulators to get involved. And at least publicly, we haven’t seen any of that happen.

So that’s one avenue where they can put pressure on and try to get to some type of resolution. But I want to go back to what you said, Henriks. I mean, I totally agree with you.

I was initially more on the side of taking the bet that this was more just like reconciliation costs. There you go. There’s your first cast.

Do you have to do a shot of hot sauce? I might have to, yeah. We have Breaking Bank’s hot sauce here. Courtesy of Mr. Henriks.

And the longer it’s gone on, to your point, that’s where it jumps to my mind as, like, oh, my goodness, we have a problem here. Because at a certain point, no matter how tangled the knot is, you should, if you’re patient and experienced in doing that, be able to untangle it, at least to some degree. And the fact that we haven’t made much progress there definitely suggests that you’re right.

There is some money missing due to some cause. And I think the fact that the Southern District of New York is getting involved now certainly suggests that they’re exploring that angle. And I would agree that that’s probably where that lands.

Real quickly, before we move on to our next topic, as it relates to Patriot Bank, I mean, I guess this seems very consistent with the last 18 months in terms of small bank, unprepared to dive into the world of banking as a service, fintech partnerships, that kind of stuff. BSA, AML is always where they get hit relative to other things. I guess the troubled condition was the part that, as you pointed out, stood out.

I don’t know. I mean, I guess my initial reaction to that is just that this is another illustration of how far down the spectrum of banks, from a size perspective, fintech companies were going looking for partner banks. Like at a certain point, size and sophistication of the bank does enter into things a little bit.

Hendrix, what’s your reaction to that? I mean, I think about something you had said around Evolve and the lack of oversight being a feature, not a bug. Yeah. Right.

And it raises the question, not on your list of news items, but I think looking at, you know, CBW Bank being sued by the FDIC and what I find interesting in the last week is that you have an Americas brief from the ABA, the Bank Policy Institute, which actually is the biggest banks. Like that’s their, in addition to the ABA, they have their own separate lobbying group. And interestingly enough, the National Bankers Association, which, you know, represents minority depository institutions.

What I find interesting is if you look at the BSA AML trouble that, you know, CBW has ostensibly found itself in and the size of the fine that, you know, they say is forcing them into a troubled condition, right? Which raises a question, though, it’s like for that size of bank, it seems like a very large fine. But if you look at the size of the business and the lack of controls related to it. Well, and FinTech allows you to really expand the scope of the things you touch without being a big bank.

Exactly. And they had two people with limited experience in BSA AML, one with limited experience in bank getting to say, oh, wait a second, you know, like we can oversee billions of dollars across border payments and with relatively little oversight and without systems to do monitoring. Including with countries that are considered to be higher risk jurisdictions like Lebanon, Cyprus, et cetera.

Yeah. What could possibly be going wrong there with a small bank in Kansas facilitating billions of dollars of transactions? But I think what this highlights is not just index, right? Because look at TD as well. Sure.

BSA AML is a hot mess. Yeah. And we’re not if we really want to fix it, no one will touch the Patriot Act because we’re afraid of hitting the golden gooses at work.

But it needs to be fixed. Like we have not. It is ineffective.

And it is both a KYC slash KYB issue and an AML issue. And that should know no political party. But here we are where, you know, this is what the banks are getting hit with.

And I hate the we didn’t know or we were small or we didn’t have the oversight. Well, then you shouldn’t be doing it. It’s hard to argue with that.

Yeah, I would agree. All right. Let’s quickly jump to two more stories I want to hit real fast.

The first one is RAMP, which just launched a new product, RAMP Treasury. You see this one? I saw that one. So this is basically a combined operating account, which is FDIC insured.

It pays 2.5% interest. It’s with First Internet Bank out of Indiana, which I believe is actually integrated with RAMP through INCREASE, which is a banking as a service hardware platform. So there you go.

And it’s that product combined together with an investment account that’s sort of paired with. And that’s a money market fund. The rates are currently around 4.3%. So the idea is by sort of tying an investment account to a high yield business checking account, RAMP is giving its customers the ability to sort of shuttle money back and forth between the two to obviously have some yield being generated at all times.

