IntraFi

Last updated
IntraFi
FormerlyPromontory Interfinancial Network
IndustryFinancial services
Founded2002
Headquarters Arlington, Virginia,
U.S.
Key people
Mark Jacobsen (cofounder & CEO)
Website www.intrafi.com

IntraFi, LLC (formerly Promontory Interfinancial Network), is a privately held firm with a network of more than 3,000 financial institutions, three-quarters of all U.S. commercial banks and thrifts as members. [1] Among its members are 23 of 25 top U.S. banks and 95% of all U.S. community banks. The company’s headquarters is in Arlington, Virginia. [2]

Contents

History

The company was founded in 2002 by a number of former federal banking regulators with the goal of increasing the security of large deposits. Bank of New York Mellon (BNY Mellon) provides issuance, custody, settlement, and recordkeeping services for IntraFi. [3] [4] IntraFi has been ranked by the Washington Post as a top workplace in 2018, 2021, 2023 [5] [6] and in American Banker's list of Best Places to Work in Fintech 2018, 2021-2024, including first place in 2018 and 2021. [7] [8] [9] [10]

The co-founder and CEO of the company is Mark Jacobsen, a former chief of staff of the Federal Deposit Insurance Corporation (FDIC) and inventor of 13 patents related to IntraFi's FDIC-insured deposit placement services. [11] [12] The company changed its name to IntraFi Network in 2020. [13]

IntraFi’s participating institutions offer access to millions of dollars in aggregate FDIC insurance across network banks by placing funds in demand deposit accounts, money market deposit accounts, and certificate of deposit (CD) accounts at IntraFi network banks. [14] Its services are anchored in using reciprocal deposits, which the company invented, and are a way for banks to exchange funds depending on their deposit or funding needs, to give depositors access to FDIC insurance above the limit of $250,000 through a single banking relationship. During the 2008 economic crisis, Reuters noted that IntraFi's services "rose in popularity.” [15] “In 2023, IntraFi garnered significant attention after 3 regional bank failures spotlighted the risks of keeping large uninsured deposits at banks.” [16]

In collaboration with the Community Development Bankers Association (CDBA) and National Bankers Association (NBA), in June 2024 IntraFi launched the Advancing Communities Together (ACT) program to boost deposits at banks catering to underserved communities. [17]

Services

IntraFi offers FDIC-insured deposit placement services, including ICS (IntraFi Cash Service), CDARS (Certificate of Deposit Account Registry Service), and IntraFi Sweep (formerly IntraFi Network Deposits). [18]

Built on IntraFi’s technology for reciprocal deposits, these services give depositors a way to access millions of dollars in aggregate FDIC insurance through a single banking relationship. Funds are broken up into core deposits under the FDIC insurance limit of $250,000 either as deposit accounts (via ICS) or CDs (via CDARS), then spread across a network of well-capitalized and well-managed banks. [19]

With IntraFi Sweep, broker-dealers and fintechs automatically transfer, or “sweep,” unused cash balances from customer brokerage accounts to interest-bearing deposit accounts at banks insured by the FDIC and savings associations. The banks may be affiliated or unaffiliated with the broker-dealer, and the banks acquire the cash as wholesale funding. [20]

IntraFi also publishes a quarterly business outlook survey of banks. It also publishes a weekly podcast called “Banking With Interest,” which features lawmakers, regulators, journalists, bank executives, and others in the financial services space. Podcast guests have included Gary Cohn, Mark Cuban, Randal Quarles, Tom Emmer, Michael Hsu, and Esther George. [21]

Related Research Articles

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The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".

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The Certificate of Deposit Account Registry Service (CDARS), was a US for-profit service that broke up large deposits and placed them across a network of more than 3000 banks and savings associations around the United States. This allowed depositors to deal with a single bank that participates in CDARS but avoid having funds above the Federal Deposit Insurance Corporation (FDIC) deposit insurance limits in any one bank.

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<span class="mw-page-title-main">Insured Cash Sweep</span> FDIC service

The Insured Cash Sweep or ICS service is used by banks and savings associations that are insured by the Federal Deposit Insurance Corporation (FDIC). In 2021, the service was reconfigured with several others offered by IntraFi Network into IntraFi Network Deposits and IntraFi Funding.

<span class="mw-page-title-main">Insured Network Deposit</span>

The Insured Network Deposits (IND) service was a deposit sweep service for broker-dealers and other custodians of funds. In 2021, the service was reconfigured with several other services offered by IntraFi Network into IntraFi Network Deposits, and IntraFi Funding.

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References

  1. ↑ "CDBA, NBA launch programme to boost deposits at banks targeting underserved communities". Yahoo Finance. 2024-06-04. Retrieved 2024-09-06.
  2. ↑ "not found". www.aba.com. Retrieved September 6, 2024.
  3. ↑ "Alan Blinder - Princeton University". www.princeton.edu. Retrieved 22 February 2019.
  4. ↑ "Mark P. Jacobsen: Executive Profile & Biography - Businessweek". Bloomberg News . Archived from the original on 2016-03-04. Retrieved 2017-09-08.
  5. ↑ "Top Workplaces 2018". Washington Post. Retrieved 2022-07-03.
  6. ↑ "IND - Promontory Interfinancial Network". Archived from the original on 2015-11-06. Retrieved 2015-11-12.
  7. ↑ "Best Places to Work in Fintech 2022". American Banker. 2022-06-01. Retrieved 2024-09-06.
  8. ↑ .Lauren Young, "Advisers steer clients to safer havens in stormy market," Reuters, August 4, 2011
  9. ↑ "Top Workplaces 2023". The Washington Post . June 16, 2024. Retrieved September 6, 2024.
  10. ↑ "Best Places to Work in Fintech 2024". American Banker. 2024-05-06. Retrieved 2024-09-06.
  11. ↑ "IntraFi LLC," "IntraFi Network LLC - Company Profile and News". www.bloomberg.com. Retrieved 22 February 2019.
  12. ↑ "Chairman Tanoue Announces Appointment of Mark Jacobsen as Chief Of Staff of the Office of the Chairman". FDIC. Retrieved 2023-09-10.
  13. ↑ "Promontory Interfinancial Network changes name". Yahoo! . Retrieved 2024-01-23.[ dead link ]
  14. ↑ "IntraFi Network Deposits: What They Are and How They Work". Investopedia. Retrieved 2024-09-06.
  15. ↑ Lauren Young, "Advisers steer clients to safer havens in stormy market," Reuters, August 4, 2011
  16. ↑ https://www.ft.com/content/5ff8b990-ae08-4cd3-976d-d37a9035d38e |access-date=2024-09-06 |website=www.ft.com}}
  17. ↑ .“Program aims to bridge mission-based banks' deposit gap” (https://livearticles.net/arizent/2505629.html)
  18. ↑ .11. Business 2 "Company Overview of Promontory Interfinancial Network, LLC" Bloomberg (https://w ww.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=45817065)
  19. ↑ “7 best ways to insure excess deposits” (https://www.bankrate.com/banking/savings/ways-to-insure-excess-deposits/#fdic-limits)
  20. ↑ “Research Update: Nexus Buyer LLC Outlook Revised To Positive On Strong Operating Performance; Ratings Affirmed” https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/12903582/
  21. ↑ “Banking With Interest” (https://podcasts.apple.com/us/podcast/banking-with-interest/id1506774121)
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