NBC develops secure solutionNational Bank of Commerce is offering convenience and security to its large deposit customers resulting from a partnership with Promontory Interfinancial Network LLC.
By: Shelley Nelson, Superior Telegram
National Bank of Commerce is offering convenience and security to its large deposit customers resulting from a partnership with Promontory Interfinancial Network LLC.
The Insured Cash Sweep offered by the Promontory network provides convenience and peace of mind to large depositors. It allows them to utilize one bank but divides large deposits among more than 3,000 banks in the network to ensure coverage through the Federal Deposit Insurance Corporation.
“It’s a safe haven for large depositors ... whether its nonprofits, businesses, local governments,” said Valarie Blanchenay, National Bank of Commerce marketing director.
FDIC insures checking and savings accounts, money market deposit accounts and certificates of deposit up to $250,000 per depositor, per insured bank, for each account ownership category.
The ICS program was developed about two years ago from the network’s Certificates of Deposit Account Registry Service, said Promontory spokesman Phil Battey. CDARS has been around for more than 10 years, he said.
The program divides money into amounts less than the standard $250,000 FDIC maximum and places it with banks that are part of the Promontory Interfinancial Network around the country. The deposit is then eligible for the FDIC insurance at each member bank where it is held. By working with one network member, like National Bank of Commerce, customers have peace of mind because they have access to FDIC insurance for the deposits through each member institution in which the money is deposited.
Large organizations that need to use multiple banking institutions, with multiple statements to track their money, would be spared the trouble of finding additional institutions through the ICS program.
“The customer could then access all of their funds from one bank and they would get one statement,” Blanchenay said. “It makes it easier for them.”
Battey said customers have been very happy with the service because it gives them peace of mind their deposit is secure.
“People are interested in security and that’s what we provide,” Battey said. “We provide security by placing their deposits in institutions so they have access to federal deposit insurance beyond the standard $250,000.
“There’s nothing safer than FDIC insurance. Since the agency was founded in 1933, no one has lost a single cent in an FDIC insured account,” said Battey, who previously worked for FDIC.
Statements include the names of banks and how much money is held at each.
Promontory Interfinancial Network was founded to help banks compete. Over the past decade, the company has built strong relationships with thousands of financial institutions across the nation. Eugene Ludwig, former U.S. Comptroller for the Currency; Allen Blinder, co-director of Princeton’s Center for Economic Policy Studies; Mark Jacobsen, chief of staff at the FDIC and the Office of the Comptroller of the Currency; and Alfred Moses, senior counsel at Covington & Burling founded the organization and still serve on the board.
Blanchenay said the program also allows depositors to earn interest and withdraw their funds up to six times a month, allows them to review their accounts online through a dashboard and see where their money is being held.
“National Bank of Commerce is the first and only institution in the area to offer a service to customers,” Blanchenay said.