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    CDARS® Frequently Asked Questions

    How is CDARS pronounced?

    CDARS is pronounced “cedars.”

    How can CDARS make funds eligible for FDIC insurance in excess of the standard maximum deposit insurance amount?

    Financial institutions that offer CDARS, the Certificate of Deposit Account Registry Service®, are members of the Promontory Network. The FDIC insurance coverage available through CDARS is provided by the Promontory Network members that issue your customers’ CDs. The customer funds are placed into certificate of deposit accounts (CDs) at Network banks, each in an amount less than the standard FDIC insurance maximum of $250,000. Working directly with just one relationship institution, a customer can access FDIC insurance coverage from many. 

    Is the CDARS service safe to use? Has it been thoroughly tested?

    The CDARS service has been thoroughly tested (with many billions of dollars) and has been designed so as to comply with every relevant FDIC requirement. Since its inception, thousands of depositors have successfully submitted funds for placement through CDARS. Use of the CDARS service makes it possible for deposits to become eligible for multiple millions of dollars of FDIC insurance on funds that are in CDs. And, no depositor has ever lost a penny of FDIC-insured deposits. The service is offered by Promontory Interfinancial Network, a trusted fintech provider chosen by more than 3,000 financial institutions across the nation, and has received an exclusive endorsement from the American Bankers Association (ABA), following a comprehensive due-diligence review process. Banks interested in obtaining a copy of the ABA’s CDARS Due Diligence report can request one.

    How much can my institution place for a single depositor right away?

    CDARS enables financial institutions to offer access to multiple millions of dollars of FDIC protection. Overall customer and bank limits apply, as do weekly sublimits (although, with notice, higher amounts can often be accommodated). To talk specifics, please contact Promontory Interfinancial Network's Treasury Desk at (866) 776-6426 (Option 1, then Option 3). Network members can get the current limits by visiting the secure Transaction & Reporting Portal's Limits and Product Terms.

    Does CDARS offer a wide range of maturity options and do CDARS customers have the ability to ladder or to structure the equivalent of floating-rate, bump-up, or step-up CDs?

    Yes. CDARS offers seven term choices: 4 week, 13-week, 26-week, 1-year, 2-year, 3-year, and 5-year.1 Depositors can also ladder CD maturities and structure the equivalent of odd-term CDs, and floating-rate, bump-up, or step-up CDs with a CDARS Resubmission Agreement.2 Resubmission Agreements provide for the reinvestment of funds at maturity at specified rates and terms to which a Promontory Network bank and the customer agree before the first placement. As a result, they greatly expand the range of choices the bank is able to offer.

    Are reciprocal deposits received by a bank using CDARS considered to be brokered deposits?

    The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May 2018, provides that most reciprocal deposits are no longer treated as brokered deposits. Under the law, for a well-capitalized bank with a CAMELS rating of 1 or 2, reciprocal deposits up to the lesser of $5 billion or 20% of the bank’s total liabilities are not considered brokered. (Reciprocal deposits over these amounts are allowed, but are treated as brokered.) Now that most reciprocal deposits are nonbrokered, many banks are increasing their use since reciprocal deposits are typically a cost-effective way to grow funding, especially compared to collateralized deposits and wholesale funding. Find out what some bankers are saying about their experience with reciprocal deposits.

    Does the FIL-29-2010 that was issued by the FDIC on June 7, 2010 address CDARS?

    We are not a “third-party affinity group" or "trade association” referenced in the letter. However, the letter more broadly discusses principles that apply to the placement of deposits. We have always operated CDARS in accordance with the principles outlined in the letter and will continue to do so.

    Can I speak to a Promontory Network member about their experience using the CDARS service?

    Several members of the Promontory Network would be happy to talk with you about how CDARS has created positive results for their institutions. Call Promontory Interfinancial Network's Treasury Desk at (866) 776-6426 (Option 1, then Option 3) for information on Network member experiences, or get an overall snapshot of how institutions that offer CDARS are benefiting from the service by visiting the Testimonials page.

    Whom should I contact to learn about joining the Promontory Network?

    It is easy to become a member of the Promontory Network. When your institution becomes a Network member, it can offer CDARS and enjoy other member benefits. To learn more, talk to us today. Call (866) 776-6426 (Option 1, then Option 3) Monday-Friday 8:30 AM - 6:30 PM ET or email with your relevant contact details so we can follow up, and we will help you get started. It's that simple.

    Does Promontory Interfinancial Network provide support after my financial institution joins the Promontory Network?

    Yes. Promontory Interfinancial Network provides implementation and operational support to all Promontory Network members. A business development team, which includes a Regional Director and a Treasury Desk Manager, is assigned to every Promontory Network member institution to assist with its sales and marketing activities. A Client Services team is available for operational assistance and troubleshooting. Additionally, Promontory Interfinancial Network provides accounting training, support webinars, and an online Marketing Resource Center that houses getting-started guides and both customizable and turnkey marketing materials.

    In general, institutions that have joined the Promontory Network have been very satisfied with their experiences. Promontory Interfinancial Network recently conducted a survey with assistance from an independent research firm. Among its many extremely positive findings, the research firm indicated that 100% of respondents were satisfied with their CDARS experience. Read more about Promontory Network member experiences in the What Others Say or Testimonials sections.

    [1] Five-year maturity placement is currently available only through certain types of CDARS transactions. However, with CDARS Reciprocal transactions, you can place funds for a 52-week term and enter into a Resubmission Agreement that provides for resubmission for four additional 52-week terms (or other combinations). [2] All placements, including placements under Resubmission Agreements, are subject to the terms and conditions set forth in the applicable CDARS agreements. A Resubmission Agreement is not identical to a single placement. As with any CDARS placement, a resubmitted placement is not guaranteed, and unallocated funds will be returned to the depositor. If, at the time for resubmission specified in a Resubmission Agreement, the relationship institution is no longer authorized to submit orders using CDARS, then the resubmission will not occur. The depositor, prior to resubmission, can withdraw the depositor’s authorization to the relationship institution to resubmit the funds. If so, the Resubmission Agreement can provide that the relationship institution, in such circumstances, may impose an appropriate penalty, not unlike an early withdrawal penalty. Use of the CDARS service is subject to the terms, conditions, and disclosures set forth in the applicable program agreements, including the CDARS-ICS Participating Institution Agreement and applicable Deposit Placement Agreement. Limits apply. If a depositor is subject to restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through CDARS or a particular CDARS transaction, satisfies those restrictions. CDARS and Certificate of Deposit Account Registry Service are registered service marks of Promontory Interfinancial Network, LLC.