Methods and systems for securitization of certificates of deposit

• US 7,206,761 B2
• Filed: 11/15/2004
• Issued: 04/17/2007
• Est. Priority Date: 11/13/2003
• Status: Expired due to Fees

• Current Assignee: SFPI, LLC
• Original Assignee: Robert C. Colvin
• Inventors: Colvin, Robert Charles
• Primary Examiner(s): PATEL, JAGDISH
• Application Number:
  US10/990,160
• Publication Number:
  US 20050216399A1
• Time in Patent Office: 883 Days
• Field of Search: 705/36, 705/37
• US Class Current: 705/35
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Various embodiments of the present invention are directed to methods and systems for securitization of certificates of deposit. In addition, the present invention relates to a corresponding security itself (e.g., a security associated with one or more certificates of deposit). As such, in one embodiment, the present invention creates a more or less standard investment instrument (i.e. the funding certificate) by pooling the CDs to back the instrument—thus, the net effect is the replacement of non-marketable instrument provided by financial institutions (i.e. the CD) with negotiable securities issued in the public capital markets (i.e. the funding certificate).

Claims

1. A method implemented by a programmed computer system for use in connection with a financial transaction, which method comprises the steps of:

forming a first funding certificate issuer and a second funding certificate issuer, wherein each of the first and second funding certificate issuers is a limited liability company and is bankruptcy-remote from each other;

issuing a first funding certificate from the first funding certificate issuer to at least one investor, wherein;

i) the first funding certificate is a limited recourse obligation by the first funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the first funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the first funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the first funding certificate but has no ownership interests in the first funding certificate issuer'"'"'s assets;

offering to purchase at least one CD from each of a plurality of seller banks by the first funding certificate issuer, wherein each of the CD'"'"'s purchased pursuant to a respective offer is to be owned by the first funding certificate issuer;

providing each of the plurality of seller banks a mechanism to accept the offer from the first funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks using at least a portion of the proceeds of the issuance of the first funding certificate;

recording on a computer acceptance of the offer from each of the plurality of seller banks, wherein a portion of proceeds from the issuance of the first funding certificate is used to only purchase CDs;

issuing a second funding certificate from the second funding certificate issuer to at least one investor, wherein;

i) the second funding certificate is a limited recourse obligation by the second funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the second funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the second funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the second funding certificate but has no ownership interests in the second funding certificate issuer'"'"'s assets;

offering to purchase at least one CD from each of a plurality of seller banks by the second funding certificate issuer, wherein each of the CD'"'"'s purchased pursuant to a respective offer is to be owned by the second funding certificate issuer;

providing each of the plurality of seller banks a mechanism to accept the offer from the second funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks using at least a portion of the proceeds of the issuance of the second funding certificate; and

recording on a computer acceptance of the offer from each of the plurality of seller banks, wherein a portion of proceeds from the issuance of the second funding certificate is used to only purchase CDs.

2. The method of claim 1, wherein each of the plurality of seller banks is:

(a) a federal, state, or District of Columbia chartered depository institution, the deposits of which are FDIC insured under federal law; and

(b) categorized as well capitalized under the FDIC Improvement Act of 1991.

3. The method of claim 1, wherein:

(a) each of the plurality of seller banks is provided a respective offer electronically via at least one of;

(i) a email message; and

(ii) a website; and

(b) the acceptance mechanism provided to each of the plurality of seller banks includes at least one of;

(i) a email message; and

(ii) a website.

4. The method of claim 1, wherein the CD of the first funding certificate comprises a plurality of CDs and have substantially the same interest rate and stated maturity and wherein the CD of the second funding certificate comprises a plurality of CDs and substantially the same interest rate and stated maturity.

5. The method of claim 4, wherein each CD comprising the first funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, wherein each CD comprising the second funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, and wherein x is an FDIC insurance cap.

6. The method of claim 1, wherein a plurality of investors purchase the first funding certificate and a plurality of investors purchase the second funding certificate.

7. The method of claim 1, wherein the steps are carried out in the order recited.

8. A method implemented by a programmed computer system for use in connection with a financial transaction, which method comprises the steps of:

forming a first funding certificate issuer and a second funding certificate issuer, wherein each of the first and second funding certificate issuers is a limited liability company and is bankruptcy-remote from each other;

offering to purchase at least one CD from each of a plurality of seller banks by the first funding certificate issuer, wherein each of the CD'"'"'s purchased pursuant to a respective offer is to be owned by the first funding certificate issuer;

issuing a first funding certificate from the first funding certificate issuer to at least one investor, wherein;

i) the first funding certificate is a limited recourse obligation by the first funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the first funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the first funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the first funding certificate but has no ownership interests in the first funding certificate issuer'"'"'s assets;

providing each of the plurality of seller banks a mechanism to accept the offer from the first funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks using at least a portion of the proceeds of the issuance of the first funding certificate;

recording on a computer acceptance of the offer from each of the plurality of seller banks, wherein a portion of proceeds from the issuance of the first funding certificate is used to only purchase CDs;

offering to purchase at least one CD from each of a plurality of seller banks by the second funding certificate issuer, wherein each of the CD'"'"'s purchased pursuant to a respective offer is to be owned by the second funding certificate issuer;

issuing a second funding certificate from the second funding certificate issuer to at least one investor, wherein;

i) the second funding certificate is a limited recourse obligation by the second funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the second funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the second funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the second funding certificate but has no ownership interests in the second funding certificate issuers s assets;

providing each of the plurality of seller banks a mechanism to accept the offer from the second funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks using at least a portion of the proceeds of the issuance of the second funding certificate; and

recording on a computer acceptance of the offer from each of the plurality of seller banks, wherein a portion of proceeds from the issuance of the second funding certificate is used to only purchase CDs.

