logicpath Blog | Whoknew | Deposit Reclassification

Top FAQ on Deposit Reclassification - Part 2

Jan 10, 2019 | Teresa Romero

In our blog, “Top 3 FAQ on Deposit Reclassification,” my colleague covered frequently asked questions regarding logicpath’s retail sweep program, Deposit Reclassification; including the legality of the program, client impact, and what sub-accounting means, but let’s discuss some more common questions I get about Deposit Reclassification. In this blog, I’ll discuss what threshold percentages are, as well as how Deposit Reclassification impacts call reporting and peer-to-peer review.

Topics: Deposit Reclassification

What is the Impact of Disclosure with Deposit Reclassification?

Dec 20, 2018 | Shawn Harrington

Most financial institutions’ terms and conditions require notification to current customers about any changes to their account, including the reclassifying of funds into savings and checking sub-accounts, also known as Deposit Reclassification.

Topics: Deposit Reclassification

Top Three Features to Look for in a Retail Sweep Program

Nov 29, 2018 | Meghan Quinlin

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...

Topics: Deposit Reclassification

The History of Deposit Reclassification

Aug 9, 2018 | Kelly MacConnell

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...

Topics: Deposit Reclassification

Why Deposit Reclassification is Important to Financial Institutions

Aug 2, 2018 | Shawn Harrington

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 ...

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

When Should I Implement Deposit Reclassification?

Mar 29, 2018 | Meghan Quinlin

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...

Topics: Deposit Reclassification, Federal Reserve Balance

Deposit Reclassification vs. other Retail Sweep Programs

Mar 22, 2018 | Kelly MacConnell

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...

Topics: Deposit Reclassification, Retail Sweep Program

Top 3 FAQ on Deposit Reclassification

Sep 21, 2017 | Teresa Romero

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...

Topics: Deposit Reclassification

Working Together - Regulation D and Deposit Reclassification

Sep 7, 2017 | Kelly MacConnell

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...

Topics: Deposit Reclassification, Regulations, Federal Reserve Balance

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

Aug 24, 2017 | Kelly MacConnell

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.

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