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'For July 2024, job growth slowed to 114,000 jobs. The unemployment rate increased to 4.3% for July 2024 compared to 3.5% in July 2023'. Here are some stats from Lumos about the effect of the unemployment rate on small business loan performance.

Attorney General Michelle Henry announced the sentencing of Tyreese Lewis, the head of an organized conspiracy to defraud central Pennsylvania residents and financial institutions of approximately $2 million. Lewis, 23, pleaded guilty to multiple charges including corrupt organizations, theft by unlawful taking, and access device fraud. Lewis was sentenced to two and a half to five years in state prison and ordered to pay $800,000 in restitution for his part of this scheme. “This sentence serves as a reminder of the gravity of financial crime; this is not a crime from which victims can easily be made whole,” said Attorney General Henry. “Lewis’s fraudulent activities not only targeted individuals and institutions, but also undermined the trust that is fundamental to our financial system. My office is committed to investigating and holding accountable those who exploit others.” From January 2022 through August 2023, Lewis and several co-conspirators used victims’ stolen banking information to access accounts and withdraw cash, or use stolen debit cards to buy a large number of gift cards in an effort to conceal the thefts. Additionally, Lewis would impersonate financial institution customer service representatives in order to trick customers into disclosing their private banking information. Full story below: https://tristatealert.com/23-year-old-sentenced-for-defrauding-central-pa-banks-of-about-2-million/

Key Points • Caroline Ellison, the star witness in the prosecution of FTX founder Sam Bankman-Fried, was sentenced in New York federal court in Manhattan to two years in prison and ordered to forfeit $11 billion. • Ellison, who ran the Alameda Research hedge fund affiliated with FTX, agreed to a plea deal in December 2022, a month after the cryptocurrency exchange spiraled into bankruptcy. • Judge Lewis Kaplan said a “literal get-out-of-jail-free card I can’t agree to” as he sentenced Ellison while praising her extensive cooperation. https://www.cnbc.com/2024/09/24/sam-bankman-fried-caroline-ellison-sentenced-ftx-.html

The beneficial ownership information reporting saga continues. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said on Thursday afternoon that the March 21, 2025, BOI reporting deadline set last week is no longer in effect, and a new interim final rule to extend BOI reporting deadlines will be issued by FinCEN sometime in the coming weeks. In addition, no fines, penalties, or enforcement action will be taken by FinCEN until the interim final rule becomes effective with the new filing due date. Here’s the latest update from FinCEN dated Feb. 27: WASHINGTON––Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks. No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported. FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered. FULL ARTICLE: https://www.cpapracticeadvisor.com/2025/02/28/fincen-extends-boi-reporting-deadline-again-pauses-enforcement/156733/

In what is expected to be its largest attendance yet, The Funders Forum + Brokers Expo is kicking off next week on the 4th with an evening reception then the 5th is the full day. If you haven't purchased your tickets yet there is still availability but don't risk waiting any longer. GET TICKETS

Story today from CNBC: Key Points • For years, American financial companies have fought the Consumer Financial Protection Bureau in the courts and the media. • Now, with the CFPB on life support after the Trump administration issued a stop-work order and shuttered its headquarters, the agency finds itself with an unlikely ally: the same banks that reliably complained about its rules and enforcement actions. • If the Trump administration succeeds in reducing the CFPB to a shell of its former self, banks would suddenly find themselves competing with nonbank financial players, including big tech and fintech firms with far less federal scrutiny than FDIC-backed institutions. • “Payment apps like PayPal, Stripe, Cash App, those sorts of things, they would get close to a free ride at the federal level,” said David Silberman, a veteran banking attorney. For years, American financial companies have fought the Consumer Financial Protection Bureau — the chief U.S. consumer finance watchdog — in the courts and media, portraying the agency as illegitimate and as unfairly targeting industry players. Now, with the CFPB on life support after the Trump administration issued a stop-work order and shuttered its headquarters, the agency finds itself with an unlikely ally: the same banks that reliably complained about its rules and enforcement actions under former Director Rohit Chopra. That’s because if the Trump administration succeeds in reducing the CFPB to a shell of its former self, banks would find themselves competing directly with nonbank financial players, from big tech and fintech firms to mortgage, auto and payday lenders, that enjoy far less federal scrutiny than Federal Deposit Insurance Corp.-backed institutions. “The CFPB is the only federal agency that supervises non-depository institutions, so that would go away,” said David Silberman, a veteran banking attorney who lectures at Yale Law School. “Payment apps like PayPal , Stripe, Cash App , those sorts of things, they would get close to a free ride at the federal level.” The shift could wind the clock back to a pre-2008 environment, where it was largely left to state officials to prevent consumers from being ripped off by nonbank providers. The CFPB was created in the aftermath of the 2008 financial crisis that was caused by irresponsible lending. But since then, digital players have made significant inroads by offering banking services via mobile phone apps. Fintechs led by PayPal and Chime had roughly as many new accounts last year as all large and regional banks combined, according to data from Cornerstone Advisors. https://www.cnbc.com/2025/03/10/why-banks-dont-want-the-cfpb-to-disappear.html

