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Sweeping money

Top Three Features to Look for in a Retail Sweep Program

Recently, my colleague discussed the top features to look for in a branch cash management software solution. This week, I want to discuss the features you should look for in a retail sweep program, also known as Deposit Reclassification. Retail sweep programs help banks and credit unions recover their Federal Reserve balances due to reserve requirements, through reclassifying transaction accounts as savings accounts. In today’s rising rate environment, reclaiming low earning funds allows an inst...

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Topics: Deposit Reclassification

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The History of Deposit Reclassification

Deposit Reclassification has existed since the early 90s, but most people don't know the story behind the process that has helped financial institutions reclaim billions of illiquid assets to reinvest in their local markets. Here is the story behind this vital solution. During his time at KPMG as a National Partner in charge of Revenue Enhancement Consulting Services, Nicholas Ceto, Jr. worked with nearly every major bank in the country. Unfortunately, after more than 18 years at KPMG, Ceto reti...

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Topics: Deposit Reclassification

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Why Deposit Reclassification is Important to Financial Institutions

A financial institution’s main goal, like most businesses, is to increase efficiency and profitability, and one of those ways is to minimize non-interest bearing and low-earning assets. A large low-earning asset for most institutions is its Federal Reserve balance due to Reserve Requirements. Deposit Reclassification is important to community banks and credit unions, especially in a rising interest rate market, because it allows you to reclaim your Federal Reserve balance, and invest that money ...

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Topics: Deposit Reclassification, Federal Reserve Balance, Retail Sweep Program

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When Should I Implement Deposit Reclassification?

  Deposit Reclassification, commonly called a retail sweep program, helps banks and credit unions reduce and even eliminate reserve balances; allowing them to deploy the freed-up funds for profitable lending and investment purposes. A bank or credit union’s motivation to implement deposit reclassification depends on costs versus benefits. Implementing Deposit Reclassification makes sense at all times, but is even more important when interest rates are rising and expected to continue to rise, whe...

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Topics: Deposit Reclassification, Federal Reserve Balance

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Deposit Reclassification vs. other Retail Sweep Programs

 A Comparison of Deposit Reclassification and the core providers’ Retail Sweep Programs Deposit Reclassification, commonly referred to as retail sweep programs, help banks and credit unions recover their Federal Reserve balances due to reserve requirements and quickly improve profitability. These programs reduce reserve requirements to the point where in most cases, they can be met with vault cash alone, without parking funds at the Fed. Financial Institutions can then invest these freed-up fund...

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Topics: Deposit Reclassification, Retail Sweep Program

Top 3 FAQ on Deposit Reclassification

Although it’s an established process, many financial institutions (FIs) have questions about Deposit Reclassification (AKA, retail sweep programs). Even though the program was permitted by the Federal Reserve in 1994; when most hear of Deposit Reclassification or retail sweep programs - it seems too good to be true. Our family of companies has pioneered Deposit Reclassification and forged the way for this process to be a tried and true solution for banks and credit unions. To clear up some commo...

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Topics: Deposit Reclassification

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Working Together - Regulation D and Deposit Reclassification

Deposit Reclassification, also known as a retail sweep program, allows financial institutions to reduce their Federal Reserve Bank reserve requirement. The Federal Reserve’s 12 CFR 204 Regulation D sets out uniform requirements for all depository institutions’ reserve balances - either as vault cash or as funds held with their local Federal Reserve Bank. Retail sweep programs reduce reserve requirements, which Regulation D sets out for financial institutions to observe. How do these two opposing...

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Topics: Deposit Reclassification, Regulations, Federal Reserve Balance

Recover Your Federal Reserve Balance and Improve Profitability within 60 days... Here's How!

Depository institutions, such as banks and credit unions, can significantly reduce their reserve requirements and eliminate balances held at the Federal Reserve Bank by implementing retail sweep (aka Deposit Reclassification) programs. Freed-up balances can then be used to boost lending and increase profits. It is best for depository institutions to implement a tried and true retail sweep solution because their sweep percentages optimize non-reservable balances and maximize earnings potential.

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Topics: Profitability, Federal Reserve, Deposit Reclassification, Vault Cash