Community Banker sharing insights and dropping jokes. Surviving this Fintech universe.
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Good move. Once you have the distribution method, you go backwards to the real infrastructure and monetization.
On Friday, Ramp submitted an application to the Office of the Comptroller of the Currency (OCC) to establish Ramp National Trust Bank.
If approved, the charter would allow the trust bank to offer fiduciary investment management and custody of digital assets.
The proposed trust bank would bring these services under a consistent federal regulatory framework, helping us build great products alongside our banking partners to further our mission to save businesses time and money. It will not take deposits or make commercial loans.
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Again, banks need agents within their own platforms to help a customer open and manage accounts. Risk is too high to allow outside agents.
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Community Banker Guy retweeted
Guys, we're in the age of AI... you can literally go to Zillow data, download the sheets, throw in AI and see the real estate trends.
At the moment, inventory looks to get settling at pre-2020 territory.
Days on market is the next image on the thread...
Home values for the top 20 metros the last one.
From the mass data dump... here's the interesting tidbits:
Austin, TX (#29 largest metro), the biggest crash in any sizable market
- Typical home value is down about 27% from its June 2022 peak and it’s still falling
- There are about 15,200 homes for sale, 70% more than in 2019 and more than 3x its 2022 low.
- Homes take about 82 days to go under contract, nearly double the 2019 average of 44.
Southwest Florida, where prices and speed are both getting worse
- Cape Coral / Fort Myers: down 19% from peak and 119 days to sell.
- North Port / Sarasota: down 17% from peak.
- Naples: down 12% from its 2024 peak. At 130 days to sell, it’s one of the slowest markets in the country.
Other notable ones
- Kahului (Maui), HI: days to sell jumped from 98 to 134 in one year, the biggest one-year jump of any meaningful market. Prices are down about 10% from their 2024 peak.
- Florida Panhandle (Panama City, Crestview): over 100 days to sell, up about 35 days from 2019.
- Louisiana (New Orleans, Houma, Lake Charles): prices are 11–17% below peak, and Houma takes 126 days to sell.
- San Antonio and Killeen, TX: a smaller version of Austin. San Antonio is down 10% from peak, and Killeen takes almost twice as long to sell as in 2019.
- Colorado (Colorado Springs, Boulder, Pueblo): prices are down 7–10%, and Colorado Springs has 50% more homes for sale than in 2019.
I majored in Economics and STILL dont get this:
- Rates at 23 year highs (7.5%)
- 63% MORE sellers than buyers
- Home prices UP ~2% this year
Somebody educate me. Why aren't prices coming down?
And where is Michael Burry??!
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As with every year, enjoyed the FINTOP Summit. AI companies making a lot of progress on new tools for community banks to use. I didn’t feel that way last year but this is different. They are on the right path.
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Once banks have the ability to detect agents, they will be shut off from transactions until we have agents to verify the permissions. Companies are working on it but it doesn’t exist today.
Brainfood founder @sytaylor says 3 bank CEOs called him in a panic over Meta's Muse, asking whether they need to launch their own AI agents:
"I spoke to three bank CEOs a couple of weeks ago. They were all calling me in a panic saying, 'What do we do about Muse? Should we be launching our own agent? Do we have to move now?'"
"Maybe my agent could be my stock picker. Maybe it could be sweeping cash into an overnight fund. Imagine if you had this private banker in your pocket just doing stuff for you."
"How, as a financial institution, do I sell to an agent versus selling to a human? Maybe I'm not sponsoring stadiums anymore. I've gotta up my AEO game quite dramatically."
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Insane and really cool to watch what happens here.
🚨 BREAKING: Palmer Luckey's Erebor Bank has passed $7bn in deposits.
Erebor is the national bank Luckey and Joe Lonsdale built to fill the hole SVB left.
The FT reports it added more than $3bn and 500+ new customers in the past quarter, on top of the $4.06bn in its June call report.
That's
- $1.1bn in March,
- $4bn in June,
- $7bn now,
and a $6m average new account.
It's raising $1.5bn at an $8bn pre-money valuation.
It also just ended free stablecoin redemption at par for everyone but big depositors.
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The deposit growth is forcing the raise.
Erebor has to hold a 12% leverage ratio (per its granted charter), so a balance sheet this size needs roughly $900m of capital. It had $597m at the end of June.
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As is the "at par redemption of stablecoins"
Stablecoin redemption at par costs money to provide. Tether charges 0.1% for it. Erebor charged zero. The fix tells you what the product is.
Wintermute and Galaxy Digital taught Erebor a stablecoin lesson in arbitrage.
