Promontory Interfinancial Network, LLC (Promontory) offers two services that allow a financial institution to attract political subdivision deposits without having to pledge collateral. Both the CDARS® and Insured Cash Sweep®, or ICS®, services help your bank to attract large-dollar relationships and reduce collateralization burdens by offering customers access to multi-million-dollar FDIC insurance on funds placed in demand deposit accounts and/or money market deposit accounts through ICS, and in CDs through CDARS. With each service, deposits are exchanged with other Promontory Network member banks on a dollar-for-dollar basis, bringing the full amount of the original deposit back to the originating bank for use in lending or other activities. By providing access to FDIC insurance, CDARS and ICS can help a political subdivision comply with investment policy mandates. And, by offering access to FDIC insurance, banks can improve margins and asset liquidity by reducing collateral-tracking costs and by reallocating repo sweeps and letters of credit into higher-earning assets.
PMA public entity clients regularly utilize ICS and CDARS services to facilitate placement of their deposits. Through these services, public entity clients are able to access FDIC insurance on their deposits while working directly through a single Relationship Institution. PMA works with public entity clients to develop short- and long-term cash strategies. These strategies include demand and savings deposits through the ICS service and time deposits of various maturities through the CDARS service. As a result, the deposits of PMA’s public entity clients can provide an excellent source of stable funding.