THURSDAY JUNE 10, 2021 VOL. 186 No. 110 AMERICANBANKER.COM Follow us on Twitter @AmerBanker LendingClub builds on 5 Radius Bank acquisition with exec moves The biggest concerns The San Francisco company has promoted or hired several bankers to steer growth in for lenders retail and commercial banking operations just months after completing its purchase of See story on page 4 Radius. Page 4

Very important Criǎcally important Mark Cuban-backed bank 6 startup valued at $4 billion in SPAC deal 100% Dave, a banking startup that’s been backed by investors including Mark Cuban and 80% Capital One Financial, agreed to go public in a deal with a blank-check firm that values 60% the company at $4 billion. Page 5

40% Goldman Sachs invests in blockchain backbone firm 20% 7 Blockdaemon Blockdaemon has seen rapid growth in the 0% Retenǎon of Enhancing UX at Beer insulaǎng Measuring ops Implemenǎng past year, and has won customers including staff point of sale against volume employee new tech JPMorgan Chase and Citigroup. Page 5 fluctuaǎon producǎvity

Source: The Mortgage Collaborative Mastercard Foundation gives 8 $1.3 billion for Africa vaccines The Mastercard Foundation will provide $1.3 billion to support the coronavirus dailybriefing Wells Fargo’s 2% cash-back vaccination program in Africa, the continent 3 card is a bid to bolster with the lowest inoculation rate. Page 6 lagging unit Have banks dodged corporate The product, which will compete against Mastercard white-labels True 1 tax bullet under Biden? Citi’s Double Cash card, is the first step 9 Name to reach more issuers The president had campaigned on a 28% in CEO Charlie Scharf’s revamp of a Global Payments’ TSYS subsidiary and corporate tax rate — threatening to undo business segment that has long trailed top BM Technologies will offer the program, much of the Trump-era cuts — and banks competitors. Page 3 which allows transgender and nonbinary were seen as more vulnerable than other consumers to use their preferred name on industries. But the administration appears Staff retention, payment cards. Page 6 open to a lower rate as part of broader 4 volume fluctuation among legislative talks. Page 2 top lender worries for 2021 Klobuchar takes a blunt In the aftermath of 2020’s historic year 10 approach to big business Regions buying industrial loan of mortgage originations, lenders are In “Antitrust,” Sen. Amy Klobuchar offers 2 company EnerBank USA concerned with keeping employees and little nuance in weighing the costs and The deal for the Salt Lake City-based home insulating themselves from the negative benefits of concentrated economic power, improvement lender, which Home Depot effects of the boom and bust cycle, according David J. Evans of Arizent writes. Page 7 tried to acquire more than a decade ago, is to a survey from The Mortgage Collaborative. part of a larger effort by Regions Financial to (See chart above.) Page 4 diversify its home lending business. Page 3 THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 2

Congress,” said Paul Merski, group executive tend to pay higher effective tax rates than TAX REFORM vice president for congressional relations other industries. and strategy at the Independent Community “Banks end up being at the high end of Bankers of America. “I think there’s probably taxpayers as it compares to the statutory rate,” Have banks virtually no Republican support at all, for any he said. “There is little difference between the of these tax increases.” effective rate and the statutory rate when it dodged For weeks, Biden was negotiating with comes to banks.” Sen. Shelley Moore Capito, R-W.Va., over Biden’s comments suggesting he is open an infrastructure plan in the hopes of to lowering his initial proposed corporate tax corporate tax reaching a compromise with congressional rate come as Senate Minority Leader Mitch Republicans. But those talks reportedly broke McConnell, R-Ky., has said that changes to the bullet under down on Tuesday without a deal. A bipartisan 2017 tax cuts are a “red line” for Republicans group of centrist lawmakers, including negotiating the infrastructure plan. Senate Banking Committee member Kyrsten The CEOs of some of the largest U.S. Biden? Sinema, D-Ariz., is said to be working on an banks also warned lawmakers last week that alternative proposal. substantial tax increases would hurt their By Neil Haggerty Biden had initially proposed investing customers. June 08, 2021 more than $2 trillion in infrastructure “Our small and medium-size businesses, WASHINGTON — After bankers feared projects across the country. Biden’s initial of which we have many, are worried about tax how Democratic control of Congress and the American Jobs Plan proposal included the increases slowing down their ability to invest White House would affect their bottom lines, 28% corporate tax rate to help offset the new in employees, invest in new equipment, be the industry could escape a dramatic hike in spending. competitive,” Bank of America CEO Brian corporate taxes thanks to infrastructure talks. Biden has since scaled back his initial Moynihan told the House Financial Services