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CDARS® and IND®
Promontory Interfinancial Network, LLC
| CDARS | IND |
| View a Brief Demo on How CDARS Works |
| CAB Contact Person |
Another Endorsed Solution from the Promontory Interfinancial Network:
| Proceed Business LoanSM |
| Discount for ABA Members Enrolling in CDARS |
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From Oct. 25 – December 11, ABA members can join the Promontory Interfinancial Network -- sponsors of the Certificate of Deposit Account Registry Service -- for 40 percent less than the regular on-boarding rate. ABA endorses the CDARS service, which enables member banks to provide customers with access to $50 million or more in FDIC deposit insurance. CDARS is a funding and liquidity management tool that your organization can use to access funds, manage its balance sheet and enhance its profitability.
Promontory will offer a FREE Webinar entitled "Intelligent Funding and Relationship-Building Solutions" on select dates (see below). To register, click on the link underneath the date that best meets your schedule and follow the easy enrollment instructions. For more immediate information, contact Promontory's Senior Managing Director Steve Kinner at (866) 776-6426 x3445. For an ABA due diligence report on CDARS, e-mail rgordon@aba.com.
Tuesday, November 3, 2009; 2pm ET
https://promnetwork.webex.com/promnetwork/k2/j.php?ED=128260942&UID=1019903897&FM=1
Thursday, November 19, 2009; 12pm ET
https://promnetwork.webex.com/promnetwork/k2/j.php?ED=128266857&UID=1019914927&FM=1
Thursday, December 3, 2009; 1pm ET
https://promnetwork.webex.com/promnetwork/k2/j.php?ED=128267377&UID=1019915767&FM=1
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Promontory Interfinancial Network, LLC ("Promontory") provides profit-building solutions to banks and other financial institutions. Promontory is committed to creating tools that help financial institutions directly manage their liquidity positions, and, ultimately, their bottom lines. The company offers simple, yet innovative solutions through its CDARS®, IND®, and Proceed Business LoanSM services. As a member of the Promontory Network, your bank can use one or all of these ABA-endorsed services to:
CDARS® (or the Certificate of Deposit Account Registry Service®)
Promontory's flagship service, CDARS®, (also known as the Certificate of Deposit Account Registry Service®), enables Network Members to offer each of their customers access to $50 million or more in FDIC-insured CDs. With a growing number of customers ranking financial stability as their top priority when choosing a bank, CDARS can provide member institutions with a way to attract large deposits. CDARS placements average over $1,000,000 per customer and reinvestment rates average approximately 80 percent. In addition to using CDARS as a deposit-gathering tool, Promontory Network members can use the service to sell excess deposits and generate fee income, or to purchase funds at favorable rates without burdensome collateralization or stock purchase requirements.
On the deposit-gathering side, CDARS provides each Network Member with the opportunity to serve as the one bank that meets all its customers' needs. Using CDARS, customers can access:
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Safety – Deposits are eligible for multi-million dollar FDIC insurance coverage.
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Convenience – With CDARS, investors manage one bank relationship, earn one rate on their entire investment, and receive one regular account statement. This can save them from entering into multiple rate negotiations and manually consolidating account statements. Additionally, by providing access to multi-million dollar FDIC insurance, CDARS can eliminate the need for private insurance or collateralization – so customers can say "goodbye" to tracking changing collateral values if they were accustomed to doing so. (And, because the service can be used as a way to provide access to insurance coverage for deposits that would otherwise require collateral or surety bonds, it provides financial institutions with more flexibility to manage their investment portfolios and can decrease their administrative tracking burdens, too.) Investors may also enjoy the benefit of receiving only one 1099 at year end.
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Rate – Customers earn CD-level returns. Depending on a bank's offering, these rates may compare favorably with other investment alternatives, including Treasuries, sweep accounts, and money market funds.
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Community Investment – Under certain circumstances, the full value of a customer's deposit can support lending opportunities that strengthen the local community. This can be an important selling point for some depositors.
When a bank places a customer's deposit using the CDARS service, that deposit is broken into amounts under the standard FDIC insurance maximum (making the full amount eligible for FDIC insurance coverage) and spread out among other members of the Network. In return, the originating bank receives either matching deposits or fee income. The ability to choose provides banks with a flexible balance sheet management tool that can be utilized based on an individual institution's liquidity position. Note: Each originating bank sets its own interest rate and maintains complete ownership of its customer relationships Funds can be placed through different types of transactionis. Learn more about CDARS® ReciprocalSM Transactions. Learn more about CDARS® One-Way SellSM Transactions .
In addition to the above, CDARS provides Network Members with the ability to purchase short- or long-term fixed rate funding. Participating banks can set their own bid rates and enjoy quick turnaround times (bid Wednesday and receive funds the next business day). Learn more about CDARS® One-Way BuySM Transactions.
CDARS is offered in all 50 states and the District of Columbia through more almost 3,000 Network Members. Read what bankers are saying about the service.
More on CDARS.
To learn more about CDARS, please contact Promontory at (866) 776-6426 or
sales@promnetwork.com or click here.
IND® (or Insured Network DepositsSM)
Members of the Promontory Network can use IND® to obtain cost-effective, uncollateralized, floating rate funding. They can access amounts ranging from $25 million to multiple billions of dollars for terms of three to five years or more. Rates are based on set spread over an established rate (e.g., the Federal Funds Effective Rate or LIBOR). IND funding comes from cash held in millions of brokerage sweep accounts across the nation. Banks can think of this type of funding as similar to issuing a floating rate, multi-year CD.
The IND service has been designed with careful attention to regulatory compliance. The integrity of IND's design is of great importance to Promontory, which values its reputation for compliance and the trust placed in it by its customers.
Approximately 95% of IND deposits will be classified as savings deposits on a bank's Call Report, and as you know, savings deposits are not subject to reserves.
Banks open "omnibus" accounts only, so the administrative/accounting burden associated with using the IND service is minimal. Individual account records are maintained by the broker-dealer. Banks utilizing the service settle on a daily basis, but do not pay settlement fees; the total cost of funds is the rate agreed upon with Promontory. The movement of funds between broker-dealers and banks is settled through IND's settlement bank – The Bank of New York Mellon.
More on IND.
To learn more about IND, please contact Promontory's Treasury Desk at
(866) 776-6426 or treasury_desk@promnetwork.com or click here.
Proceed Business LoanSM
Proceed Business LoanSM is the newest service being made available through Promnetwork Services, LLC, a wholly owned subsidiary of Promontory Interfinancial Network, LLC, to its Network Members. This service enables banks to earn fee income (125-200 basis points per funded loan) by providing small business customers that do not qualify for their traditional loans with access to risk-adjusted, fixed-rate, fixed-term loans of up to $100,000.
More on Proceed Business Loan.
CAB CONTACT PERSON
Lisa Gold Schier (202) 663-5098
E-mail: lgoldsch@aba.com
CDARS and IND are registered service marks of Promontory Interfinancial Network, LLC.
Proceed Business Loan is a service mark of On Deck Capital, Inc.
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