In 2024, Corporate One made a strategic investment in ModernFi, a newly formed credit union service organization (CUSO) that provides a crucial tool previously missing in the credit union industry. As the first deposit network specifically designed for credit unions, ModernFi’s financial infrastructure helps credit unions provide extended NCUA insurance to attract and retain large-value members such as businesses, municipalities, non-profits, higher-net-worth individuals, and others. 

We hope you’ll take the opportunity to see what reciprocal deposit strategy looks like in practice in our brand-new webinar next month: “Growing Deposits in 2026: How Credit Unions Are Using ModernFi CUSO to Strengthen Liquidity and Balance Sheet Strategy.” This webinar on September 10 will feature a live panel discussion with credit unions putting reciprocal deposits into action through this CUSO. 

In the meantime, enjoy this Q&A with ModernFi’s Head of Strategic Partnerships Tony Karalekas to learn more about the CUSO.  

ModernFi CUSO describes itself as the first deposit network built for credit unions. What makes that distinction significant? Was there an industry challenge or market gap ModernFi was created to solve? 

Two things make it significant, and one of them is very recent. The first is structural. Reciprocal deposits had been foundational infrastructure on the bank side for two decades. Credit unions had no equivalent, so any member whose balance exceeded $250,000 either split their money across institutions or moved it to a bank that could solve it in one account. Credit unions were losing relationships they had earned over a piece of plumbing they couldn't access. 

The second is regulatory. In March 2026, the NCUA published its Brokered and Reciprocal Deposits FAQ and acknowledged for the first time that reciprocal deposits are permissible for federally insured credit unions, provided the program is run safely and soundly. Jeff Kline, former CEO of Circuit and a member of our board, called it formal regulatory clarity that confirms what the industry has always believed. Rodney Hood, former NCUA Chairman and a member of our board, frames it as another tool that adds to the strength, safety, and vitality of the credit union ecosystem. 

We built it in 2024, ahead of that clarity, with credit union ownership and oversight from the start. Today, 145-plus credit unions are on the network, ranging from $18 million to $20 billion in assets. 

For those unfamiliar with reciprocal deposits, how would you explain the concept and its value proposition? 

A member opens one account at their credit union and signs one disclosure. The full balance, whether that's $1 million or $20 million, sits in a single demand account. Behind that, we place the balance across network credit unions in allocations under the per-institution NCUA limit, so every dollar is eligible for pass-through share insurance. And for every dollar placed out, a matching dollar comes back from another credit union on the network. The credit union keeps the deposit on its balance sheet, keeps the lending capacity, and keeps the relationship. 

The member's experience is the whole value proposition: one account, one statement, one relationship with the institution they already chose. They are not managing four logins at four institutions, and they are not tracking maturities in a spreadsheet. Every dollar a credit union places out funds another credit union on the network. That's the model applied to deposit infrastructure. 

How are credit unions using ModernFi to attract deposits, retain members, and compete more effectively with larger financial institutions? 

Retention is usually where it starts, and acquisition follows faster than people expect.  

On retention, members often threaten to leave credit unions for larger financial institutions or spread their money across several financial institutions for insurance reasons. This became even more pronounced after Silicon Valley Bank went under. ModernFi can provide a product that solves this problem. 

For deposit growth, the extended insurance account can be used as an offensive tool to attract large-value depositors such as businesses, municipalities, high-net-worth individuals, and nonprofits. Often, these organizations require collateral to be posted or federal insurance to bank with an institution. ModernFi allows credit unions to win these types of deposits proactively.  

Pima Federal, a $1.5 billion credit union in Tucson, Arizona, acquired Republic Bank of Arizona and inherited extended insurance accounts that their prior provider couldn't carry for a credit union. We onboarded those accounts with no lapse in coverage. On acquisition, Ascend Federal in Tullahoma, Tennessee, went from member data analysis to inbound deposits in two weeks. Innovations Financial in Panama City, Florida, activated in six weeks and reached $26.8 million in network deposits within three months of signing. 

On competing, without ModernFi, credit unions are excluded from RFPs due to a requirement they couldn't meet. Lance Soma, CFO at Lōkahi, describes it as deepening member relationships while reducing the cost of funds. 

What types of member relationships are credit unions now able to serve because of the ModernFi CUSO network? 

Commercial is the largest at 45 percent of network deposits with a typical relationship around $1.8 million. Those are operating, reserve, and payroll balances a treasurer has a fiduciary duty to protect, and now the balance, the payment activity, and the lending relationship sit together. Public funds is growing the fastest by a wide margin and has been up 101% year over year. Municipalities must secure public deposits, historically by pledging collateral. However, the network account meets the requirement without encumbering the balance sheet. Dort Financial in Michigan entered public funds as an entirely new segment and activated multiple municipalities within five months. Their CFO Jeremy Zager said it gave them a simple, credible yes for municipalities, and that a conversation which used to take months can now close in the same meeting. 

Disclaimers 

ModernFi, Inc., ModernFi Deposit Services LLC, and ModernFi CUSO LLC are not NCUA-insured credit unions. Deposit insurance covers the failure of an insured credit union, not ModernFi or ModernFi CUSO. Deposits are placed at insured network institutions and are eligible for pass-through insurance up to $250,000 per institution. Certain conditions must be satisfied for pass-through NCUA deposit insurance coverage to apply. A list of participating credit unions appears at https://www.modernfi.com/credit-union-list. Quotes are from ModernFi CUSO partner credit unions and reflect their individual experience; results may vary.