And 2.5% is certainly higher than probably a lot of business bank checking accounts are right now. Especially for RAMP’s target customers, small business. Exactly right.

So they’re probably not keeping it in some very sophisticated high yield business bank account. And then on top of that, the ability to move it in when you’re not using those funds for funding your operations into an investment account where you can generate even more yield. There are no fees, there are no minimum deposits, no transfer limits in between the operating account and the investment account.

Although interestingly, and this was something that our friends at Brex pointed out in a somewhat competitive and combative tweet, there are some limitations on the ability to deposit checks, to receive external payments or receive transfers from bank accounts that already weren’t linked to RAMP, or to make payments outside of the RAMP platform, which I think is actually pretty consistent with RAMP’s sort of closed ecosystem ethos for building products. They’re kind of like the Apple of B2B fintech in some ways. Like they like to build one closed ecosystem that creates a great experience.

The other thing real quickly on this that I thought was interesting was it did seem to have some integrated like rules and automations, as is very common with RAMP’s products. They’re specifically designed so that you’re keeping just the amount of money you need in there to pay your bills. And they have accounts payable functionality built into RAMP.

And at every extra dollar, they want to try to move into that investment account and make sure that you’re maximizing that yield. And if you think about on a personal level or if you run a business, that’s always the challenge, right, is I need enough money to make to pay my bills, to make payroll if I’m a company, but I don’t want a single extra dollar not earning the most yield. And so that nailing that optimization is tricky.

But if anyone can do it, it’s RAMP. Hendrix, maybe I’ll go to you first. What was your reaction to this? Well, first, I’m surprised you didn’t bring up because you like to go against the self-driving money.

And I looked at it and I’m like, aha, Alex Johnson could say self-driving money. I thought we had sunset that term already, though. I never cared for it.

But it’s actually a good step in that direction, right? It’s a step in the direction, right, and has real utility. Here’s the part that I found really interesting is we always talk about that the incumbents should be learning from the fintechs. But you know what? Joe does this really well.

Chase Chase does this. Yeah. And so Brexit can complain all they want.

I think Brexit is doing it well. I think Rams is doing well, but they are now copying the incumbents that do a really good job on the Treasury. And I do think, though, that this is the tip of the iceberg that I think one of the next battlegrounds really is going to be around small business, Treasury and payments.

Like it’s that intersection is actually very much a blue ocean opportunity within banking and fintech. I mean, I think that I’m going to use a phrase I make fun of people for using all the time, but like democratizing these sort of sophisticated Treasury management tools that, you know, a significantly larger corporate customer of Chase may have and like bringing that down market to like an SMB customer, I think is a good thing. Yeah.

Yeah. And I agree. I mean, I think the interesting thing with this space and you highlighted it right, like Brexit does this well, Ramp does this, Mercury does this, ARK does this.

There’s a bunch of folks who do variations of spend management, business banking, Treasury management, sort of lumping them all together. The interesting thing to me is they all focus on serving high growth startups and like VC backed companies. And Brexit had a bit of a period of its history where it tried to go into the SMB space more broadly.

It decided it didn’t like that and it kind of backed out of it. And so, you know, Mikula, to your point, the thing I wonder about a lot with this kind of stuff is how far down market can you go? You know, and I think small businesses could use a Treasury management function that sort of replaces a Treasury management officer or employee. They don’t have a TMO, right? Right.

They don’t have that and they’re never going to. But it doesn’t mean that they shouldn’t be earning yield on their excess deposits that aren’t going towards operating expenses. And so I’ll be curious to see if this does penetrate down further.

Mikula, maybe one more quick story. Since you’ve been doing, what is it, sort of hostage video watching, but you’ve been making sure that like the CFPB is continuing to run smoothly. So we’re here recording this on the 23rd of January.

As I recall, President Trump said day one choppers out at CFPB, but he’s he’s made it used to have three days already. Seventy two hours in and has really been churning out, you know, both before the change of administration and continuing through, at least based on his Twitter through to today, a rapid fire set of press releases, rules, enforcement actions, removing medical bills from credit reports, suing Experian, finalizing the Financial Data Exchange as the standard sitting organization for open banking. Big one.