At launch, Erebor let customers turn USDC and USDT into dollars at $1 per token, free. Tether charges the greater of $1,000 or 0.1% for direct redemptions. Erebor charged nothing.
So Wintermute bought USDT a fraction below $1, sent it to Erebor and collected the full dollar. Rinse and repeat.
Galaxy Digital ran the same trade (per The Information).
Erebor told them to stop, but then kept free conversion for customers with sizable deposits, and put volume fees and limits on everyone else.
Traders gonna trade 🤷♂️
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This bank still isn't lending. At all.
The Q3 call report lands by the end of October, and that's where we'll see how much of the $7bn is cash at the Fed and how much is lent out, if any.
I can't think of another de novo that has grown like this.
It's a huge success story. And it absolutely can raise, and solve problems for clients along the way.
What I'm *fascinated* by, is if they can become sustainable along the way.
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For my bankers, we are looking to reevaluate our wire process. Too manual and wire volume is growing 2x. Any good solutions that are plug and play software ?
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Beating budget is great but getting your new grass seed germinating is just an epic feeling.
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FWIW, we have reached our net loan growth goal for the year (10%) with a quarter to spare. Pipeline remains robust and looking like 15% net growth for the year.
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One of the senior legal minds at ICBA explained this to a group of us a few weeks ago. Very interesting. 🤔
First in AB: ICBA goes on the offensive on trust charters with a new lawsuit americanbanker.com/news/excl…
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I don’t see banks allowing agents to conduct transactions to conduct transactions or limiting the amounts they could move as a security tool. I think agents will be within each bank platform that will talk to yours.
Fascinating.
Chief Economist at Apollo: agents could cause a bank run by sweeping household cash into accounts paying 3-5% instead of the 0.1% national average, causing banks to lose a large share of their cheap deposits.
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Genius move by Valley.
U.S. bank Valley National buys Israeli fintech Bluevine for $340 million.
The acquisition will give the bank a digital small business platform while accelerating its technology and AI strategy.
calcalistech.com/ctechnews/a…
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The SF Fed didn’t know what interest rate risk was. Do your job as a regulator to identify risk and they simply didn’t see it. Long duration assets with concentrated funding are an easy red flag to spot.
Some asking why this matters, even now. Well, because is this a new type of failure, which requires a new policy response? Or is a bank that was high-flying and regulators that could have taken action but instead dithered? If that's the case, the fixes are different.
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Friendships come from so many places and life sucks. The old guard that used to the run the bank had this hilarious older bankruptcy attorney that was ruthless. As I took over the bank lending and credit areas, we became close friends over the last five years. Celebrating victories over lunch, talking about our yards, sharing vacation spots.
He always stated he wanted to be a “profit center for the bank” even though there was no way given his rate. lol.
He called me Friday night to talk about a file on his vacation in NYC. He passed away last night. Life is short and make friends with people you wouldn’t imagine knowing.
RIP TL
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Dude is on another level.
We started @column with the insane idea to rebuild every component of the financial system from scratch. Today, I think we've finally completed that build.
We're releasing four new products, so any technology company can build at the frontier of financial services.
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Community Banker Guy retweeted
I’ve said many times that the CLARITY Act is essential to ensuring America wins the global race for new technology. That’s the reason Congress passed the GENIUS Act: to ensure that stablecoin infrastructure, a revolutionary financial technology, will be built in America.
Ensuring that America’s community bank sector continues to thrive has been a constant focus of mine since day one. And the administration’s dual focus on enabling new digital technology to flourish and appropriately tailoring community bank regulation is key to both sectors driving U.S. economic growth together over the next several decades.
The final draft of the CLARITY Act furthers this mission. It gives the Secretary of the Treasury additional authority to act if the facts around deposit flight change to the detriment of community banks. If stablecoins cause harm to community banks, I will not hesitate to use these tools to ensure they remain fully protected. Community banks are essential to U.S. economic performance and Main Street growth. Economic security is national security, and community banks play a major role in this principle.
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#neverforget
It was such a sad time and out of it came unbelievable unity. We all miss those days of unity where it felt we were all on the same team no matter who you voted for bc there was a common goal. Protect each other, support each other, encourage each other.
I hope that feeling of unity comes again.
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Update: they have a second “lien” behind us that are private investors. 💀
I like to be as transparent as I can be. We had our first builder call us today and say “I’m out of money and can’t pay you”. Loan matures Friday. 😬 We got $2M on 5 new units sitting at 67% LTV.
He asked me: “what are the options?”
My response: “liquidation. Friendly or non friendly. ”
We’ve had a lot of private capital come in last few months but this should be an interesting one.
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