Fintech
Curql Invests in Financial Technology to Serve High Net Worth Depositors
A press release on Wednesday from Curql of Des Moines, Iowasaid its investment in ModernFi, a New York fintech, was its first through its Curql Fund II. Italian:TechCrunch.com A tech news website reported in January that ModernFi had raised $23 million in funding.
The NCUA and FDIC insure up to $250,000 per depositor. For larger depositors, ModernFi offers a back-office process that allows a credit union to extend NCUA coverage beyond the $250,000 limit through a reciprocal network of other credit unions.
For example, a credit union with a $1 million depositor sends $250,000 each to three credit unions, where the funds are insured by the NCUA, with the three banks sending matching amounts back to the original credit union to eliminate any impact on the size of the balance sheet.
The service became even more important following the failure of San Francisco-based Silicon Valley Bank in March 2023, following a run on the bank by individuals and businesses with deposits above the insurable threshold of $250,000.
Curql said ModernFi’s expanded insurance program allows credit unions to grow and maintain their deposit base from “corporations, high-net-worth individuals, nonprofits and public funds.”
Nick Evens, president and CEO of Curql, said that reciprocal networks have long been used by banks.
“It levels the playing field for credit unions,” Evens said. “ModernFi is not only building the first full-service depository network for the entire credit union industry, but it is also dramatically expanding the audience of potential business members and consumers that credit unions can serve.”
Nick Evens
“This allows them to compete more effectively with larger financial institutions, which is exactly why credit unions are prioritizing deposit growth and why Curql has chosen to invest,” he said.
Curql said credit unions can also use the network to manage their balance sheets, raising funding on demand or eliminating excess liquidity.