President Joe Biden had campaigned on proposal but has stated that he wants to Committee on May 27. a proposal to raise the corporate tax rate to spend at least $1 trillion on an infrastructure Mills said Biden is likely trying to find a 28%, threatening to undo much of the tax package. As his proposed infrastructure middle road between those who championed reforms pushed by former President Donald investment has declined, so have his the Trump administration’s tax cuts and Trump. expectations for what corporations will pay progressives who don’t believe corporations But the Biden administration has in taxes to fund the new package. are paying enough in taxes. appeared to backtrack somewhat as a Biden said at an event in Louisiana on “There is not the political support for a 28% result of the intense negotiations over an Sunday that he thinks the corporate tax rate tax hike,” Mills said. “I do think that the focus infrastructure plan, suggesting he was open should be between “25% and 28%.” of Biden continues to be a desire to push a to a lower rate, 25%. That 3-percentage-point “I’m willing to hear ideas from both sides,” message that what he is trying to do is getting difference could cushion the blow of any tax Biden said. “I’m meeting with my Republican folks to pay their fair share.” plan for banks, which are more sensitive to friends up in the Congress. … I’m ready to Analysts are projecting that the corporate fluctuations in the corporate tax rate than compromise.” tax rate will likely increase to no more than other industries. Mills said that the developments are 25% if Biden is able to get an infrastructure “The issue here is that banks are most particularly positive for banks because they bill through Congress. exposed to changes in the rate, because as an industry, they generally pay very close to the statutory rate,” said Ed Mills, a policy analyst Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 for Raymond James. Phone 212-803-8200 AmericanBanker.com Banks were considered one of the biggest beneficiaries of the Trump tax cuts, seeing Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 record profits as a result of the corporate tax Managing Editor Dean Anason 770.621.9935 rate being slashed from 35% to 21%. Reporters/Producers The industry was widely expecting to Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 pay more in taxes with unified Democratic Washington Bureau Chief Joe Adler 571.403.3832 control. But with Democrats’ slim majorities Executive Editor, Technology Miriam Cross 571.403.3834 in the House and Senate and Republicans Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 unified in opposition to tax increases, signs BankThink Editor Rachel Witkowski 571.403.3857 are pointing to a smaller tax increase than John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 anticipated. Hannah Lang 571.403.3855 “I think the administration is already Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 backtracking on some of the more aggressive Digital Managing Editor tax increases, because they’re going to have Christopher Wood 212.803.8437 Kevin Wack 626.486.2341 a lot of trouble getting support through

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James Lucier, managing director at Capital Ascentium Capital, an equipment finance consumer franchise that lags behind those Alpha Partners, said even some Democrats firm based in Texas. And in 2019, it bought of the bank’s top competitors. are concerned that higher corporate income Highland Associates, a Birmingham-based The Active Cash Card will offer customers taxes will make the U.S. less competitive. asset management firm focused on the health 2% cash back on all purchases, a rewards “Despite their willingness to raise the care industry. proposition that better positions Wells Fargo corporate tax rate, there is still a limit to how That same year, Regions also exited its to compete with Citigroup’s Double Cash far congressional Democrats will go,” Lucier relationship with the point-of-sale home card. said. “A 28% rate would give the U.S. the improvement lender GreenSky, saying that it The card, which will launch in July and highest combined federal, state and local or wanted to pursue more direct relationships have no annual fees, will be followed by total national tax rate in” the Organisation for with consumers. The deal for EnerBank could other new credit cards later this year and Economic Co-operation and Development, allow it to do that. in 2022. The announcement Tuesday marks “and Democrats don’t want to go there. A 25% Home Depot had applied to buy EnerBank a “new day” for the $1.9 trillion-asset bank rate puts the U.S. in the upper end of the pack, in 2006, but dropped its application in 2008 as it looks to grow its credit card business, but not the very highest.” amid debate over whether retailers should be said Krista Phillips, a Wells Fargo marketing allowed to own ILCs such as EnerBank. executive. Currently owned by CMS Energy, a “There’s no doubt that we have been M&A Michigan energy company, EnerBank had … punching below our weight for some approximately $2.8 billion