Actually, very interesting research report on BNPL, which I would recommend people read because it really counters some of the myths and narratives that I think that industry sometimes leans into. Yeah, that it’s better than payday loans, better than credit cards. Yeah.

Or that is for people who don’t use credit cards. But in reality, it’s for people who use both. And yeah, anyway, finding cash up for its quote unquote failures to fix fraud on this platform, you know, Honda auto financing.

So been a very, very busy guy. How much time do you think he has left on the clock? Yeah. Checking the time.

I mean, by the time this comes out, it’s super likely that he will be out. I would feel like that’s most likely the case. I’ve been not hiding this under a bush very well for a long time, like I had my struggles with the CFPB from the outset.

I feel like it was weaponized as a bureau under Warren, and I think it went too far. I think the troopers gone too far in some cases in terms of what they can do. But I do think it serves a very good purpose.

I am hopeful that we can find a normalcy as opposed to swing back. And most of his final actions, like I applaud his audacity in either staying on and some of the things he’s doing. But I do hope that we can find some middle ground between Mulvaney versus a Chopra of like, can we find someone who takes the job as a steward of consumer best interest in what they go pursue? I mean, particularly when it comes to the rulemaking formulations.

Right. I mean, I’m unfortunately been around long enough that I remember when the payday rule or the small dollar rule was first introduced. And, you know, here we are, whatever, probably about a decade later.

And I actually can’t even tell you if it ever went into effect and if it did in what format. So that pendulum back and forth. I don’t think, you know, doesn’t serve consumers well.

It also doesn’t serve industry. Well, yeah. Well, I mean, let’s hit the penultimate.

Pick your battles really going after Google pay for a product that doesn’t exist anymore. But let’s go hit fraud. You know, Ron Chevlin hit a big piece of this is like, if you’re going to do anything, you hit the cash app sells.

Don’t discriminate between the big banks and small banks. Go attack fraud. Right.

And who owns authorized push payment? I don’t think it actually is necessarily the sending bank. I think we need greater accountability to the receiving bank. Right.

Like somebody failed at KYC, KYB. If that’s where the fraud payment is going. Right.

That’s where the payment is going. And you’re not doing a good job of shutting that down. That’s where the pressure needs to go.

And so these more frivolous pieces, that’s what frustrates me, where it was a little more grandstanding. Yeah, it’s been interesting. I mean, to use a sports analogy that Bikula loves, like this kind of reminds me of when, like in basketball, there’s a player who does something and they do they do something wrong on the court and the coach gets mad and the coach has like the person come off the bench to go in, but they can’t get in the game right away.

But the player on the floor knows they’re about to get yanked out of the game. And so in the last like 30 seconds, they’re getting up like 14 shots and playing like the max way that they want to play before they get pulled out of the game. Like that’s very much the energy right now, I think, with with Chopra.

And it’s funny because some of the things are putting a bow on long term projects that he and the bureau have been working on, like open banking. Right. You mentioned FDX and designated them as the standard setting organization.

I’ve described that as like a game of chicken between FDX and the CFPB. And like he swerved at the last minute and he admitted that they were going to be the standard setting organization. In other cases, it’s like, let me play the hits one more time.

And that I think is like going after Equifax, going after Experian. And like those are targets that he likes to hit and he’s going to do it one more time. And then there are other ones where it’s like even now at the very end, he’s like, yeah, we’re going to open a process to solicit feedback from consumers on this thing that’s going to begin a five year journey of making a new rule.

So the CFPB, I was like to remind people, like it’s a young agency, right? Like the OCC was created during the Civil War. The CFPB was created 12 years ago. Right.

And so it’s like it’s very different that way. And it just hasn’t had time to like establish like what is its culture? What are the norms that you’re supposed to uphold if you work in the senior position at the CFPB? And we’ve had so much whips on so much. I was going to say from the outset, though, it was always inherently politicized.

