by
Catalyst Corporate | May 08, 2023
Catalyst Corporate has been helping credit unions of all sizes raise liquidity for more than 25 years through SimpliCD. By issuing nonmember deposits, credit unions can raise liquidity levels. SimpliCD makes the entire process simple, from issuing to paying your final settlement.
SimpliCD programs
SimpliCD offers two issuance programs, the Custodial program and Depository Trust Company (DTC) certificates. Each program offers distinct advantages, depending on the credit union’s funding objectives.
If your credit union needs to bring in a sizeable deposit, is low income designated, or is simply interested in reaching a larger group of investors, SimpliCD can help you take advantage of the much larger DTC market, where you can access an expanded group of investors. Especially when liquidity is tight, this can be a strategic option to increase liquidity levels.
Understanding the difference between the SimpliCD Custodial program vs. DTC certificates
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In-network Custodial
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DTC
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Same day settlement available.
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Needs to settle at least a week in advance.
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Interest can be automatically pulled from your settlement account.
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Interest payments initiated via wire transfer to DTC.
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Access to 3,500 credit union investors.
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Access to public funds, other institutional investors, and all U.S. credit unions.
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Although certificates are meant to be held to maturity, investors may inquire about early withdrawal due to mergers or liquidity.
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No early withdrawal. If an investor needs out of a certificate, it is resold in the secondary market.
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May issue in any amounts.
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Issuance amount varies by term.
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One time, one page agreement required. Then an offer may be initiated with a phone call or email.
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One time brokerage agreement and one time DTC letter of representation required. Then a terms agreement must be signed by each party.
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Which SimpliCD program is right for you?
The Custodial program, unique to SimpliCD, offers many benefits that make issuing certificates simple. Credit unions may want to issue via the Custodial program in the future – and some may even need to for regulatory reasons.
When liquidity is tight, however, having a DTC option is important for flexibility. DTC certificates can give you the access to investors if you need to issue certificates right now. Although use of the DTC program is often believed to be limited to low-income designated credit unions, some special circumstances may allow additional credit unions to access the DTC market.
Could your credit union benefit from issuing SimpliCD DTC certificates? Contact the Catalyst Corporate Investment Team to learn more about the program.