And an insured depository institution does not have to be a member of the Promontory Network to use Promontory's Prepaid Assessment Marketplace^SM – a free service designed to help banks buy or sell FDIC prepaid assessments.

CDARS^® (or the Certificate of Deposit Account Registry Service^®)

Promontory's flagship service, CDARS^®, enables Network members to offer each of their customers access to multi-million-dollar FDIC insurance coverage, and to keep the full amount of those deposits on balance sheet or to sell the funding for fee income. (Of note, as of 3/31/2010, CDARS holdings average $1.6 million per customer with reinvestment rates averaging approximately 80 percent.) In addition to using CDARS to attract deposits, Promontory Network members can use the service to purchase wholesale funds at favorable rates. 

CDARS is a versatile funding tool that can help financial institutions to:

• Attract profitable, loyal relationships by offering customers access to multi-million-dollar FDIC insurance on their CD investments
• Keep the full amount of deposits on balance sheet (replacing higher cost funding), or sell the excess for fee income
• Tap cost effective, fixed- or floating-rate funding for short or long terms
• Reduce collateralization costs

As a deposit-gathering tool, CDARS provides each Promontory Network member with the opportunity to meet all of its customers' needs. Using CDARS, customers can access:

• Safety – Deposits are eligible for multi-million-dollar FDIC insurance coverage.

• Convenience – With CDARS, customers manage one bank relationship, earn one rate per maturity, and receive one regular account statement, eliminating the need for multiple rate negotiations and manual consolidation of account statements. By providing access to multi-million-dollar FDIC insurance, CDARS can also eliminate the need for private insurance or ongoing collateralization – so customers can say "goodbye" to tracking changing collateral values on a recurring basis. (And, by providing access to insurance coverage for deposit amounts that, if uninsured, would require collateral or surety bonds, CDARS also provides financial institutions with greater flexibility to manage their investment portfolios while decreasing their administrative tracking burdens.) Customers can also benefit from receiving only one 1099 at year-end.

• Rate – Customers earn CD-level returns. Depending on a bank's offering, these rates may compare favorably with other investment alternatives, including Treasuries, repo accounts, and money market funds.

• Community Investment – With certain transactions, the full value of a customer's deposit can support lending opportunities that strengthen the local community. That fact can be an important selling point for some depositors.

When a bank places a customer's deposit using the CDARS service, the deposit is broken into amounts under the standard FDIC insurance maximum ($250,000) and placed with other members of the Network, making the full amount eligible for FDIC insurance coverage. In return, the originating bank receives either matching deposits or fee income. This choice provides banks with a flexible balance sheet management tool, regardless of the individual institution's liquidity position. Note: Each originating bank sets the interest rate it offers and maintains complete ownership of its customer relationships. Funds can be placed through different types of transactions. Learn more about CDARS Reciprocal transactions.  Learn more about CDARS^® One-Way Sell^SM transactions.

To learn more about CDARS, please visit www.promnetwork.com or contact Promontory directly at (866) 776-6426, ext. 3445 (select option 4) or contactus@promnetwork.com.