Protect Your Deposits and Help Underserved Communities
ICS® for Socially Responsible Investors
With ICS, the Insured Cash Sweep® service, you can access multi-million-dollar FDIC insurance, earn a return that compares favorably to alternative low-risk investments, and help make communities economically stronger.
In general, when a customer deposits funds with a bank, that bank can use the full amount of the deposit to make loans in its "backyard." This is true for ICS. Leveraging that concept, socially conscious investors can deposit funds through a Community Development Financial Institution (CDFI)1 that offers ICS.
Investopedia describes CDFIs as focusing on "the needs of the poor and working class within urban and rural communities, as many of these citizens are underserved or ignored by traditional commercial banks and lending processes. The goal is to help this group of people become more financially self-sufficient and contribute more to overall economic growth through community redevelopment." (https://www.investopedia.com/terms/c/cdfi.asp)
CDFIs often have difficulty attracting deposits (funding for loans) from local customers (because they are typically located in low-income areas), as well as from non-local customers (because these customers often worry about the safety of their funds). ICS solves this latter problem, enabling socially responsible investors to make a difference in economically distressed communities while keeping funds safe with FDIC insurance eligibility that extends beyond standard limits and [well] into the millions.
CDFIs that receive ICS deposits can use the full amount of these funds for critical initiatives that otherwise might not take place — initiatives like producing affordable housing, financing small businesses, creating jobs, and expanding neighborhood facilities that provide much-needed services for low-income families.2
Making a Difference in Communities Nationwide
The services are brought to you by Promontory Interfinancial Network—a trusted fintech provider chosen by more than 3,000 banks nationwide. In 2018, the company’s services helped mission-based banks—CDFIs and minority-owned banks—attract more than $2 billion in socially responsible investments (deposits).
Banking on Communities Initiative
Insured Cash Sweep has helped the Community Development Bankers Association (CDBA) raise billions of dollars in deposits with the launch of the Banking on Communities initiative—a joint effort by Promontory Interfinancial Network and the CDBA. The CDBA is a national trade association of the community development banking industry established to help its members better meet the credit needs of their communities, and the initiative helps CDBA member banks raise funds that can be used to increase lending in underserved communities. Because of their size (small) and location (underserved communities), CDBA members often find their funding options limited and have fewer resources to devote to attracting deposits.
“Half of our members rely on Promontory [Interfinancial Network's ICS and CDARS] services to attract deposits so they can make loans supporting community development in some of the most underserved urban neighborhoods and rural communities in the country. On average, the community development banks attract reciprocal deposits at four times the level of other community banks. That translates into loans to small businesses, loans for mortgages and home improvement, loans for revitalization projects—loans that otherwise would not be made.”
Chief Executive and Senior Policy Advisor
Community Development Bankers Association
- Community Development Financial Institutions include banks that dedicate the majority of their activities to serving economically distressed neighborhoods and those who otherwise lack access to traditional financial services. They are certified by the U.S. Treasury’s Community Development Financial Institutions Fund and provide credit and other financial services to underserved markets.
- When deposited funds are exchanged on a dollar-for-dollar basis with other banks in the ICS Network, the full amount of the deposit placed through ICS can be used for local lending, satisfying some depositors’ local investment goals or mandates. Alternatively, with a depositor’s consent, an ICS Network member may choose to receive fee income instead of deposits from other banks. Under these circumstances, deposited funds would not be available for local lending.