in loans as of time in the credit card space relative to our March 31. It lends in all 50 states and has debit card relationships or our mortgage Regions worked with over 1 million homeowners and relationships,” she said. “We know we have 10,000 contractors since it was founded 20 a huge opportunity.” buying years ago. President and CEO Charlie Knadler, Wells Fargo is touting the cash-back along with EnerBank’s approximately 450 card as a simpler option than plastic from employees, would join Regions. competitors that tie rewards to purchases industrial In an investor presentation, Regions also or feature rotating spending categories. noted that EnerBank’s portfolio is made up of Customer surveys indicated “loud and loan company primarily prime and super-prime consumers; clear” that borrowers find those programs borrowers have an average FICO score of 763. too complex, Phillips said. Stephens Inc. served as financial advisor to “People just want to declutter their lives. EnerBank USA Regions in connection with the transaction, They want simplicity,” Phillips said. “And not and Sullivan & Cromwell served as Regions’ surprisingly, they want a lot of value without By Laura Alix legal counsel. Goldman Sachs served any conditions.” June 08, 2021 as financial advisor to CMS Energy, and The card will offer a 0% annual percentage Regions Financial in Birmingham, Skadden, Arps, Slate, Meagher & Flom served rate on purchases and balance transfers for Alabama, has agreed to buy a Salt Lake as legal counsel to CMS Energy. 15 months, with a variable APR of 14.99% to City home improvement lender as part of a 24.99% after that. Borrowers can get a $200 broader effort to beef up its home lending cash bonus if they spend $1,000 in the first business. CREDIT CARDS three months. The $153 billion-asset Regions said The Active Cash card is similar to the Tuesday that it will pay $960 million for bank’s existing Cash Wise card, which EnerBank USA, an industrial loan company. Wells Fargo’s offers 1.5% cash back without category The deal is expected to close in the fourth limitations. Wells Fargo preferred launching quarter. 2% cash-back a new brand to “mark a new era in credit EnerBank offers digital and phone-based cards” that will include other Visa-branded point-of-sale lending capabilities, which products, Phillips said. Regions said would complement its own card is a bid The clutter-free face of the card ditches recent investments in mortgage and home the iconic stagecoach logo that has long equity lending. to bolster been part of the company’s branding. “We have thoughtfully evaluated the home Later this year, Wells plans to launch improvement point-of-sale lending space another new credit card called Reflect, for a number of years, and we believe this is lagging unit which the company is describing as a low- the right partner at the right time to deliver APR offering. Phillips declined to share on our vision,” Scott Peters, Regions’ head of By Polo Rocha its interest rate range, but she said that it consumer banking, said in a press release. June 08, 2021 will have a 0% introductory APR rate for 18 If approved by regulators, the deal would Wells Fargo has unveiled a new cash months for balance transfers and purchases. be the latest in a series of bolt-on acquisitions rewards credit card as an initial step in Customers will also be able to extend that for Regions. Early in 2020, it acquired CEO Charlie Scharf’s effort to revitalize a 0% rate for up to 21 months by making

For up to date and complete coverage go to AmericanBanker.com THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 4 minimum payments on time, she added. important or critically important for this year, Wells is also working on launching a new according to The Mortgage Collaborative’s GROWTH STRATEGIES rewards credit card line in 2022, but details inaugural Pulse of the Mortgage Industry are not yet available. report. Regarding their biggest concerns this Scharf, who joined Wells Fargo in 2019, year, about 86.2% said enhancing customer LendingClub said at an industry conference last week experience at the point of sale and 84.9% said that the bank was “under-penetrated” in modernizing loan originating processes to builds on the credit card business, given its customer insulate against volume fluctuations. footprint. He also said that Wells is looking These top three issues all align with the to start playing “offense” after years spent industry’s push for increased efficiencies Radius Bank recovering from past consumer-related while avoiding the typical ‘hire-and-fire’ scandals. The bank remains under several cycle after origination highs of the past. acquisition regulatory consent orders and an asset cap Companies are more concerned with the that the Federal Reserve Board put in place human impact of that strategy, as well as the in 2018. operational and financial effects, according with exec Scharf hired former JPMorgan Chase to TMC president and COO Rich Swerbinsky. executive Ray Fischer in 2019 to lead the “Back in February 2019, margin moves bank’s cards, retail and merchant services compression had