See Public Fund ICS and CDARS Deposits by State: Infographic

By Steve Kinner

Public_Funds Across the United States, local and state governmental entities use Promontory Interfinancial Network’s reciprocal deposit services to access multi-million-dollar FDIC insurance through a single banking relationship. In this way, they are able to safeguard taxpayer money, keep funds local, and eliminate the burden of ongoing collateral tracking.  

Because of shifting factors in the banking industry, public fund deposits are becoming more available to community banks. Now is a time when many government finance officers are considering shifting investments out of money market funds into bank deposits. It is also a time when many of the nation’s largest banks do not want public fund deposits, as new regulations raise the cost of public unit deposits to large banks (but not to smaller and mid-sized banks).  

Increased availability of public deposits, reduced price competition for these funds from large banks, and fewer alternatives for government finance officers may provide an opportunity to community banks, particularly those who offer CDARS® and ICS® to their public fund customers.
And here is more good news — today, 49 states have laws that enable governmental entities to protect deposits through CDARS, and 47 states have laws enabling Insured Cash Sweep®, or ICS.

Check out the infographic below to see information on the amount of balances placed through CDARS and ICS for public unit depositors in various states: