Fed Rate Cut; CFPB Investigates CapOne; Melio Lands $150Mn Round

The Fed cut rates another quarter point, but Trump’s victory may complicate what comes next. New vehicles are pricier than ever. CFPB investigates CapOne. FTC sues Dave. Fiserv leads $150Mn round into Melio. PowerPay issues $60Mn corporate bond. Marqeta shares tank on forward guidance.

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Fed Cuts Rates 0.25% Points

Last Thursday, the Fed announced a 0.25 point rate cut, bringing the central bank’s target rate down to 4.5% - 4.75%. However, with Trump’s victory in last week’s election, Powell is likely to face questions about what his return to the White House will mean for the economy, including interest rate policy. On the campaign trail, Trump has floated a variety of policy proposals that would come with far-reaching economic implications, including broad tax cuts and universal tariffs. Both policies are likely to stoke inflation, potentially complicating the Fed’s goal of returning to its long-term target of 2% inflation, should the policies come to pass. Trump has also expressed a desire to exert stronger control over the Fed, in general, and interest rate policy, specifically, with one Trump ally suggesting that he nominate and seek Senate approval of Powell’s replacement, despite Powell’s term running through mid-2026. Such a “shadow” Fed Chair could make Powell a sort of lame duck leader, undermining his credibility with markets.

CFPB Investigating CapOne Over Savings Rate Issue

The Consumer Financial Protection Bureau is considering taking action against Capital One over allegations the bank misled users about rates on high-yield savings accounts, the bank said in its most recent SEC filings last week. Specifically, Capital One revealed it had received a civil investigative demand related to accusations it misled users about the rate of interest they were receiving. The dispute stems from legacy accounts Capital One inherited when it acquired ING Direct USA in 2012. Capital One rebranded those accounts as “360 Savings,” but subsequently launched a savings product, “360 Performance Savings,” which paid a higher rate, while one-time ING customers remained in the legacy accounts earning a lower interest rate. The bank already faces several putative class action suits over the matter. Of the CFPB investigation, a Capital One spokesperson said last week, “This investigation relates to a previously reported class action lawsuit filed in 2023, for which we have filed a motion to dismiss in court.”

FTC Files Suit Against Dave Over Alleged Deceptive Practices

Neobank and cash advance app Dave is facing allegations from the FTC that it deceived users about how much money they could qualify for and the fees associated with its advances. Dave heavily marketed advances of “up to $500,” but only a small percentage of users qualified for this amount, the FTC says. And, while the company marketed its advances as “instant” or “on the spot,” Dave charged expedited funding fees from $3 to as much as $25 to receive the advance instantly. Otherwise, users had to wait two to three business days to receive their funds, the FTC complaint alleges. The complaint also argues that how Dave presents the option to leave a “tip,” which emphasizes a donation Dave makes to provide healthy meals through Feeding America, may be deceptive. Dave donates just $0.10 for each 1% point of tip, the complaint says. That Dave charges a $1 per month fee is also not clearly and conspicuously disclosed, the FTC says. Of the complaint, the company said in a statement, “The FTC asserts many incorrect claims regarding Dave’s disclosures and how the Company acquires consent for the fees associated with our products.”

Fiserv Leads $150Mn Round Into Melio

Payments and core banking provider Fiserv is leading a $150Mn strategic investment into account payable and receivable platform Melio, valuing the company at a whopping $2Bn. Shopify Ventures, Capital One Ventures, Accel, Bessemer, Coatue, and others joined the Series E funding round. Melio offers a cash flow management platform, which helps companies more efficiently manage accounts payable and receivable to maximize cash flow. Fiserv’s investment in the company follows a partnership the two formed last year, which combined Melio’s AP/AR workflows with Fiserv’s merchant and biller network and payments capabilities.

PowerPay Issues $60Mn Corporate Bond

Point-of-sale lender PowerPay has inked a deal for a $60Mn bond issuance with KeyBank acting as its exclusive placement agent. PowerPay, founded in 2017, offers financing for healthcare, home improvement, and solar. The company claims to have originated some $8Bn in loans since its founding approximately seven years ago. PowerPay will sue the funds to continue investing in its technology, expanding its operational capabilities, and growing its market footprint.

Marqeta Shares Tank On Forward Guidance

Shares of modern issuer-processor Marqeta swooned with its stock price down about a third since reporting its quarterly earnings after the close on Monday. Marqeta posted an adjusted loss of $0.06 per share vs. an expected loss of $0.05 and revenue of $128Mn vs. consensus expectations of $128.1Mn. Perhaps more worrying than the narrow earnings miss is Marqeta’s forward-looking forecast. The company expects just 10% to 12% revenue growth in Q4 vs. the year, significantly below analysts’ forecast of 17%. Marqeta pointed to regulatory headwinds from increased scrutiny of bank-fintech partnerships, which, the company says, has significantly impacted how long it takes to launch new programs. However, Marqeta expects those timelines to improve as it onboards additional bank partners and makes process improvements to simplify and streamline onboarding workflows.