Opportunity for New Non-Member Deposits


Opportunity for New Non-Member Deposits

Is your credit union current looking for new Non-Member deposits? If so, the CDFI Fund’s Bank Enterprise Award (BEA) Program may be a good resource to help you raise deposits from mission-aligned CDFI banks.

BEA provides incentives for banks and thrifts to increase their year-over-year lending, service and investments in Distressed Communities. But in fact, the activities that receive the highest funding priority under BEA are CDFI Related Activities (defined as CDFI Equity Investments & Equity-Like Loans and CDFI Support).

CDFI Support Activity includes providing assistance to a CDFI in the form of a loan, technical assistance, or deposit. To be eligible, a CDFI credit union must demonstrate that it is Integrally Involved in a Distressed Community as specified by the CDFI Fund. For the FY 2016 BEA funding round, all deposits must be made by December 31, 2015.

In an effort to help its members find new deposits, the National Federation of Community Development Credit Unions is teaming up with the Community Development Bankers Association (CDBA) and CapNexus to match credit unions seeking to receive deposits with CDFI banks seeking to place BEA eligible deposits. CDBA is the national trade association for CDFI banks. CapNexus is an online platform that matches money and partners to community development finance opportunities. It is operated by Partners for the Common Good, a CDFI loan fund and CDBA’s host organization.

Please visit this page on the CapNexus site to sign up to be matched to a CDFI bank:http://capnexus.org/need-deposits. If you do not need deposits but would like to register with CapNexus, you can register here: http://capnexus.org/need-non-member-deposits.

This year is the first time we have worked with CDBA to match CDFI banks and CDFI credit unions. We will be looking for your feedback on how the system works and how to improve it for the future.

See below for more information regarding BEA deposits. If you have further questions please contact Dana Weinstein at weinsteind@pcgloanfund.org or 202-689-8935 ext. 225.

What Types of Certificates of Deposit Qualify Under BEA?

From the current year (2015) BEA Notice Of Funds Availability :

Certificates of Deposit: Section 1806.103(q) of the Interim Rule states that any certificate of deposit (CD) placed by an Applicant or its Subsidiary in a CDFI Partner that is a bank, thrift, or credit union must be:

(i) Uninsured and committed for at least three years; or

(ii) Insured, committed for a term of at least three years, and provided at an interest rate that is materially below market rates, in the determination of the CDFI Fund.

For purposes of this NOFA, ”materially below market interest rate” is defined as an annual percentage rate that does not exceed the yields on Treasury securities at constant maturity as interpolated by Treasury from the daily yield curve and available on the Treasury Web site at:

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

For purposes of this NOFA, a deposit placed by an Applicant directly with a CDFI Partner that participates in a deposit network or service may be treated as eligible under this NOFA if it otherwise meets the criteria for deposits in 1806.103(q) and the CDFI Partner retains the full amount of the initial deposit or an amount equivalent to the full amount of the initial deposit through a deposit network exchange transaction.

What are the Reporting Requirements?

Credit unions participating in this program will have to certify that they are Integrally Involved in a Distressed Community at the time of the BEA application submission. (Please see the NOFA for definitions of “Integrally Involved” and “Distressed Community”). There are no ongoing reporting requirements after the initial application.

Where Can I Get More Information on the BEA Program?

 The BEA Program Regulations outline the requirements of the program and can be found at:

https://www.cdfifund.gov/docs/2015/BEA/BEA%20Program%20-%20Revised%20Regulations%20(12%20CFR%20Part%201806).pdf

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