KEY POINTS At Money 20/20 in Amsterdam this week, business-facing fintechs like Airwallex, Payoneer, and ClearBank were all the rage, while consumer apps such as Revolut were nowhere to be found. The area that drew the most hype from Money 20/20 attendees was artificial intelligence, with fintech and banking leaders looking to harness the technology’s potential while assessing the risks. Several fintech executives CNBC interviewed spoke of how they’re not interested in launching products tailored to crypto as the demand from their customers isn’t there. At last year’s Money 20/20 — Europe’s marquee event for the financial technology industry — investors and industry insiders were abuzz with talk about embedded finance, open banking, and banking-as-a-service. As nebulous as these terms may be, they reflected a very real push from tech startups, including the biggest names in the business such as Stripe and Starling Bank, to allow businesses of all stripes to develop their own financial services, or integrate other firms’ products into their platforms. This year, with fintechs and their mainly venture capital and private-equity backers reeling from a dire slump in technology valuations and softer consumer spending, the narrative around what’s “hot” in fintech hasn’t changed an awful lot. Investors still love companies offering services to enterprises rather than consumers. In some cases, they’ve been willing to write checks for firms at valuations unchanged from their last funding round. But there are a few key differences — not least the thing of curiosity that is generative artificial intelligence. So what’s hot in fintech right now? And what’s not? CNBC spoke to some of the top industry insiders at Money 20/20 in Amsterdam. Here’s what they had to say. What’s hot? Looking around Money 20/20 this week, it was easy to see a clear trend going on. Business-facing or business-to-business companies like Airwallex, Payoneer, and ClearBank, dominated the show floor, while consumer apps such as Revolut, Starling, and N26 were nowhere to be found. “I think many fintechs have pivoted to enterprise sales having found consumer hard to make sufficient unit economics — plus it’s pretty expensive to get a stand and attend M2020 so you need to be selling to other attendees to justify the outlay,” Richard Davies, CEO of U.K. startup lender Allica Bank, told CNBC. “B2B is definitely in good shape — both SME and enterprise SaaS [software-as-a-service] — providing you can demonstrate your products and services, have proven customer demand, and good unit economics. Embedded finance certainly is part of this and has a long way to run as it is in its infancy in most cases,” Davies said. B2B fintechs are startups that develop digital financial products tailored to businesses. SaaS is software that tech firms sell to their customers as a subscription. Embedded finance refers to the idea of third-party financial services like bank accounts, brokerage accounts and insurance policies being integrated into other businesses’ platforms. Niklas Guske, who runs operations at Taktile — a fintech start-up focused on streamlining underwriting decisions for enterprise clients — describes the sector as being in the middle of a renaissance for B2B payments and financing. “There is a huge opportunity to take lessons from B2C fintechs to uplevel the B2B user experience and deliver far better solutions for customers,” said Guske. “This is particularly true in SME finance, which is traditionally underserved because it has historically been difficult to accurately assess the performance of younger or smaller companies.” One area fintech companies are getting excited by is an improvement to online checkout tools. Payments technology company Stripe, for instance, says a newer version of its checkout surfaces has helped customers increase revenue by 10.5%. “That is kind of incredible,” David Singleton, chief technology officer of Stripe, told CNBC. “There are not a lot of things you can do in a business that increase your revenue by 10%.” CONTINUE READING ⬇️

As the pace of money movement accelerates, we expect to see more payment-first business models, a new wave of fraud, and infrastructure to facilitate the patchwork of faster payments in the U.S. The year is 2023, and we are living in a world where AI can automatically file your taxes, a few lines of code can get you up and running with a full-stack payment processor, and an application can pay your bills with a snap of a picture. Yet most B2B payments take two to five business days to settle, are only available during banking hours, and move across rails built in the 1970s. We are on the precipice of a major advancement in real-time money movement in the United States: FedNow, the Federal Reserve’s new real-time payment scheme, is officially launching next month after years of buildup. Instant money movement is finally within reach and presents an opportunity for a new paradigm for payments in the U.S. But FedNow will emerge within a disjointed U.S. payment landscape, populated with institutions that manage conflicting interests. This is why we think there will be an opportunity for new, agnostic payment infrastructure to help orchestrate and support the flow of money and the associated fraud that comes with this new surface area. Further, we think the democratization of faster money will enable a new crop of vertically-focused application layer payments companies. Because of the complexities surrounding new and existing payment rails in the U.S., we expect payment infrastructure innovation to look different in the U.S. than in other countries with more advanced instant payment infrastructure. However, we expect the same surge in fraud that has accompanied faster payments in other countries to plague the U.S. too. Continue reading 👇 https://www.bvp.com/atlas/how-fednow-and-faster-payments-will-impact-u-s-fintech