It really was. Yeah. Because it’s where it came from.

Well, and if you can tell its youngness by anything, it has the best office furniture, right? This is a real thing. I was in the FDIC office in November and I did feel like I went through a time machine to the 80s. OCC is kind of similar, actually.

I know that’s a really good point. I mean, like they’re just newer in a lot of ways. And that’s I echo your point.

Like it’s not bad. I think some version of the CFPB needs to exist. But yeah, I almost want to like travel forward in the future a hundred years and find out like what does the CFPB look like then and what are the what’s the culture? Because it eventually will happen, but it doesn’t exist in that way yet.

All right. So to wrap up, Henrik, you might know this, but before we let people get off the show, we have them rant about something just in the news or something that’s been bothering them. I have one I can go first on, but I can’t let you guys think about it.

So my thing that I can’t let go right now is on the plane down to Salt Lake City, actually, I discovered that there is a ability on Polly Market, the predictions market, to be able to bet on whether Mark Zuckerberg is going to get divorced in 2025 based on the inauguration. Yeah, based on the inauguration. And I was thinking like the loop that we’ve been sort of slowly building between news, meme and gambling, like that loop is now complete and it moves really, really fast.

And I just want to quit society and go live in the woods. So that’s probably what I’m going to do. I don’t know if I’m more disturbed about the fact that that exists on Polly Market or the fact that Alex Johnson knows that they were advertising it.

They were advertising it on Twitter. They came into my feed to like to tell you to go gamble on. Yeah, and actually what they I’ll tell one more small story about this.

The context of their tweet was Mark Zuckerberg’s wife, like liked an Instagram comment for something relating to like Jeff Bezos or so. So like there was some new piece of news that moved the prediction market on this really stupid and kind of gross bet that exists out there. And I was like, oh, my God.

So I spent the whole plane hyperventilating about this. That was what I was doing. Not the rant I was going to do, but I can’t let that one go.

For me, it’s meme coins. And I think specifically when we get into this, what we’re calling investing, that is really gambling. Yeah.

And the gamification should really do worry is a huge fan of Robin gambling with none of the regulations that none of the regulations related to it. And we really do worry about I think it was either a wire or a Vanity Fair article talking about the impact on specifically young males. Yeah.

And Robin the Robin Hood effect. Like there are some things that are not meant to be gamified. Yeah.

And that do need the regulation. I’m not a fan of regulation for regulation’s sake, but we are like giving people like access to things that they should not have access to. It’s like when I hear people and this is particularly rampant in Chicago.

It’s like everyone should be an options trader. It’s like, no, not everybody should be your options trader. Most people shouldn’t actually.

No, you shouldn’t. Just because you took a course for five hours does not. And you follow some people talking heads on CNBC does not mean you are.

Now it’s like you’re on discord and it’s like I’ve learned everything I need to know. I should know. Well, there was a recent study.

It was about sports betting, not meme coins, but about incidents of domestic violence in like hometown teams who lost that game. Right. Yeah.

And and the relationship between markets where people are allowed to bet in markets where they aren’t. And I mean, I’ll let you guess which one had a higher incidence of domestic violence calls after the hometown team loses. Yeah.

No, it’s horrible. It has real world impacts, right? I know we’re probably over time, so I’ll keep mine short, which is I can’t believe that Chopra might be going out of office without taking an action against Tomocraft. Ha ha ha ha.

So we just throw in solo funds to he filed a suit. They filed suit against a lot of funds. So we have a couple of last like, please.

If for some Christmas, there’s a way that like Chopra hangs on by a miracle. By the time you all hear this, we’ll hope that that happens. Jason and Jason, thank you so much.

This was really fun. Till next time. All right.

That’s it for another week of the world’s number one fintech podcast and radio show Breaking Banks. This episode was produced by a U.S. based production team, including producer Elizabeth Severance, audio engineer Kevin Hirsham with social media support from Sylvie Johnson. If you like this episode, don’t forget to tweet it out or post it on your favorite social media or leave us a five star review on iTunes, Google Podcasts, Facebook or wherever it is that you listen to our show.

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