Updated CBLR; Revolut Valued at $75Bn; Klarna Teases Stablecoin

New unemployment claims drop. Consumer spending sending mixed signals. Regulators propose revised Community Bank Leverage Ratio framework. Green Dot acquired. Revolut valued at $75Bn. VALT applies for de novo. PayPal and Perplexity partner. Klarna teases a stablecoin.

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New Unemployment Claims Drop

New unemployment claims unexpectedly dropped last week. Initial claims decreased by 6,000 to 216,000 for the week ending November 22, the lowest level since April. Continuing claims, often treated as a proxy for the number of people receiving unemployment benefits, ticked up to 1.96MM. Still, despite the relatively benign employment picture, consumer confidence worsened, with a measure calculated by The Conference Board dropping 6.8 points to 88.7, the largest drop in some seven months. A forward-looking measure of expectations for the next six months decreased to the lowest level since April. The percentage of consumers expecting their incomes to increase over the next six months also hit the lowest level since April.

Consumer spending behavior, meanwhile, is sending somewhat mixed signals. U.S. retail sales rose slightly in September, with retail purchases, not adjusted for inflation, inching up 0.2% vs. a 0.6% gain in August. But, as we enter the holiday season, retailers’ outlook is relatively bullish. Holiday shoppers are spreading out their purchases over a longer time frame this year, with more than half (52%) of consumers saying they began their holiday purchasing before October, according to a Bank of America Institute Holiday Spend report.

Regulators Propose Lowering Community Bank Leverage Ratio

Last week, the Federal Reserve, the OCC, and the FDIC released a joint proposal to revise the Community Bank Leverage Ratio (CBLR), a capital management framework smaller banks can choose to opt into. A statement accompanying the proposed changes emphasized that it “reflects a deeper understanding of the unique business models, risk profiles, and operational realities of community banks.” The key change would see the minimum leverage ratio drop from its current 9% to 8%. The proposal, if finalized, “would reduce regulatory burden and provide community banks with greater flexibility and optionality in their capital management approach,” the statement says. The lower leverage ratio requirement could allow banks under the CBLR framework to redeploy capital elsewhere, whether to increase lending or to make investments in technology infrastructure, for instance.

Green Dot to be Acquired

Green Dot, an early player in the fintech and partner banking spaces, has entered agreements to be acquired. Smith Ventures, a private equity firm, will acquire and take private Green Dot Corp’s non-bank assets. CommerceOne will acquire the company’s bank subsidiary, Green Dot Bank, to form a publicly traded bank holding company. According to a news release, the implied value to existing Green Dot shareholders is approximately $14.23 to $19.18, based on an assumed tangible book multiple of 1.0x to 1.8x, which implies a value of between $825MM and $1.1Bn. Green Dot was a major player in the prepaid card space. The company IPO’d in 2010 and acquired Utah-based Bonneville Bank in 2011. CommerceOne will serve as the exclusive bank issuing partner for the fintech portion of Green Dot acquired by Smith Ventures.

William Jacobs, board chair of Green Dot, commented on the deal, saying, “This marks an exciting milestone for Green Dot and presents tremendous opportunity for the business and its shareholders, customers and employees. Through these transactions, management can focus on unlocking and maximizing the potential of the fintech business and take a more focused approach to reinforcing, sustaining and growing the bank. We look forward to sharing more on our plans and progress in the near future.”

Revolut Valued at $75Bn

Revolut saw its valuation jump to $75Bn in a share sale the company completed last week. The milestone means Revolut has seen its valuation increase by an astounding $30Bn since last year. The share sale was led by Dragoneer, Greenoaks, Coatue, and Fidelity, with participation from Andreessen Horowitz, T. Rowe Price, and Franklin Templeton. Revolut cofounder and CEO Nik Storonsky commented on the transaction, saying, “This milestone reflects the remarkable progress we have made in the last twelve months towards our vision of building the first truly global bank, serving 100 million customers across 100 countries.”

VALT Applies for De Novo Charter

Add another name to the list of de novo charter applications. VALT, founded by a group of former U.S. Bank execs, submitted an application to form VALT Bank, N.A., to the OCC on November 13. The proposed digital-only bank would focus serving small and mid-sized business, according to the public portion of its application. VALT intends to offer deposit and credit products, cash management solutions, and SMB-focused “automation solutions.” Proposed VALT director and CEO Matt Gediman explained to Banking Dive, “When we refer to ‘digitally demanding SMBs,’ we mean revenue-generating small and midsized businesses that use technology across their daily operations and expect the same level of technological fluency from their financial service providers.”

Paypal and Perplexity Partner

PayPal is teaming up with the AI platform Perplexity to make merchants discoverable via Perplexity’s chatbot and to give consumers the ability to checkout directly within their chat. The new capability gives shoppers all of the benefits of paying via PayPal, including identity verification and purchase protection, without leaving the chat interface, the companies said. The integration is an example of the nascent area of “agentic commerce,” or when AI agents execute a transaction on a consumer’s behalf. PayPal GM of Small Business and Financial Services Michelle Gill commented on the news, saying, “We are building for the next era of commerce by connecting PayPal’s trusted payments and buyer protection directly to AI-powered shopping. Our collaboration with Perplexity is the opening act of PayPal’s innovation in commerce for the agentic era. This is the continuation of our decades-long commitment to make AI-driven commerce seamless and interoperable across every platform.”

Klarna Teases Its Own Stablecoin

Klarna cofounder and CEO Sebastian Siemiatkowski, once a crypto skeptic, is now embracing digital assets, he said as the buy now pay later lender announced plans to launch its own stablecoin, KlarnaUSD. The company is still in the early stages and is only testing crypto on its internal systems, according to Klarna’s news release. A company spokesperson told Payments Dive it is evaluating how stablecoins could be used to reduce the cost of international payments within Klarna and that the company intends to look at consumer peer-to-peer and cross-border use cases.