Federal regulators expect banks to make innovative CRA investments, so MVB Bank in Fairmont, W.Va., elected to try a new program designed to place deposits at Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) in underserved communities. “We are aware that CRA regulations encourage banks to make a variety of different CRA investments,” said MVB Treasurer Eric Tichenor. “So, when we heard about this program, we thought it would be a great way to earn CRA credit while also enhancing a low-income market.” The ACT®, or Advancing Communities Together®, Deposit Program offers banks a secure, efficient way to place funds into CDFI banks and MDI banks and earn CRA credit under the regulation’s investment and community development tests. “The ACT Deposit Program is a promising new tool for community and regional banks to earn CRA credit,” says Brian Blake, chief public policy officer at the Community Development Bankers Association and a former CRA officer. “ACT excels at meeting both the spirit and the letter of the CRA, and I believe it is very competitive compared with more complex, costly, or time-consuming alternatives.” ACT’s minimum deposit is $1 million, and the CDFIs and MDIs in the program pay near-market rates on the funds. ACT deposits remain liquid and are eligible for millions in FDIC insurance across IntraFi® network banks because they are placed through the IntraFi Cash Service®. IntraFi has built a network of more than 3,000 banks, including CDFIs and MDIs, that can help keep funds local and provide much-needed financial access in rural, suburban, and urban communities across the nation. The $3.4-billion-asset MVB used the ACT Deposit Program to place $1 million into Adelphi Bank, an MDI in Columbus, Ohio, for several reasons. “First, the interest rate on the deposit is much better than an alternative we had been evaluating,” Tichenor said. “We also wanted flexibility on the amount invested so the $1-million minimum appealed to us. “And another thing that is attractive about the program is if you need access to the funding for some reason, you can bring the funds back at any time. All these factors were extremely attractive to our bank.” There are no MDIs in MVB’s home state of West Virginia, so it looked to neighboring Ohio to find Adelphi, a relatively new bank serving Franklin County, which includes Columbus. “The deposits we receive under the ACT Deposit Program are fuel for the bank to help the community grow and meet its financing needs,” said Adelphi’s Chairman & CEO Jordan A. Miller, Jr. Opened in May 2023, Adelphi Bank is the reincarnation of a bank chartered in 1921 during the Great Migration of Black people moving north. “We named our bank after a historic bank that created the first Black hospital here, financed a theater that hosted every Jazz great, and helped all those newly arriving workers get credit,” Miller said. “We want to extend that legacy by financing the revitalization that is happening here.” Adelphi’s mission to help the people in its community build wealth is yet another reason MVB decided to make its deposit. “This investment is very visible,” Tichenor said. “It is helping to grow Adelphi and its community. That’s more satisfying than buying another municipal water and sewer bond.” Placing funds through the ACT Deposit Program was easy, Tichenor added, and MVB may increase its deposit in the future. “It was extremely simple and a fast process,” he said. “Adelphi provided all the paperwork, and it was very, very easy. We will consider further deposits.” Asked if other bankers should use the ACT Deposit Program to help bolster their CRA credit, Tichenor did not hesitate. “I would recommend it,” he said. “It’s an opportunity to do something a little different and the regulators are looking for folks to do something new—not the same old, tired thing.” Have Any Questions? Get in Touch. Deposit placement through ICS and the Advancing Communities Together Deposit Program are subject to the terms, conditions, and disclosures in applicable agreements. IntraFi is not an FDIC-insured bank, and deposit insurance covers the failure of an insured bank. A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. CRA Made Easy: Earning Credit While “Doing Good” Via Innovative New Program www.intrafi.com/act-deposit-program │ Diane Ellis │ dellis@intrafi.com By Diane Ellis | Senior Managing Director, IntraFi PAID ADVERTISEMENT
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