Investment Services FAQ

SimpliCD Related Questions:

What is SimpliCD?
  • SimpliCD (“simplicity”) is a certificate of deposit program that enables credit unions to easily invest substantial funds in federally insured CDs or to generate liquidity quickly by issuing CDs to a nationwide market of potential investors. This turnkey program combines CD investing and issuing with the advantages of competitive rates and consolidated reporting.
How does it work?
  • Each day, SimpliCD searches its nationwide network of issuers for the best rates on federally insured jumbo CDs.
  • You’ll be shown rates for CDs in terms ranging from six months to five years, and in amounts ranging from $99,000 to $20 million.
  • Placements are made by purchasing multiple CDs in amounts between $99,000 and $250,000 at separately insured issuers. A detailed tracking system assures that we place no more than the Standard Maximum Deposit Insurance Amount of principal in any single financial institution within the SimpliCD program.
  • SimpliCD purchases the CDs in a custodial capacity on your behalf, passing all federal insurance benefits through to you. You remain the legal owner of the CDs. All custody and settlement functions are included in the program at no additional cost.
How does settlement and reporting work?
  • SimpliCD tracks, monitors and collects all of your earnings. You'll receive a single consolidated monthly interest payment for all of your SimpliCD investments that received interest that month.
  • SimpliCD provides you with one monthly statement that details your entire SimpliCD portfolio.
Are the SimpliCD purchases considered negotiable certificates of deposit?
  • The answer to this question depends on the type of CD purchased. Depository Trust Company CDs purchased through SimpliCD are negotiable CDs. However, regular SimpliCDs are placed directly to issuers with Primary Financial acting as the administrator; these CDs are non-negotiable.
Can Credit Unions use SimpliCD as a liquidity source?
  • Yes. Recognizing the critical need for credit unions to have a sound policy and process for managing liquidity risk, the NCUA adopted Regulation 741.12 that requires federally insured credit unions to take specific steps to ensure appropriate risk management and access to liquidity. SimpliCD Issuance provides a primary source for liquidity by attracting deposits from other credit unions who wish to invest in NCUA insured instruments. SimpliCD has helped credit unions attract funds at very competitive rates, while maintaining the convenience of working with a trusted partner. If and when you’re seeking deposits, contact Corporate Central Credit Union. Using market analysis, our partners at Primary Financial will help you set a rate to attract the deposits you need. Then Primary Financial will publish your offering to a nationwide network of credit unions through their extensive network of investors. Moreover, Primary Financial will act as custodian on your behalf and can set up one large consolidated certificate issue instead of you having to set up multiple smaller share certificates. If your credit union is interested in adding SimpliCD Issuance as a liquidity source or if you are looking to attract deposits, contact Corporate Central Credit Union.

Line of Credit Related Questions:

Is a line of credit that my credit union receives from Corporate Central Credit Union a "Committed" line or an "Advised" line of credit? What are the differences?
  • Corporate Central Credit Union provides members with an advised line of credit.
    Advised lines do not provide guaranteed funding, but they are much more flexible. While the funding is not guaranteed, throughout its history, Corporate Central Credit Union has never failed to provide a liquidity advance under an advised line of credit. In addition, term funding is available to members through their advised line of credit.
    Committed lines provide guaranteed funding as long as the member is not in default, and they also require the issuer to maintain reserves, charge significant fees, and maintain strict lending covenants and events of default. At this time, Corporate Central Credit Union does not offer committed lines of credit. If you have any questions, please contact the Investment Department.
How do we test our line of credit with Corporate Central Credit Union?
  • Draw your settlement account negative. This can be done either through a transfer of funds into another account or through settlement activity. Corporate Central Credit Union will advance you the funds needed to maintain a positive balance in your settlement account. Interest will only accrue on loan advances held overnight.
Emergency Liquidity & Planning

NCUA final rule 12 CFR Part 741.12 requires all federally insured credit unions to plan for unexpected liquidity demands. The rule outlines the requirements for credit unions based on assets across three tiers.

