Dan Awrey

Professor of Law @CornellLaw | Research Member @ecgiorg | Co-Managing Editor @JFinReg

[Dan Awrey @DanAwrey]

📢👷🏼🛠️ NEW WORKING PAPER exploring the impact of technological disruption on bank business models, consumer expectations, and financial stability. Questions, comments, and suggestions all very welcome: https://t.co/vKueJFk8nv

[Brendan Greeley @bhgreeley]

...and is available for pre-order! https://t.co/NJzoUMaS8k

[Dan Awrey @DanAwrey]

@Schornack Thanks for the shout out! I do expressly address this near the end of the book. I’m very much on record extolling the virtues of fractional reserve banking as a driver of economic growth. And the book is pretty clear that I’m not trying to replace banks.

[Jason Mikula @mikulaja]

🚨 BREAKING: CFPB says that by Sept'23 "both Evolve and Synapse were aware that there was a deficit of tens of millions of dollars in funds that Evolve was holding for End Users" in just-released complaint:

The CFPB complaint alleging Synapse violated the Consumer Financial Protection Act by engaging in "unfair" acts or practices by failing to maintain adequate records was filed as part of the bankruptcy case today, August 21st, I believe I'm the first to report.

While the complaint largely rehashes already disclosed information, it's now being alleged by a government agency. A couple interesting items worth noting:

-The CFPB alleges that "[c]onsumers did not have control over how Synapse moved or tracked funds across different Partner Banks that were holding their funds and processing their debit card, ACH, and wire transactions."

-and that "[c]onsumers were substantially injured because Synapse’s records did not match the records of its Partner Banks."

These are important as they're necessary elements to prove Synapse acted "unfairly."

The CFPB's complaint notes that not all fintech programs "migrated" to the Brokerage/cash management structure, meaning those programs' end users’ funds should have remained with Evolve.

The complaint notes (as was already known) that even for end users who were moved to the cash management program, "Evolve continued to act as a Partner Bank by providing access to certain banking products and services, including by continuing to sponsor debit cards. Evolve also continued to act as the receiving bank for ACH transfers for which consumers had previously been using Evolve’s routing number, such as direct deposit. Evolve continued to maintain accounts on behalf of these End Users to provide these services. Synapse would sweep funds from those accounts to Synapse Brokerage."

The complaint seeks to enjoin Synapse from further violations of the CFPA (a non-issue, as it's bankrupt), additional injunctive relief (also largely irrelevant), award relief the court finds necessary to redress injury to consumers (this theoretically could be a significant monetary amount, though the chance of recovering any money seems very low), and a civil money penalty (necessary to enable CFPB to tap victim relief fund).

It's worth noting that Synapse was a third-party service provider to Evolve. While the CFPB isn't making an accusation that Evolve engaged in "unfair" acts or practices, that doesn't preclude Evolve's regulators, the St. Louis Federal Reserve and the Arkansas State Bank Department, from potentially pursuing an enforcement action against Evolve for "unfair" practices conducted by Synapse on the bank's behalf (though I wouldn't hold your breath.)

Many states offer consumers a *private* right of action for a business' "unfair" conduct, potentially offering victims an avenue to file civil suits against Evolve stemming from Synapse's "unfair" conduct.

[Jason Mikula @mikulaja]

Fintech Biz Weekly just dropped:

Synapse-Evolve victims could end up waiting YEARS to get a CFPB bail out payment, new analysis of Bureau records suggests.

CFPB's average time from a final order to starting payments to victims? A whopping *682 days*

You know where to find it.

[Dan Awrey @DanAwrey]

Meanwhile, so-called "wholesale" or intermediated CBDCs are basically just a reincarnation of the existing system - a label without content. What matters are the choices we make with the design of this system, not the name on the tin 4/4

[Dan Awrey @DanAwrey]

This is a very thoughtful piece by William Buiter on @ProSyn. But like many reviews of #beyondbanks it ascribes to me a position that I don't hold: namely, that we should separate all money and payments from financial intermediation 1/4 https://t.co/8dRjPRpZpL

[Dan Awrey @DanAwrey]

This is also why, to Buiter's lament, I ignore CBDCs. Central banks rarely have an advantage over private firms in conducting technological experiments with new payment tech, let alone the infrastructure we might build on top of it. This makes retail CBDCs a fool's errand 3/4

[Bank for International Settlements @BIS_org]

As stablecoins grow, so does their impact on the markets they invest in. They already influence short-term Treasury yields, with implications for monetary policy and financial stability https://t.co/NzlGUo1hxN

#Stablecoins #Treasuries #FinancialStability

[Dan Awrey @DanAwrey]

@rohangrey @regulatorynerd @tphillips @Arturo_P_A Hey guys, great thread. Trusts, including so-called “springing” trusts, were often pretty central to MTL consumer protection frameworks. But it’s also amazing how much has changed since I wrote my 2020 article, and how much I missed. One day soon we’re going to need Bad Money II.

[Dan Awrey @DanAwrey]

@jon_helgi @mikulaja I’m going to reach out to my publisher right now 👍

[Dan Awrey @DanAwrey]

I really like this pairing @mikulaja!

[Dan Awrey @DanAwrey]

@jon_helgi @mikulaja Mine is available on Kindle in the US, but I’m not sure about elsewhere. It’s also typically hidden under “other formats”.

[Dan Awrey @DanAwrey]

This may take the prize for the most timely law review note in history https://t.co/B5WthDfX8Q

[OCC @USOCC]

A safe, sound and fair fintech business model has a place in today’s federal banking system. Read more at https://t.co/LSN72RO67O

[Aaron Klein @Aarondklein]

The CDFI Fund is one of the most successful programs at getting affordable capital to small businesses and parts of our economy not well served by the existing financial system, like Indian Country. A colossal mistake to shut it down.

[Dan Awrey @DanAwrey]

@PaulBlustein. The US dollar. The world in 2025. It's hard to imagine a more perfect combination of author, subject matter, and timing.

Paul's new book, "King Dollar", is out on March 18th: https://t.co/ibWcD4sM9q

[Paul Blustein @PaulBlustein]

I like to think that my forthcoming book, King Dollar, is pretty good, but it would have been lots better if I had been able to incorporate the superb wisdom and insights from @DanAwrey’s book, which came out just as mine was already in galleys and impossible to change.

[ACEMAXX ANALYTICS @acemaxx]

#Book Review: “good money” vs “good payment”
“Beyond Banks” by @DanAwrey Technology, Regulation, and the Future of Money, @PrincetonUPress 07 Jan 2025, UK.

https://t.co/Pb3xTeLGVK