CDBA and NBA Launch New Program to Boost Deposits at Banks Targeting Local Communities

June 4, 2024

ACT Deposit Program

Socially Responsible Investing

Large Deposit Safety

WASHINGTON D.C. JUNE 4, 2024 – The Community Development Bankers Association (CDBA) and National Bankers Association (NBA) are proud to announce the launch of the Advancing Communities Together (ACT) Deposit Program. This innovative initiative is designed to channel vital funding to banks serving low-income and minority communities while also ensuring all deposits are eligible for FDIC insurance.

At launch, four major financial firms have deposited $35 million in the program, with additional deposits anticipated from a broad range of depositors, including corporations, foundations, and universities.

“The ACT Deposit Program created a secure and efficient way for community development banks to attract and retain large institutional deposits,” said Jeannine Jacokes, Chief Executive Officer of CDBA, which represents CDFI, MDI, and climate-focused banks. “The support from these firms and future depositors will create a lasting positive impact in local areas.”

Nicole Elam, President and CEO of the NBA, emphasized the program’s benefits: “The ACT Deposit Program offers a streamlined approach for providing essential deposits to our member banks serving their communities. This initiative empowers our members to facilitate homeownership, business growth, and financial stability, contributing to job creation and the overall vitality of communities across America.”

The ACT Deposit Program’s four founding firms are Blackstone, BNY Mellon, Warburg Pincus, and IntraFi.

Martin Brand, Head of North America Private Equity at Blackstone, said: “Community banks play an essential role in boosting economic growth and job creation across the country. We’re pleased to support this innovative partnership to help expand access to capital in local markets throughout the United States.”

"Empowering our clients and partners with solutions that enable them to support their unique objectives is core to what we do," said Laide Majiyagbe, Global Head of Financing and Liquidity at BNY Mellon. "We are proud to play a central role in the ACT Deposit Program via our LiquidityDirect platform to connect investors and community banks to help fuel growth for local communities across the country."

Steven Glenn, Managing Director, Chief Financial Officer, Chief Operating Officer, Warburg Pincus, said the ACT Deposit Program aligns with the firm's commitment to growth investing. "We look for opportunities where our resources can help organizations grow and make a positive change in the communities they serve," Glenn said. "Providing access to reliable financial solutions is an incredibly important service. We are excited about the increased lending provided by the ACT Deposit Program and look forward to following the program's impact and progress."

Key Benefits of the Program

The ACT Deposit Program simplifies the process for businesses, nonprofits, community organizations, and high-net worth individuals to place at least $5 million with a community development financial institution (CDFI) or minority depository institution (MDI) bank. Deposits made through the program are distributed among the more than 70 participating CDFIs and MDIs, amplifying the impact of each deposit.

The program is powered by IntraFi through its ICS service, which includes 3,000 banks nationwide. This collaboration offers millions of dollars in aggregate FDIC insurance.

Participating depositors can choose a CDFI or MDI as their relationship bank, which will then allocate part of the deposit to other participating banks. This ensures benefits are shared across all banks in the program. Depositors can also choose to spread their funds among all participating CDFIs and MDIs, with all deposits eligible for FDIC insurance.

Why This Program Is Needed Now

CDFI and MDI banks need deposits to leverage the more than $6 billion in capital they received from the Treasury Department in 2022 as part of the Emergency Capital Investment Program (ECIP), which aims to boost lending in communities hit hard by the pandemic.

To date, 75 CDFIs and MDIs have joined the program. Deposits in the program will yield near-market interest rates, and depositors will receive regular reports on how their funds are being used to support communities.

The ACT Deposit Program is open to any depositor looking to make a positive impact in local communities while ensuring their deposits are protected by FDIC insurance.

For more information about the ACT Deposit Program, and a list of its participating banks, please visit the program’s website: https://www.intrafi.com/act-deposit-program.

‍Media Contact

Rob Blackwell
Chief Content Officer & Head of External Affairs
IntraFi
rblackwell@intrafi.com

(703) 292-3357

‍

Download

IntraFi Insights

Get in Touch

Contact Us

A list identifying IntraFi network banks can be found at www.IntraFi.com/network-banks.

Deposit placement through an IntraFi service is subject to the terms, conditions, and disclosures in applicable agreements. Deposits that are placed through an IntraFi service at FDIC-insured banks in IntraFi’s network are eligible for FDIC deposit insurance coverage at the network banks. The depositor may exclude banks from eligibility to receive its funds. To meet the conditions for pass-through FDIC deposit insurance, deposit accounts at FDIC-insured banks in IntraFi’s network that hold deposits placed using an IntraFi service are titled, and deposit account records are maintained, in accordance with FDIC regulations for pass-through coverage. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA before settlement for deposits or after settlement for withdrawals or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through an IntraFi service satisfies any restrictions on its deposits.