  • Under $50 million – Credit unions must maintain a basic written policy that provides a credit union board-approved framework for managing liquidity and a list of contingent liquidity sources that can be employed under adverse circumstances.
  • $50 million or more – In addition to a board approved written liquidity policy, credit unions with assets of $50 million or more must have a written Contingency Funding Plan (CFP) commensurate with its complexity, risk profile, and scope of operations that sets out strategies for addressing liquidity shortfalls in emergency situations. The CFP may be a separate policy or may be incorporated into an existing policy such as an asset/liability policy, a funds management policy, or a business continuity policy.
  • $250 million or more – In addition to a written liquidity policy and CFP, credit unions in this asset group must establish access to at least one contingent federal liquidity source: The Federal Reserve Discount Window, the NCUA’s Central Liquidity Facility or both.
How can Corporate Central help?
  • Discount Window Access – Full members of Corporate Central Credit Union gain convenient access to the Federal Reserve Bank’s Discount Window without having to establish an account relationship with the Fed.
  • Central Liquidity Facility – Credit unions must deposit capital with the Central Liquidity Facility (CLF) to become CLF members. Once membership is established, Corporate Central Credit Union, as CLF administrator, can assist with applications, collateral placement and sharing, and transactional duties. All CLF loan decisions are made by the CLF.

How do I test Discount Window access?

  • Contact your Federal Reserve Bank. Also contact the investment department at Corporate Central Credit Union to advise them that you are planning on testing your Discount Window access.
Federal Reserve Bank - District Toll-Free Discount Window Number
Atlanta - 6 (888) 500-7390
Boston - 1 (800) 716-3773
Chicago - 7 (800) 380-3762
Cleveland - 4 (888) 719-4636
Dallas - 4 (877) 682-3256
Kansas City - 10 (800) 333-2987
Minneapolis - 9 (877) 837-8815
New York - 2 (866) 226-5619
Philadelphia - 3 (800) 372-2011
Richmond - 5 (800) 526-2036
San Francisco - 12 (866) 974-7475
St. Louis - 8 (866)666-8316

 

Requests for loans must be made by authorized individuals per the borrowing resolution of the depository institution. Information about legal documentation required to borrow from the Discount Window is available on this website at http://www.frbdiscountwindow.org/agreements.cfm or from the Reserve Banks. All Discount Window loans must be secured to the satisfaction of the Reserve Bank.

Institutions may request a loan at any time during the business day. Normally, loans are posted to borrowers’ (or their correspondents’) accounts at the close of Fedwire (usually 6:30 pm ET) on the day the advance is approved by the Reserve Bank.

Reserve Banks may approve requests for earlier availability. Discount Window credit is extended for 24 hours, or multiples thereof. The repayment will be booked at the same time of day that the funds were made available to the borrower.

What is an irrevocable standby letter of credit and why would a credit union need it?
  • Corporate Central Credit Union offers irrevocable standby letters of credit (LOCs) to Full Members that can be used to secure public unit deposits that exceed the $250,000 covered by NCUA insurance. Municipal clients can provide a valuable deposit business but often require supplemental protection for balances not insured by the NCUA. LOCs can be used by Full Members to collateralize a public entity’s deposits. Members can use a standby LOC to collateralize deposits from many public entities including:
    • Local government: city, county, township;
    • State government and state agencies;
    • Transportation authorities;
    • Housing authorities;
    • Water reclamation districts; and
    • Public school districts and community colleges.

Please contact Corporate Central Credit Union’s investment department for additional information, forms and fee structure.

