The Fed Wants You…

The Fed Wants You…

The U.S. wants you to buy U.S. Treasuries, much like we all bought Saving Bonds back in the 1940s.

The Fed Wants You…

One theory that is surfacing is that the Fed wants to put Treasuries in the hands of American public entities, Higher Ed institutions, and private corporations rather than with foreign governments.

How is the Fed making this happen? The answer is more Federal regulations! (No surprise there!)

Between the exercise of having banks limit their deposits and the addition of allowing prime money market funds to float their price at Net Asset Value (NAV) rather than holding at $1, there is now a shift to U.S. Treasuries.

One common thread for all public entities is that U.S. Treasuries meet all legal requirements. While states may vary on permissible investments, Treasuries are a constant across all 50 states.

While Treasuries might be safe and liquid, they do hold a level of risk if you should need to sell them before maturity.

So what should one do in managing short-term cash in a portfolio of Treasuries?

The Fed Wants You…

Answer: Employ a liquidity strategy that will match the time horizon of funds against day-to-day cash needs. This is a disciplined approach that takes time but the end result will lead to a much higher yield and more income on low- or non- performing cash.

I expect U.S. Treasuries to become the dominant source of deposit investments over the next two to five years.

Now is the time to be proactive with how you handle your cash flow. Step 1 is designing a liquidity strategy. three+one is the only company in the country that designs such programs for public entities and Higher Ed institutions.

Our data and analyses will help boost the income on your operating and non-operating cash while meeting all legal, safety, and liquidity requirements.

We look forward to helping you make the most of your available cash.


We Hope to See You at Our Upcoming Presentation:

Northeast GFOA Holiday Seminar – December 13th in Troy, NY

Just When You Thought…

I thought we had reached the point at which most of the new banking regulations had been established and the pace of new pages being added to Dodd-Frank might be settling down, but then another set of major headlines hit Main Street concerning consumer banking practices at the big banks.

Just When You Thought...

Last year, I predicted that the pendulum of banking regulations would reach a point of equilibrium after Dodd-Frank reached the 20,000-page mark of new regulations. I figured by that point the authors of the new regulations would be satisfied with their imprint, while consumers and banking institutions would apply pressure against the added costs of doing business in a highly governed environment.

Well, we were just about there—and then the latest shoe dropped.

What can we expect now?

First, more banking regulations, expanded Dodd-Frank reforms, and more restrictions from the Consumer Financial Protection Bureau, created under Dodd-Frank to protect consumers.


Just When You Thought...


Second, the issue of cross-selling internal bank products within a single institution will undergo a major overhaul. The way bankers are credited for sales, management of customer relationships, and compensation will stir up the way they service clients going forward.

Third, expect fewer, if any, introductions by your bankers to internal product partners. This may prove to be confusing or may require multiple banking relationships within a single banking institution.

Finally, expect greater verification of new account openings and/or more paperwork when establishing new services with your bank.

Whatever the case may be, the world of government regulations will surely cause the pendulum to swing to greater extremes.

At three+one, we are independent of all banking and financial institutions. Therefore, if you need to have an assessment or implementation of new banking services, call us. We can help make it an easy and painless process for both you and your banking partner.

Will You Join Me For A Waltz?

The waltz, when in symmetry with two partners, can be a beautiful dance of elegance to watch. The steps are orchestrated in a direction of movement that allows each partner to feel a sense of ease and in step with each other as onlookers watch with pleasure.

Banking, while far older than the waltz, should be just as pleasurable. But in today’s world of more regulations and tougher legal requirements, the ability to partner up and move with ease has become a real challenge.

Will You Join Me For A Waltz?

It may be time to step back and consider the following:

First, find a banking partner that is in step with you. It takes two. Remember that someone needs to take the lead. At times, it may be your turn; at others, it may be your banker’s.

Second, it takes practice. New regulations and technology require time to implement; that requires patience and the need to communicate. When your banker calls, return the phone call. The same is expected of the banker if you initiate the call.

Third, if you are rusty or don’t know where to start, ask for help. Call three+one. We are always available to help you. Between the banks, associations, and other public and Higher Ed entities, there are many resources to tap into for support.

Fourth, you may step on a few toes, but that is expected. If you cannot get in step with your partner, then try to figure out why. Do not assume. If it just doesn’t seem to be the right fit then consider a new partner. Just remember that it takes two, and you’re one of them.

Fifth, don’t forget to have fun, even given the missteps. If you make your banking relationship look easy, others will want to follow, join in, and take your lead.

While the waltz may be an old dance, it provides the basic structure to more complicated dances.

At three+one we work with public entities, Higher Ed institutions, and banks to strengthen banking relationships. Our unique experience in each of these sectors enables us to provide support you may not find anywhere else.

So if you need help, call us. We’re here for you and your bank.

Expensive Pieces of Paper

Did you know the average cost of issuing and awarding a Request for Proposal (RFP) for banking services, using internal resources, is… $45,000?

At that cost, the RFP better be worth it!

Expensive Pieces of Paper

In many instances, that’s not the case. What we tend to find are 2016 banking-services RFPs are often trapped in a 1990s template.

Recently, I reviewed a large national banking RFP that had the same wording of ones I’d seen many years ago. In fact, it was a replica of another such organization’s RFP that had been issued several years before. It lacked color, specifics, and data and was serving as a set up for a price war between banks. The real problem is that very few banks will respond to it. The end result will be a ton of money spent with no significant outcome to warrant the expense.

If you are planning to issue a banking RFP, consider the following:

(1) Conduct a liquidity/ banking analysis first that will assess all your organization’s needs, now and well into the future. The more information you can provide competing banks, the more they have to work with in providing a better response.

(2) Create a new RFP format that is fresh, forward thinking, and flexible, making it clear you will consider new ideas.

(3) Limit responses to fewer words and have more in-person conversations. We’ve found paper is not always the best way to determine the right fit.

(4) Address your cash and lending needs both now and in the future; provide a holistic picture. Given new federal regulations, many banks have not been responding to RFPs due to their lack of interest in holding such deposits.

(5) if you hire a consultant to prepare your RFP, make sure you’re not getting a rehash of some other client’s template. Make them do original brainstorming on your RFP and be accountable for the results.

If you decide to issue a banking-services RFP, do it right or else you will be just sending out expensive sheets of paper that will provide little value to your organization or to the banks you want to compete for your business.

If you don’t know where to start or need a fresh perspective, call us. At three+one, we help entities of all sizes evaluate their needs and determine if a banking RFP is right for them. If you’re interested, we can tailor an RFP document for you that is easy to read, reflects and articulates your needs, and is written to get more responses. Our goal is to make the paper your RFP is printed on an asset and not an unnecessary expense.

We Hope to See You at our Upcoming Presentation:

GFOA of SC – October 16 – 19 (We’ll be presenting twice!)
North Country NY GFOA – October 20th