So why do we keep hearing about “surge” deposits and how important it is to know if you’re holding any? Well, it might be because in the past 10 years, CD balances in FDIC insured institutions have fallen by $880 Billion; yes, that’s Billion with a capital “B.” And while that may be the bad news, the good news is that over the same time period, non-maturity deposits (DDAs, NOWs, Savings, and MMDAs) have grown by $5.9 Trillion (with a capital “T”).
The October 2017 issue of ICBA Independent Banker features Dave Wicklund and his views on selecting a service provider for outsourcing your IRR analysis. You can find the article on page 57.
In the last 5-10 years, there's been a lot of growth in DDA, NOW, MMDA, and savings accounts. These deposits can provide a great low-cost funding base, but they can also draw attention at your next exam.
Examiners are looking closely at these surge deposit balances. Specifically, they're looking to see if you've considered surge deposits in 3 ways.
In its Semiannual Risk Perspective, the OCC said strategic risk remains high as banks consider business model changes and face revenue challenges.