lenders wishing they had team. tightened up their staffing numbers earlier,” By Jon Prior Wells Fargo reported $34.2 billion in Swerbinsky said in a statement to National June 08, 2021 credit card loans outstanding at the end Mortgage News. “Nearly 18 months later, LendingClub has made a series of of the first quarter, which was down about many of those same lenders could not hire executive moves to bolster consumer and 11% from the same period a year earlier, fast enough to manage the sheer volume of commercial banking operations just months and less than a third of the total reported by loans coming in their doors. For many, the after its acquisition of Radius Bank. JPMorgan Chase and Citigroup. more extreme peaks and valleys of late have The San Francisco company is promoting brought the need to modernize operations Ronnie Momen, previously its chief lending via technology into sharper relief.” officer, to chief consumer banking officer. EMPLOYMENT DATA Both the survey results and anecdotes Momen will steer the retail-banking business from the San Diego-based independent forged from LendingClub’s $185 million network of lenders show its members are purchase of Radius, a $2.4 billion-asset bank Staff more committed than ever to software in Boston, which was approved by regulators investments for improving operational early in the year. LendingClub is among the retention, efficiency. Especially as refinance activity first fintech companies to buy a bank. wanes in the industry’s latest “roller coaster,” Momen has held credit-related roles at mortgage companies want to minimize the Wells Fargo and HSBC along with other volume manual back office originating processes, the fintechs like GreenSky and Credit Karma. report said. David Bolocan has been hired as senior fluctuation Notably, as home prices and construction vice president of deposits and payments. costs keep surging, lenders expect that jumbo Bolocan was head of deposits for three years lending will grow, taking on a larger part of at BBVA USA, which was recently acquired by among top 2021’s overall mortgage volume. A 69.1% Pittsburgh’s PNC Financial Services Group. share said an increase in jumbo loans is a Amber Carroll has been brought on as lender worries top concern as more borrowers will have to senior vice president of membership and life- go above conforming loan limits. However, cycle marketing. Carroll had been senior vice the heft of these loans leaves end-buyer president of marketing at Freedom Mortgage, for 2021 availability and appetite in question. one of the largest home loan lenders in the “Demand usually exceeds supply in this U.S., and previously held marketing positions By Paul Centopani regard even in the best of times, and with the at TD Bank and HSBC. June 08, 2021 current interest rate environment, investors LendingClub has also hired Jamie With most expecting this year’s lending may be even more reluctant to add fixed- Armistead as vice president of product volume to come in lower than 2020’s record- rate jumbo loans to their balance sheets,” management. Armistead held a similar role breaking totals, lenders are recalibrating in Swerbinsky said. at Early Warning Services, which runs the a number of areas to get ready for whatever bank-owned person-to-person payments comes next, according to a survey from The This article originally appeared in National service Zelle. Before that he was head of Mortgage Collaborative. Mortgage News. digital channels at Bank of the West. An 88.2% share of 598 lending executives LendingClub, which was started in 2007, surveyed said retaining staff was either very long specialized in consumer products like

For up to date and complete coverage go to AmericanBanker.com THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 5 personal and auto loans. With the acquisition Chairwoman Maxine Waters chiding firms the space,” Richter said. He declined to give a of Radius, it has reentered commercial for raking in “billions” in overdraft fees last valuation for Blockdaemon. banking. LendingClub had shut down year during the pandemic. Investors have been pumping money its commercial lending business in 2019, The startup is one of the latest fintech into cryptocurrency projects such as Coin referring commercial business borrowers to firms to go public through a merger with a Metrics, Paxos Trust, Digital Asset Holdings partner companies. SPAC. Acorns Grow, an investing startup, and Chainalysis as Bitcoin and Ether have Consumer loans, specifically personal agreed in May to go public through that surged to records and then retreated. The loans, will “continue to accelerate” the route, while mortgage and real estate startup startups receiving investor attention tend company’s growth toward profitability, Better HoldCo announced an agreement for to be building infrastructure for the broad LendingClub CEO Scott Sanborn said in a merger with a SPAC earlier that month. blockchain industry like exchanges, analytics a press release announcing the changes Dave and VPC Impact Acquisition or nodes. Tuesday. Holdings’ transaction expands the Blockdaemon had net income of $18 “The opportunity in front of us is massive, relationship between the startup and Victory million in the first quarter with revenue at and we’re firing on all cylinders with a clearly Park Capital, which backs the blank-check about $24 million, Richter said. Companies differentiated approach as the leading digital company. Victory has previously invested including PayPal Holdings, Robinhood marketplace bank in the country,” Sanborn in Dave and provided a $100 million credit Markets and E-Trade have sought its said. facility to the banking firm in January. Dave services to expand their blockchain and also created a spending account and debit cryptocurrency offerings. card with no monthly fees, called Dave In May, Goldman Sachs led the $15 IPOs Banking, last year. million investment into Coin Metrics, a Dave was advised by Centerview Partners cryptocurrency and blockchain data provider and Orrick, Herrington & Sutcliffe. The blank- to institutional clients. The bank contributed Mark Cuban- check company sought advice from Citigroup, $5 million to the Blockdaemon round, Richter Jefferies Financial Group and White & Case. said. “It’s been a long dialogue with them,” he backed bank said. Also last month, Coinbase Global, the VENTURE FUNDING largest U.S. crypto exchange, became a public startup valued company through a direct listing on Nasdaq. Richter said he’s seen a progression among at $4 billion in Goldman large financial firms that starts with them allowing their customers to buy Bitcoin and Sachs invests Ether. Then they branch out to protocols that SPAC deal pay interest if you hold enough tokens to help secure the network. By Bloomberg News in blockchain “Large institutions are getting serious June 08, 2021 about paying yield on tokens out to their Dave, a banking startup that’s been backed backbone firm customers,” he said. “It shows that large by investors including Mark Cuban and financial institutions over time will want Capital One Financial, agreed to go public in to rival Coinbase” by copying its model of a deal with a blank-check firm that values the Blockdaemon making it easy to buy and earn interest on company at $4 billion. various digital coins. Dave also secured a private placement, By Bloomberg News Other investors in the Series A fundraising alongside the transaction with VPC Impact June 08, 2021 for Blockdaemon include BlockFi, Warburg Acquisition Holdings III, of $210 million Blockdaemon, a firm that creates and Serres, Uphold and Voyager Digital, according from investors including Tiger Global hosts the computer nodes that make up to a company statement. Management, Wellington Management and blockchain networks, raised $28 million from Corbin Capital Partners, the companies said lead investor Greenspring Associates as well Monday in a statement. The deal is expected as from Goldman Sachs Group Inc. to close late into the third, or in the fourth The firm plans to use the proceeds to quarter. double its headcount to 100 and to make Dave launched in 2017 with the goal of acquisitions, Chief Executive Officer helping consumers avoid overdraft fees, an Konstantin Richter said in an interview. effort it says has led customers to circumvent The company has seen rapid growth in the nearly $1 billion in those charges. Such fees past year, and has won customers including faced scrutiny from lawmakers last month JPMorgan Chase and Citigroup. during hearings with bank executives, “We’re selling 10 times what we did a year with House Financial Services Committee ago, mostly to new institutions coming into

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“Addressing this inequity is a moral its True Name program via a white-label CORONAVIRUS imperative,” Roy said in a briefing Tuesday. “It approach, as more issuers express interest demands a response from government, from in the service that allows transgender and the private sector, from international partners, nonbinary customers to use their preferred Mastercard from all of us.” name on payment cards. Vaccine shortages threaten to curb decades Global Payments will make True Name Foundation of economic progress in Africa — the pandemic available to issuers using its TSYS processing has plunged 30 million people on the continent platform, and BM Technologies will also into extreme poverty and 39 million more could roll out True Name to users of its white- gives $1.3 follow, according to the African Development label digital banking platform, Mastercard Bank. announced Wednesday. billion for Africa has received further commitments The moves come about 18 months after to support its vaccination program from the Mastercard introduced True Name. The European Union, Canada, the Palo Alto-based card network’s research found that about a Africa vaccines Skoll Foundation and George Soros’s Open third of the time when the legal name on a Society Foundations, according to Africa CDC person’s card doesn’t match the cardholder’s By Bloomberg News Director John Nkengasong. Meeting Africa’s appearance, they face negative experiences. June 08, 2021 target to vaccinate at least 60% of the population “People have