Fintech Recap: The Future of BaaS, IPOs, and Employer-Fintech Overlaps: A 2025 Preview

Jan 8, 2025

Join Jason Mikula, a fintech expert and author of Banking as a Service, as he dives into the latest in fintech trends. He discusses the recent legal battle involving CBW Bank and the implications for BaaS amid hefty FDIC penalties. Jason also highlights the anticipated wave of IPOs in 2025, especially focusing on Chime's impressive customer base. The conversation raises ethical concerns about Walmart's financial practices affecting employees and the need for stronger oversight in employer-sponsored fintech solutions. Tune in for an engaging peek into the future of financial technology!

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ANECDOTE

CBW Bank's Regulatory Challenges

CBW Bank, an early fintech partner for companies like Moven and Ripple, faces a $20M FDIC penalty.
They challenge the FDIC in court, raising questions about community bank charters in nationwide payments.

INSIGHT

Homegrown AML Systems and Regulatory Risk

CBW Bank's homegrown AML system might have contributed to regulatory issues.
Regulators may evaluate banks based on available modern AML systems, not just legacy ones.

INSIGHT

Balancing Customer Interests and Regulatory Compliance

CBW Bank's case highlights the risk of prioritizing customer interests over filing SARs (Suspicious Activity Reports).
Their president explicitly stated this to examiners, revealing a potential conflict of interest.

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Welcome to the first Fintech Recap of 2025. As always, I’m joined by Jason Mikula, publisher of Fintech Business Weekly and author of the shiny new book Banking as a Service (which I’m loving, by the way), as we catch up post-holiday to dive into the fintech buzz.

First pit stop: BaaS Island and the CBW Bank saga. This small player with a big history—partnering with pioneers Moven and Ripple—just got slapped with a major $20M penalty from the FDIC. But CBW is fighting back, challenging the FDIC in court. As fintech blurs the line between community banks and fintech giants, can a community bank charter truly handle nationwide payments and high-stakes BaaS?

Next up, get ready for the IPO tidal wave in 2025. It’s shaping up to be a big one for fintech, and Chime is at the forefront, gearing up for its big debut. While there's chatter about their customer count—anywhere from 7M to 38M—one thing's undeniable: Chime boasts a solid customer base with impressive direct deposit adoption. Things are about to get interesting.

Moving on, Walmart and Branch are in hot water with the CFPB for allegedly opening accounts for Walmart Spark drivers without consent, forcing them to use Branch or risk termination. This raises huge questions about employers embedding financial services in their workers’ lives. Not to mention, the urgent need for tighter oversight on employer-sponsored fintech in 2025.

Plus, we rant about Vivek Ramaswamy’s unhinged tweet blaming the 90s pop culture—like Boy Meets World and Friends reruns—for America’s software engineer shortage. Yep, seriously. It’s Whiplash reruns or nothing for the "Department of Government Efficiency.” Here’s looking at you, 2025.

00:04:19 - Return to BaaS Island

00:23:59 - IPO Watch: Chime

00:40:59 - Walmart x Branch

00:56:35 - Can’t Let It Go

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