Mortgage Rates Jump; Bank Dereg Bill Passes House; Chime Adds Investing
Tariffs are back in the headlines. Mortgage rates jump. Main Street Capital Access Act passes the House. A Kansas bank fails. State AGs oppose Enova, OppFi bank deals. Augustus raises $180Mn Series B. BNY Mellon testing tokenized Treasuries. Coinbase rolls out x402 support. Chime adds investing feature.
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Tariffs Are Back
Tariffs are back in the news. Last week, the Trump administration announced a new set of tariffs ranging from 10% to 12.5% that will cover more than 80 countries that comprise approximately 99% of all trade with the United States. The new tariffs are, according to the administration’s announcement, intended to combat forced labor. The new tariffs went into effect on Friday, functionally replacing the temporary 10% global tariffs that expired the same day. Given the effective rates are roughly comparable, the economic and inflationary impacts of the new tariffs are expected to be minimal.
Meanwhile, mortgage rates jumped last week, hitting their highest level in almost a year. The 30-year fixed-rate averaged 6.58% last week, up 3bps from week prior, per data from Freddie Mac. The 10-year Treasury yield is benchmark for the 30-year mortgage rate. Treasury yields jumped following the resurgence of the military conflict in the Middle East, with fears that higher oil prices will push costs up across the economy. Oil benchmarks exceeded $100 a barrel after attacks on tankers in the Red Sea and were hovering around $98 as of Friday.
Main Street Capital Access Act Passes the House
The Main Street Capital Access Act passed in the House, 270-155, with some bipartisan support. Still, the measure faces an uphill battle in the Senate, where it would require 60 votes to pass. Sen. Elizabeth Warren (D-MA), the ranking member on the powerful Senate Banking Committee, has already made clear she does not support the bill. Warren described the bill as a “massive giveaway to Wall Street” in a statement, adding, “The bill would relax supervision of big banks and their executives, fast track big bank mergers, exempt more big banks from enhanced oversight, and provide big bank lawyers with new tools to overturn safeguards and enforcement actions in court. And it shreds bipartisan compromises struck during the negotiation of the 21st Century ROAD to Housing Act, inviting much greater risk into the banking system.” The House bill includes a number of provisions, including elements designed to encourage de novo bank formation, to reform components of the CAMELS rating system, and to raise thresholds under which depositories qualify for less stringent oversight, among other measures. While Warren has made her opposition clear, some of her Democratic colleagues in the House did vote for the bill. A group led by Illinois Rep. Bill Foster argued in favor of the bill, while California Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, encouraged her colleagues to vote against it.
Kansas Bank Fails
Kansas-based Small Business Bank failed earlier this month, with the FDIC stepping in as receiver. The Farmers State Bank of Oakley will assume all of the failed bank’s deposits and purchase select assets. As of the end of the first quarter, Small Business Bank reported total deposits of $69Mn and total assets of $73Mn. The failure is expected to cost the FDIC’s deposit insurance fund approximately $5.7Mn, depending on the sale price of the failed bank’s retained assets. Small Business Bank marks the fourth bank failure this year.
State AGs Oppose Enova, OppFi Bank Deals
Twenty state attorneys general have sent federal banking regulators a letter, urging them to block two deals that would see higher-APR lenders acquire existing banks. The effort, led by Illinois’ attorney general Kwame Raoul, is in response to Enova’s bid to acquire Grasshopper Bank and OppFi’s planned acquisition of BNC and its subsidiary, BNC National Bank. Both Enova and OppFi currently lend through a mix of state licenses and bank partnerships. The attorneys general’s letter encourage regulators to reexamine the acquisitions, saying in part, “As the regulators that manage national bank charters, bank holding companies, and deposit insurance, you collectively determine who is allowed access to national banking privileges and what responsibilities and conditions they must meet. We urge you to prohibit such access to entities that have a track record of brazenly attempting to evade state law and disregarding consumer protections.” In addition to Illinois’ Raoul, attorneys general from Arizona, California, Colorado, Connecticut, D.C., Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington signed the letter addressed to FDIC Chair Travis Hill, Fed Chair Kevin Warsh, and OCC Comptroller Gould.
Augustus Raises $180Mn Series B
Augustus, which received conditional approval of its OCC charter application in May,announced it has raised $180Mn in a Series B round led by Tiger Global, with participation from QED and Hummingbird. Augustus has described its mission as building a US dollar clearing bank that is stablecoin- and AI-native. The company’s core offering is providing US dollar rail and account access to global financial institutions and fintechs, including in Latin America, Southeast Asia, and Africa. The company plans to use the funds to continue developing its proprietary core, named Marble, which, the company says, enables Augustus to offer real-time availability and faster settlement times. Augustus cofounder and CEO Ferdinand Dabitz commented on the raise, saying, “We started Augustus with a simple thesis: the Dollar is the greatest product in the world but its distribution is fundamentally broken. This financing lets us execute on our mission to provide high-quality dollar access to international fintechs and banks. It's time to dollarize the world.”
BNY Mellon Testing Tokenized Treasury Transactions
BNY Mellon is testing capability necessary for the trading of tokenized Treasuries on a blockchain-based system that would enable 24/7 transactions starting in 2027, the bank said last week. BNY conducted one test transaction utilizing Ripple’s RLUSD stablecoin, and a second test with OpenEden’s USDO. The test transactions were settled in cash using traditional rails, but demonstrated the feasibility of conducting Treasury activity tied to stablecoin reserves outside of the primary U.S. settlement window offered by theFederal Reserve’s Fedwire Securities service.
Coinbase Launches Support for Agentic Payment Protocol
Coinbase Business users can now accept payments from AI agents utilizing the x402 protocol, the crypto exchange said last week. The x402 protocol, incubated by Coinbase, is designed to facilitate secure payments by AI agents authorized by users. The capability announced last week will enable Coinbase Base users to accept agent-initiated payments with no additional setup or configuration. Head of Coinbase Business Sid Coelh-Prabhu commented on the announcement, saying, “We are delivering that experience for the new online agentic economy. Agents, on one side of the transaction, will go and read the Coinbase developer docs, create a wallet for themselves, and are ready to shop. Then we empower businesses so that everything in their inventory is now available on the internet through this agent-friendly checkout flow.”
Chime Adds Investing Feature
Chime is expanding into investing, the consumer neobank announced last week. The company, which IPO’d last June, will now let users buy individual stocks and ETFs commission free. Alternately, Chime customers can use a roboadvisory-style product from Chime partner Atomic Invest to create an investment portfolio based on their personal characteristics, goals, and risk tolerance. The automated portfolio option carries a fee of 0.25% of assets under management, for regular Chime members, or 0.1% of assets under management, for Chime members who opt to pay a monthly fee for the company’s Chime Plus program. Chime CEO Chris Britt commented on the launch, saying, “The hardest part of investing is often getting started and sticking with it. Millions of people already trust Chime with their money every day. By bringing investing into the app they already know and love, we’re making it easier to turn saving into investing and investing into long-term wealth.”