Account Questions:

What are the differences between the Plateau and Premier Settlement accounts?
  • The Plateau Account is a variable rate account that combines settlement and cash management services. Depending on your cash position at the end of the day, your Plateau Account will either pay a dividend on a positive balance or advance a loan on a negative balance. Users can review detailed activity reports and advance settlement loans automatically. Also, dividends increase as deposits increase. As balances grow and the next plateau level is attained, the higher plateau rate is paid on the entire balance.
  • The Premier Investment Suite is a self-directed, self-managed package of services that gives you the opportunity to allocate funds between settlement, investment and loan accounts to maximize returns. You have easy access to excellent overnight rates and the lowest overnight loan rates Corporate Central Credit Union has to offer. Detailed statements of settlement activity are available online, and Member Services can be reached during business hours if you have any questions. Dividends and interest charges are calculated on an actual (365-day) basis for all services within the Premier Investment Suite and are posted or billed to the Premier Settlement Account.
  • The Premier Settlement Account is the transactional account for all daily settlement activities of the Premier Investment Suite. Dividends are lower than other overnight investment alternatives with Corporate Central Credit Union. Funds can be transferred to alternative investment accounts until 3:00pm CT each business day. Funds are moved by authorized personnel at your credit union, or you can call Member Services to request a transfer. Dividends on all investments and interest payments for all loans are settled in and from this account.
  • The Premier Investment Account offers you higher earning potential for overnight funds with few restrictions. The Premier Investment Account pays higher dividends on larger deposits giving you the capability to invest more and earn more. Funds must be transferred into this account by 3:00pm CT to earn the dividend overnight.
  • A Managed Loan is a self-advanced loan used to fund the Premier Settlement Account if drawn negative. The loan must be paid off manually by authorized personnel at the credit union. Interest is due upon payment of the loan. The Managed Loan offers the lowest overnight loan rates offered by Corporate Central Credit Union.
  • Automatic Loan When a Premier Settlement Account is negative and a Managed Loan is not advanced by the credit union, an Automatic Loan will be utilized to cover the shortfall. The Automatic Loan must be paid off manually by the credit union and interest is due upon payment of the loan. Overnight rates are higher for Automatic Loan advances.
Does Corporate Central Credit Union offer any other short term investment accounts?
  • The PLUS Account is a floating rate investment account that can adjust daily. It offers enhanced short-term yields while maintaining flexibility. Minimum investment is $500,000 and withdrawals are limited to four per month. Excess withdrawals are subject to penalty. The PLUS Account can be used to enhance yields over the weekend as it offers higher yields than the Plateau Account.
  • The Money Market Account is an account that requires a minimum of $2 million in order to earn a dividend. Dividends will progressively increase depending on the amount deposited. There are no limits on the number of deposits; however, withdrawals are limited to three per month. Excess withdrawals will be subject to penalty. The Money Market Account offers higher yields on liquid funds. Deposits have no minimum duration. As an added benefit, the Money Market Account offers tiered rates; giving members the capability to invest and earn more. Dividend rate: The dividend rate is a tiered structure. The dividend rate earned each day will be the balance weighted average of that day’s tiered rates. Rates will be published by approximately 3:00pm CT each business day. The dividend rate for a non-business day is the same as the previous business day.

Capital Related Questions:

What happens to the capital investments when credit unions merge and both credit unions have capital with Corporate Central Credit Union?
  • In the case of a merger between two member credit unions, the capital investments are combined into the account of the surviving member. If minimum capital requirements for membership are met for the combined entity, the credit union could attempt to sell excess perpetual contributed capital to another credit union, or place excess non-perpetual capital accounts on a five year notice.
Is my money safe at Corporate Central?
  • A Corporate Central Credit Union is a member-owned, member-controlled, not-for-profit cooperative financial institution formed to serve other credit unions (also referred to as natural person credit unions). Member ownership and control are what make credit unions and corporate credit unions unique. Congress established the National Credit Union Share Insurance Fund (Fund) within the NCUA to insure the shares of all federal credit unions and participating state credit unions. The Fund is backed by the full faith and credit of the U. S. Government. NCUA insures member deposits up to $250,000 in a federally insured credit union but many of our members purchase financial instruments of several million dollars.
  • Although much has transpired within the financial sector the last few years, the strength and stability of Corporate Central Credit Union has not changed. Our capital ratios are the strongest in the nation, and we remain well above all NCUA regulatory capital requirements. Our members’ capital remains fully intact and we continue to pay top dividend rates on our capital accounts.

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Contact Details

    6262 South Lowell Place, Muskego, WI 53150
    (800) 242-4747
    (414) 427-3700