Episode 65 - Bringing Securities-Based Lending to the Mass Affluent with Peter Gordon (Harborline Tech)

So over the last couple of years, I had the role as treasurer of my homeowners association.

And I was kind of surprised as I was trying to get people off of dropping off checks at my door or doing bank bill pay, tried to get everybody over to Zelle, but I found that a number of homeowners had their accounts through wealth management firms.

And they all said, well, I can't do Zelle through my checking account through such and such firm.

And I was kind of like, wait a second.

I mean, this isn't something new.

And to me, it just it sent a message that in the wealth arena that they just haven't gotten up to speed with what's basic technology.

But most of us assume is basic technology for for a bank to have to make payments.

Well, so there's more backstory to this, and the broker-dealers certainly can do that.

But Zelle, by rule, prohibited broker-dealers from participation.

So the rules suggest that, or very much outline, they prohibit broker-dealers from participation.

So most banks, most broker-dealers that don't have banks, like Fidelity, who is, most people don't know, Fidelity Investments is really the largest fintech in the U.S. that nobody knows about.

It clears through 25 banks.

I was responsible for the cash management.

Basically, the banking functions there, we cleared through.

Our cash management went through 25 banks.

And so because they didn't have a bank charter, they were prohibited by rule.

And what I recall, actually, when the rules were being developed at Zelle, in EWS.

The reality is there was no broker person at the table.

And so it wasn't quite as nefarious as saying we shouldn't have broker dealers.

What happened was they wrote the rules and said, no, there was no lawyer, no person, you know, banking people don't know wealth management, wealth management don't know banking.

So someone said, oh, we'll just exclude it for now.

We'll go back and revisit it.

What actually happened is it worked as a moat for some of the bank owners and US Bank, who I worked for, was an owner of Zelle.

And so it allowed, you know, so Zelle didn't want early stage broker dealers, I won't name them, but they certainly wanted the Fidelity's of the world.

But they didn't want some of the early stage to disrupt and didn't think that they had the sophistication around, as you know, a lot of scams and things like that they didn't want to introduce.

So over the last couple of years, I had the role as treasurer of my homeowners association.

And I was kind of surprised as I was trying to get people off of dropping off checks at my door or doing bank bill pay, tried to get everybody over to Zelle, but I found that a number of homeowners had their accounts through wealth management firms.

And they all said, well, I can't do Zelle through my checking account through such and such firm.

And I was kind of like, wait a second.

I mean, this isn't something new.

And to me, it just it sent a message that in the wealth arena that they just haven't gotten up to speed with what's basic technology.

But most of us assume is basic technology for for a bank to have to make payments.

Well, so there's more backstory to this, and the broker-dealers certainly can do that.

But Zelle, by rule, prohibited broker-dealers from participation.

So the rules suggest that, or very much outline, they prohibit broker-dealers from participation.

So most banks, most broker-dealers that don't have banks, like Fidelity, who is, most people don't know, Fidelity Investments is really the largest fintech in the U.S. that nobody knows about.

It clears through 25 banks.

I was responsible for the cash management.

Basically, the banking functions there, we cleared through.

Our cash management went through 25 banks.

And so because they didn't have a bank charter, they were prohibited by rule.

And what I recall, actually, when the rules were being developed at Zelle, in EWS.

The reality is there was no broker person at the table.

And so it wasn't quite as nefarious as saying we shouldn't have broker dealers.

What happened was they wrote the rules and said, no, there was no lawyer, no person, you know, banking people don't know wealth management, wealth management don't know banking.

So someone said, oh, we'll just exclude it for now.

We'll go back and revisit it.

What actually happened is it worked as a moat for some of the bank owners and US Bank, who I worked for, was an owner of Zelle.

And so it allowed, you know, so Zelle didn't want early stage broker dealers, I won't name them, but they certainly wanted the Fidelity's of the world.

But they didn't want some of the early stage to disrupt and didn't think that they had the sophistication around, as you know, a lot of scams and things like that they didn't want to introduce.