From NPR: "Of the $1.2 trillion in federal aid disbursed on an emergency basis to small businesses during the pandemic, at least $200 billion — or 17% — may have gone to scammers. That's the latest, most complete assessment of potential fraud by the Office of Inspector General of the Small Business Administration, which oversaw the disbursement of the aid. The report, called "COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape," details how the rush to make the money available made it easier for fraudsters to apply for loans to keep non-existent businesses afloat, and then have those loans forgiven and covered by tax dollars. "The agency weakened or removed the controls necessary to prevent fraudsters from easily gaining access to these programs and provide assurance that only eligible entities received funds," the report says. "However, the allure of 'easy money' in this pay and chase environment attracted an overwhelming number of fraudsters to the programs." The OIG says the $200 billion estimate is the result, in part, of "advanced data analytics" of SBA data on the pandemic cash disbursements. At the time, government officials said the potential economic emergency posed by the pandemic shutdowns of 2020 necessitated a quick loans — despite the likelihood of fraud. "There is something to that argument, especially when it's applied to the very early weeks of the program," says Sam Kruger, an assistant professor of finance at the University of Texas who has studied pandemic fraud. But he says the data analysis behind this new report shows the government did have the ability to tighten up the system. "Some of the analysis that the SBA [OIG] has done on the back end here, you could conceive of this being done in real time," Kruger says. The current administration of the SBA estimates that almost 90% of the potential fraud happened during in 2020, during the first nine months of the pandemic, and that since then, the Biden Administration has implemented more real-time, anti-fraud checks. "SBA did in fact do that, when we put our anti-fraud control framework in place," says Katie Frost, Deputy Associate Administrator in the Office of Capital Access at SBA. As examples, Frost says, the SBA now checks the mismatches of names and employer identification numbers. They also say there's a large gap between the Inspector General's estimate of the size of potential fraud, versus the SBA's estimated amount of likely fraud, once cases have been looked at more closely. " Read the full article:

July 31 (Reuters) - A Texas judge on Monday ruled that many lenders need not comply with a Consumer Financial Protection Bureau (CFPB) mandate to gather demographic data on small business borrowers while the U.S. Supreme Court weighs the agency's funding. The Texas Bankers Association (TBA), American Bankers Association (ABA) and a small Texas bank sued in April, saying the CFPB had no authority to issue the rule because an appeals court found the regulator's funding structure unlawful. McAllen, Texas, granted a preliminary injunction blocking the CFPB from enforcing the rule against members of both groups and McAllen-based Rio Bank. The groups and the bank issued a joint statement saying they are pleased with the ruling, but "remain committed to our larger case" against the rule. A spokesperson for the CFPB declined to comment. The TBA includes 400 member banks, and while the ABA does not specify how many members it has, they collectively hold $19.2 trillion in deposits. Read More; https://www.reuters.com/legal/texas-judge-partially-blocks-small-business-loan-rule-2023-07-31/

July 13 (Reuters) - U.S. small businesses are paying the most for loans in 16 years as borrowing costs have skyrocketed under the Federal Reserve's aggressive interest rate hikes, but new data shows they have yet to face a widely predicted credit crunch. The average rate paid on short-term loans for small businesses shot up to 9.2% in June, up 1.4 percentage points from May's reading - marking the largest increase in short-term borrowing costs since December 2006, according to data this week from the National Federation of Independent Business (NFIB). The surging cost of borrowing is by design: In the ongoing effort to reduce demand and curb inflation, the U.S. central bank has tried to tighten credit conditions with 500 basis points worth of rate hikes since March 2022. But the recent improvement in the inflation outlook has meant that the highly anticipated clampdown on credit for the small business sector has yet to materialize in earnest. Twenty-eight percent of firms surveyed by the NFIB borrowed on a regular basis in June - down from a three-year high in April but broadly in the same range of borrowing activity that prevailed in the years leading up to the coronavirus pandemic. READ MORE 👇

"Here’s what to expect next year" KEY POINTS Top-tier startups that have three to four years of funding can ride out the storm, according to Point72 Ventures partner Pete Casella. The flood of venture money during the past few years led to copycat companies getting funded anytime a successful niche was identified. Many private companies created in recent years had one central assumption: low interest rates forever, according to TSVC partner Spencer Greene. Eventually, incumbents and well-financed startups will benefit, either by purchasing fintechs outright to accelerate their own development, or picking off their talent as startup workers return to banks and asset managers. Agree or disagree??