been harassed, declined The Mastercard Foundation will provide $1.3 by the end of 2022 “requires investments in service and sometimes even attacked when billion to support the coronavirus vaccination scaling up the supply of vaccines and in the the card the merchant sees doesn’t match the program in Africa, the continent with the lowest logistics of vaccine distribution,” Nkengasong person’s presentation,” said Cheryl Guerin, inoculation rate. said in emailed responses to questions. Mastercard’s executive vice president of Funding under the so-called Saving Lives The Africa CDC plans to ensure that all marketing and communications for North and Livelihoods initiative will be deployed in countries in the region vaccinate their people, America. partnership with the Africa Centres for Disease and is currently focused on talks with Tanzania “Through these white-label partners we’re Control & Prevention to urgently procure to start a delayed inoculation program. getting a one-to-many approach that can enough shots for more than 50 million people. Tanzania’s government has also signaled its really create some scale,” Guerin said. The foundation will also support the African willingness to resume sharing data on Covid-19 Consumer awareness is driving more Union’s push to manufacture locally as much cases, a reversal of the policy under former issuers to inquire about True Name, as 40% of the vaccines needed on the continent. President John Magufuli, who died in March. according to Guerin. Mastercard Inc., the world’s second- “We are in talks with Tanzania and stand BMO Harris Bank in Chicago was the first largest payment network, created the ready to support their vaccine access,” to launch the service in 2019, followed by Mastercard Foundation in 2006 and it operates Nkengasong said. “As an AU member state, Citigroup last year. Kentucky’s Republic Bank independently under the governance of its own Tanzania is as entitled as all other member this month became the first community bank board. states to access provided through the African to roll out True Name. Last month Bunq , More than 80% of the Mastercard Vaccine Acquisition Task Force and through this based in the Netherlands, became the first Foundation funding will go toward purchasing new initiative with the Mastercard Foundation.” European True Name participant. vaccines from Johnson & Johnson, according to Since the card networks dropped the the organization’s president and chief executive signature requirement for card-present officer, Reeta Roy. “Vaccines under this DIVERSITY AND EQUALITY transaction in 2013 — and Mastercard in initiative will begin to be available in August,” 2018 led the way to eliminate the signature she said in an emailed response to questions. panel on the back of cards — there has been The Mastercard Foundation will acquire Mastercard no technical barrier for issuers to customize the J&J doses at a negotiated price after an users’ names on cards. agreement between the company and African white-labels Card networks also do not require authorities, Roy said. Under the arrangement, merchants to check card customers’ ID, Africa has been given discounted access to at but some do, and this practice has created least 220 million vaccines. True Name to tensions for transgender and nonbinary Only 2.4% of Africa’s population is people, Guerin said. inoculated, compared with a global average reach more In fact, the U.K. digital bank Monzo has of 13.8%, according to Africa CDC and enabled customers to use any name they Bloomberg Economics data. The program prefer on payment cards and within the app has slowed because of interruptions to supply issuers since 2016. But Monzo also is now formally from India, where most of the AstraZeneca Plc adopting True Name’s marketing program doses the region was scheduled to receive are By Kate Fitzgerald to reach transgender and nonbinary folks, manufactured, along with vaccine hesitancy June 09, 2021 Guerin said. and slow distribution of shots received. Mastercard is widening the reach of Mastercard created no new technology

For up to date and complete coverage go to AmericanBanker.com THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 7 for True Name, but instead established a minuses varies by everything from personal marketing program for issuers that would BANKTHINK preference to political persuasion — which is streamline the process for asking customers why reasonable people can disagree over the for their preferred name, with special line at which business or economic success attention paid to the needs of transgender Klobuchar tips over into excess and abuse. and nonbinary customers, Guerin said. Now and then, Sen. Klobuchar nods “We’ve worked with issuers to help them takes a blunt toward these complexities, tipped by phrases to update their systems so customers will like “to be sure” and “some would argue.” be greeted by their preferred name when But despite lengthy forays into the history interacting with customer service reps,” she approach to of monopolies, the antitrust movement said. in the United States, the Klobuchar clan’s Mastercard also