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Did you know nomination

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Created by Red-tailed hawk (talk). Number of QPQs required: 2. DYK is currently in unreviewed backlog mode and nominator has 24 past nominations.

— Red-tailed hawk (nest) 06:38, 1 December 2024 (UTC).[reply]

  • This is not a review but rather than a comment, but ALT0 and ALT3 will probably have to be rejected due to both WP:DYKINT concerns (reliance on specialist terms that may not be easily understood by non-financial savvy readers, especially outside the US) and for also sounding rather promotional. ALT2 might be the only suitable option at this point. Narutolovehinata5 (talk · contributions) 00:44, 2 December 2024 (UTC)[reply]
    I understand how one could read Alt0 to be promotional (though I disagree and don’t see why non-insured demand deposit accounts are appealing but for their higher rates, which isn’t in the hook). But I’m really not sure how Alt3 could be seen that way—it’s highlighting that they don't purport to offer mortgage-backed securities even though they make what appears (to at least some professors cited in the body) be some sort of securitized loan offering without registration. That being said, I do take your point that people who don’t know much about managing their finances through investment could find these two hooks’ nuances hard to understand.
    Separately, I had been considering a book about the mysterious non-existent partnerships with banks that are mentioned in the article and were the subject of Senate scrutiny, but I couldn’t figure out a way to write it concisely in hook form without oversimplifying. I’ll take a crack at that over the next couple days with a clear head. — Red-tailed sock (Red-tailed hawk's nest) 16:10, 2 December 2024 (UTC)[reply]


General: Article is new enough and long enough
Policy: Article is sourced, neutral, and free of copyright problems
Hook: Hook has been verified by provided inline citation
QPQ: Done.

Overall: Thank you for this carefully-detailed article about financial wheeler-dealing. Contrary to above comments, it would seem to me that any intelligent person can smell he stink emanating from that dodgy company, no matter what country they are in. So well done for alerting us to it, and well done for writing hooks which may guide readers to take a good look at the article. I could tell from the hooks alone that there was something very unsafe about the company's handliing of money, so I would certainly not take the hooks as obscure or uninteresting.

Good to go, with a preference for ALT3, even though it has 199 characters (i.e. close to the max of 200). Please do not prune ALT3, because this kind of financial detail is important and should not be messed about with. Thank you. Storye book (talk) 13:58, 10 December 2024 (UTC)[reply]

Red-tailed hawk, am I right to read "and is not FIDC-insured" as only indirectly relevant to the rest of the hook? ~~ AirshipJungleman29 (talk) 11:58, 16 December 2024 (UTC)[reply]
@AirshipJungleman29: I am going to give a long-winded answer for posterity’s sake, but the short answer is that it is directly relevant.
The way that the fractional-reserve banking systems works (in a very simplified way) is that banks receive deposits from customers and pool those funds to make loans, while keeping only a minimal small fraction of deposits as actual cash on hand. Banks receive interest payments from the loans they have made, and in turn provide customers with interest in their deposit accounts. In the U.S., banks are required to be FDIC insured—this keeps confidence in banks and prevents a bank run.
Tellus, however, is not a licensed bank. As such, it doesn’t answer to the banking regulators. It also doesn’t hold FDIC insurance, as non-bank financial firms aren’t eligible for it.
There is another to pool money from several individuals in order to issue a loan—securitization. In the mortgage industry, it is common for mortgage issuers to sell mortgages to other banks and Qualified institutional buyers, who would collect the interest in the long run. A mortgage-backed security is a financial instrument that is backed by these sorts of mortgages (alone or pooled with others); the security is broken into shares which are then distributed to other parties. Unregistered securities exist, and can even be sold between third-party banks and other QIBs under SEC rule 144A, but the big rule is that you can’t sell them to ordinary people because.
The way that Tellus boost/reserve works (based on their January 2023 Boost ToS) is that deposits are general obligation debts of Tellus to its account holders, and represents only a debt from Tellus to the account holders. Tellus says that the cash accounts are not mortgage-backed securities because they are not; in fact, they’re backed only by Tellus’s future income as a firm—there is no specific asset backing them.
So, you’ve got something here that they say is not a mortgage-backed security. And they also aren’t claiming that it’s a demand deposit backed by a specific asset, while also claiming in advertising that one can withdraw money (for boost accounts) whenever one would like. So one’s left with concluding that that they’re essentially securing private, apparently callable (in advertising but not in the actual customer agreement), interest-bearing debt financing to themselves from a set of people that apparently includes non-accredited investors. And the company is using that money (based on public statements) for commercial lending of its own.
So, yes, the FDIC part matters, since it indicates that the firm is not acting like a bank would. And the MBS part matters, as it indicates that there is no specific asset backing the deposits. It’s its own thing, and it’s a unique and unusual model for a consumer-facing business’s finance arm.
— Red-tailed sock (Red-tailed hawk's nest) 17:19, 16 December 2024 (UTC)[reply]
  • The hook has been pulled from Prep owing to concerns about the original hook (which is now struck). Per the discussion at WT:DYK, there are two possible options: ALT2, and a hook proposed by RoySmith (labeled as ALT4 here):
  • ALT2: ... that California-based startup Tellus pivoted from being a property management app to a consumer-facing financial services company?
  • ALT4 ... that while Tellus uses non-FDIC insured consumer deposits to make real-estate loans, it states that it does not offer mortgage-backed securities?
While one editor also said ALT2 is suitable, discussion leaned more towards either of these two, so a new reviewer is needed to make a final decision. Narutolovehinata5 (talk · contributions) 11:07, 1 January 2025 (UTC)[reply]
No, the discussion did not determine that, nor strike those hooks. Please do not strike my comments against the guidance of WP:TPO and please self-revert, as you have become WP:INVOLVED here. — Red-tailed hawk (nest) 22:38, 1 January 2025 (UTC)[reply]
I did not strike your comments, only some of the hooks above. Striking hooks is a common practice on DYK regarding hooks that are deemed to no longer be under consideration. For what it's worth, there did seem to be (emphasis on "seem" here, so correct me if I'm wrong) loose consensus that the original hook was problematic, so that's probably out of the question now, though the discussion didn't rule out RoySmith's rewording of it. That's why there's the request for a previously uninvolved reviewer, to make sure the final decision is impartial. Narutolovehinata5 (talk · contributions) 01:17, 2 January 2025 (UTC)[reply]
For the benefit of any new reviewers, the abovementioned discussion about this nomination is at Wikipedia talk:Did you know#Tellus (app). Storye book (talk) 10:21, 2 January 2025 (UTC)[reply]
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