ATLANTA-Low-income designated credit unions (LICUs) are being urged to consider a new funding and liquidity option available for balance sheet management as they conduct their 2017 strategic planning.
CU Capital Market Solutions, LLC (CMS) reported LICUs can now receive non-member deposits through a funding program it has developed that it said is specifically designed for maximum ease and utilizes NCUA pass-through insurance regulations.
The CUSO launched the program Aug. 8 when Jefferson Financial Credit Union of Metairie, La., received the first non-member deposit of $5 million.
CMS said it facilitated the deposit through its vast network of institutional investors.
“It marks the first time credit unions have had access to a funding source of this kind,” CEO Lew Lester said in a statement.
Jefferson Financial received the lump sum deposit of $5 million at a cost of 65 basis points, with no additional fees or collateral required, according to the company.
Jefferson Financial CEO Mark Rosa said the deposit was the beginning of what will most likely be $40 million to $50 million in non-member deposits that Jefferson Financial plans to access through the program.
“The credit union industry has long needed this funding ability and now we have it. It’s good for the institution and good for the industry,” Rosa said in a statement.
According to Robert Colvin, president and chief strategist for CU Capital Market Solutions, once the initial account is opened deposits are available to LICUs with a phone call to the CMS funding desk. There are currently no fees to access the program and no long-term commitment, according to the company, which said deposits received can be redeemed at any time with no penalty to the credit. CU Capital Market Solutions recently acquired CNBS, as CUToday.info reported here.