supplies marketing big business own journey as immigrants from Slovenia, materials for issuers to use on their website to and more than 200 pages of endnotes and explain how True Name works. By David J. Evans acknowledgements (a rather self-conscious “Part of inclusivity is thinking about how June 08, 2021 preemptive strike against critics and cynics), you go to market, and making sure people are It says something about the times in which her book is less a thoughtful popular treated with dignity and given the assurance we live that a 684-page tome on antitrust exploration than a political position paper in of safety for transgender and nonbinary by Amy Klobuchar, the senior senator which everything is arranged (and nuances customers using their preferred name to pay,” from Minnesota and erstwhile Democratic sanded away) to point to pre-ordained Guerin said. presidential nominee, holds a prominent conclusions. Although Mastercard didn’t disclose place on our national best-seller lists this She shares today’s all too common which issuers on the TSYS platform plan to summer. tendency to recast historical detail in the light adopt True Name, interest is high, according It also says something that the senator’s of our contemporary political obsessions and to Guerin. book is published by Penguin Random House, rhetoric. She draws a straight line of historical “We are excited to partner with a company which the book itself identifies as villainy from the 17th century monopoly of Mastercard’s initiative of fostering a more one the megacorps driving the book industry the East India Co. through Standard Oil and inclusive and diverse community by toward unhealthy concentration. And, of the infamous “trusts” of the 19th century to providing our issuers and their cardholders course, her book is available on Amazon, the dominance of Google and Amazon in the opportunity to participate in the True where (as I write) it is No. 1 among new our own time. She downplays important Name program,” Gaylon Jowers, senior releases in the “government management” differences like the role and rationale of the executive vice president at Global Payments category. Throughout “Antitrust,” Amazon is governments that granted monopolies to and president of TSYS Issuer Solutions, said often Exhibit A when discussing the excessive the East India or Hudson Bay Cos. in the first in a press release. monopoly power held by Big Tech in the place, as well as the sheer rapaciousness such BM Technologies, which provides a white- digital era. licenses facilitated — behavior our digital label mobile money app to consumers No one should begrudge the senator’s merchant princes could not begin to dream through corporations like Verizon, also choice of publisher or retail platform. If of. (For the definitive account, see William expects strong interest in True Name from its she wants the widest reach for her ideas, a Dalrymple’s “The Anarchy.”) partners. publisher with market clout, a well-oiled She rather gives the game away when she “Diversity and inclusion are fundamental publicity machine, and the wherewithal to blithely refers to the current Supreme Court components of our company and we hope pay hefty advances is obviously preferable — as “pro-monopoly” — as if Justice Roberts our banking experience makes all of our as is a distribution platform with the ability and team sit around each day conspiring customers feel empowered both individually deliver a digital copy of her book in seconds to further enhance the scope and power and financially,” said Luvleen Sidhu, BM or a hard copy the next day, for free. of contemporary tycoons. And in the final Technologies’ founder and CEO, in the There lies the obvious dilemma. Like most chapters, she lays out the full panoply of release. things, the economic scale and concentration ills facing America today as part and parcel Guerin predicts True Name will become of monopolies can create both good and of the antitrust problem — among them, ubiquitous with the expansion through bad outcomes, and require hard choices — wage inequality and rising prices, racism, white-label providers. something familiar to any citizen of small- big-dollar politics, media consolidation and “Just about everyone has pride in getting town America who watched their local Main the “increasing international character of their first credit card, and if you have the Street close up in the wake of Walmart’s commerce.” (Who took Amy Klobuchar for right name on it, that doesn’t cause fear and arrival, but also saw lower prices and greater an America-firster?) anxiety, you’re going to be that much happier selection than ever before. Or those of us As the saying goes, when you have a good with it,” Guerin said. who make choices every day as to whether hammer, everything looks like a nail. The to share our personal information with the only thing obviously missing from her list likes of Google in return for instant access is climate change, which was surely just an to customized information and advice. The oversight. scorecard one uses to record these pluses and All of which is to say that “Antitrust”