9. The method of claim 8, wherein each of the plurality of seller banks is:

(a) a federal, state, or District of Columbia chartered depository institution, the deposits of which are FDIC insured under federal law; and

(b) categorized as well capitalized under the FDIC Improvement Act of 1991.

10. The method of claim 8, wherein:

(a) each of the plurality of seller banks is provided a respective offer electronically via at least one of;

(i) an email message; and

(ii) a website; and

(b) the acceptance mechanism provided to each of the plurality of seller banks includes at least one of;

(i) an email message; and

(ii) a website.

11. The method of claim 8, wherein the CD of the first funding certificate comprises a plurality of CDs and have substantially the same interest rate and stated maturity and wherein the CD of the second funding certificate comprises a plurality of CDs and substantially the same interest rate and stated maturity.

12. The method of claim 11, wherein each CD comprising the first funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, wherein each CD comprising the second funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, and wherein x is an FDIC insurance cap.

13. The method of claim 8, wherein a plurality of investors purchase the first funding certificate and a plurality of investors purchase the second funding certificate.

14. The method of claim 8, wherein the steps are carried out in the order recited.

15. A method implemented by a programmed computer system for use in connection with a financial transaction, which method comprises the steps of:

forming a first funding certificate issuer and a second funding certificate issuer, wherein each of the first and second funding certificate issuers is a limited liability company and is bankruptcy-remote from each other;

offering to purchase at least one CD from each of a plurality of seller banks by the first funding certificate issuer, wherein each of the CD'"'"'s purchased pursuant to a respective offer is to be owned by the first funding certificate issuer;

providing each of the plurality of seller banks a mechanism to accept the offer from the first funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks;

recording on a computer acceptance of the offer from each of the plurality of seller banks;

issuing a first funding certificate from the first funding certificate issuer to at least one investor, wherein;

i) the first funding certificate is a limited recourse obligation by the first funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the first funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the first funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the first funding certificate but has no ownership interests in the first funding certificate issuer'"'"'s assets;

v) a portion of proceeds from the issuance of the first funding certificate is used to only purchase CDs;

offering to purchase at least one CD from each of a plurality of seller banks by the second funding certificate issuer, wherein each of the CD'"'"'s-purchased pursuant to a respective offer is to be owned by the second funding certificate issuer;

providing each of the plurality of seller banks a mechanism to accept the offer from the second funding certificate issuer;

purchasing at least one CD from each of the plurality of seller banks;

recording on a computer acceptance of the offer from each of the plurality of seller banks;

issuing a second funding certificate from the second funding certificate issuer to at least one investor, wherein;

i) the second funding certificate is a limited recourse obligation by the second funding certificate issuer;

ii) the limited recourse obligation is payable solely by the assets owned by the second funding certificate issuer and wherein the assets comprise at least one of the following;

at least one CD from each of a plurality of seller banks and proceeds from a sale of the funding certificate;

iii) the second funding certificate is a note comprising either a debt instrument, an equity instrument or a combination of debt and equity instrument; and

iv) the investor has an ownership interest in the second funding certificate but has no ownership interests in the second funding certificate issuer'"'"'s assets; and

v) a portion of proceeds from the issuance of the first funding certificate is used to only purchase CDs.

16. The method of claim 15, wherein each of the plurality of seller banks is:

(a) a federal, state, or District of Columbia chartered depository institution, the deposits of which are FDIC insured under federal law; and

(b) categorized as well capitalized under the FDIC Improvement Act of 1991.

17. The method of claim 15, wherein:

(a) each of the plurality of seller banks is provided a respective offer electronically via at least one of;

(i) an email message; and

(ii) a website; and

(b) the acceptance mechanism provided to each of the plurality of seller banks includes at least one of;

(i) an email message; and

(ii) a website.

18. The method of claim 15, wherein the CD of the first funding certificate comprises a plurality of CDs and have substantially the same interest rate and stated maturity and wherein the CD of the second funding certificate comprises a plurality of CDs and substantially the same interest rate and stated maturity.

19. The method of claim 18, wherein each CD comprising the first funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, wherein each CD comprising the second funding certificate is in an amount, including a yield to a stated maturity, not in excess of x dollars, and wherein x is an FDIC insurance cap.

20. The method of claim 15, wherein a plurality of investors purchase the first funding certificate and a plurality of investors purchase the second funding certificate.

21. The method of claim 15, wherein the steps are carried out in the order recited.