For up to date and complete coverage go to AmericanBanker.com THURSDAY JUNE 10, 2021 AMERICANBANKER.COM PAGE 8 is deeply disappointing — particularly, one has to assume, for those in 2020 who M&A RETAILERS believed that Sen. Klobuchar’s candidacy represented a thoughtful, moderate option in an underwhelming field of Democratic HBT in Illinois Amazon presidential candidates. Instead, the book may be best understood as a kind of populist entering Iowa seeks expert amicus brief in support of the bill Klobuchar introduced in February to update the current state of antitrust legislation in the United with deal for in blockchain, States, as embodied in the aging Sherman and Clayton Acts. Cedar Rapids distributed Called the Competition and Antitrust Law Enforcement Reform Act (or Calera), the bill would make a number of sweeping changes, bank finance chief among them lowering the standard required to trigger antitrust enforcement. By John Reosti By John Adams Currently, the government must show June 07, 2021 June 08, 2021 that a merger would “substantially” lessen HBT Financial in Bloomington, Illinois, Amazon is recruiting an executive with a competition in a given market; under Calera, has agreed to acquire NXT Bancorp in Cedar background in technology consistent with the test is only that such a merger holds Rapids, Iowa. embedded finance and digital currencies. “an appreciable risk of materially lessening The $42.8 million cash-and-stock deal, Amazon’s posting is for Head of Product, competition, or to tend to create a monopoly announced Monday, represents 134% of the Blockchain for Amazon Managed Blockchain, or a monopsony.” Which raises the question, $241 million-asset NXT’s tangible book value. a service that develops use cases for which fortune tellers should we tap to forecast Acquiring NXT, the parent of the 75-year- distributed finance, supply chain, financial “appreciable risk”? old NXT Bank, would give $3.9 billion-asset services and digital identity. Amazon says it’s Another proposed change is the lower HBT its first toehold in eastern Iowa and particularly interested in either DeFi — which threshold purchase price — from $100 Cedar Rapids, where NXT Bank holds 2% of usually refers to financial transactions that are million to $50 million — that would trigger the market’s $7.2 billion in deposits. executed by smart contracts on blockchains an assumption of illegality when the acquirer “NXT is located in very nice communities — or traditional financial services. has revenues of more than $100 billion. in Eastern Iowa, and we are excited about DeFi has become popular among digital This limit would sweep thousands of small serving the area,” HBT Chairman and CEO currency developers and fintech startups companies into the danger zone for potential Fred Drake said in a press release. as a way to streamline payments and other buyers. In her book, Klobuchar makes much The deal is expected to close in the fourth financial services by either eliminating or of a recent decline in entrepreneurship in the quarter. The combined company would have hastening steps in transaction processing. United States, something that she attributes assets of $4.1 billion, loans of $2.5 billion and Amazon does not have a publicly known (like much else) to creeping concentration. deposits of $3.5 billion. digital currency project, but it has reportedly But with her bill, she would effectively close “We’re excited to join with Heartland Bank considered the concept. Amazon shoppers off one reason many become entrepreneurs to bring a broader line of financial services to would convert cash to digital currency for use in the first place — a successful exit through a our commercial and retail customers and to across Amazon’s shopping, entertainment sale to a larger company. have the additional resources and expertise and other services, a feature that would None of which means that the growing to expand our business,” NXT Chief Executive encourage users to remain inside Amazon’s concentration of economic power in the Nathan Koch said in the release. app. United States is not a serious problem, The deal is HBT’s first to buy a bank since Amazon has also developed a range of requiring serious medicine. But as a self- its $158 million initial public offering in retail technologies such as checkout-free avowed specialist in antitrust, Sen. Klobuchar October 2019. payments. Amazon did not respond to a offers both simplistic diagnoses (skewed request for comment. by today’s penchant for framing every The e-commerce giant’s job posting comes debate in terms of heroes and villains) and as Diem, the Facebook-affiliated stablecoin, policy prescriptions that may have serious, approaches launch. A recent report from unintended side effects. the Federal Reserve Bank of Richmond suggests large technology companies may David J. Evans is the chief content officer at have difficulty offering their own private Arizent. He lives in Westchester County, New currencies due to a lack of scale. q York. © 2021 Arizent and American Banker. All rights reserved.

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