Denver-Based IPFS Withdraws Infringement Claim Against INDECO of Miami

2008-07-29 07:00:00

Denver-Based IPFS Withdraws Infringement Claim Against INDECO of Miami

    Dismissal Opens the Door to Large-Scale Deposits for Community Banks

    MIAMI, Fla., July 29 /EMWNews/ -- In a ground-breaking move that

will have a huge positive impact on the nation's community banks,

Denver-based Index Powered Financial Services (IPFS), a company that

provides funding and investments for community banks, has voluntarily

withdrawn its claims of infringement against Miami, Florida-based Insured

Deposits Conduit (INDECO), a securitization conduit that places deposits

into FDIC-insured institutions.

    The withdrawal of the lawsuit means that independent community banks

and thrifts can now have access to funding from institutional investors

through the capital markets, in much the same way the largest banks in the

country secure such funds. Through INDECO's program, FDIC-insured financial

institutions can gain a steady stream of deposits at rates competitive with

other wholesale funding sources without a collateral requirement.

    "This is big news," says Raul Valdes-Fauli, president and CEO of CNL

Bank in Coral Gables, Florida. "This adds an important funding alternative

at a time when the market looks very favorably on having diversified

funding sources."

    The withdrawal came in response to a Federal court order determining

that a new version of INDECO's program to securitize CDs is "materially

different" from a previous version. IPFS had alleged that INDECO's process

violated one of its own "business method" patents. IPFS' decision to end

the litigation paves the way for hundreds of millions of dollars to be

deposited into the banking system each month.

    INDECO president Gregory Schein was pleased with the announcement. "We

are extremely happy that IPFS along with their counsel Greenberg Traurig

decided to do what is best for the industry and end the litigation so that

we can now focus on the business of funding community banks throughout the

country. With all the turmoil in the industry, this should alleviate some

of the pressures bankers are now facing by providing a low-cost deposit

source which will allow them to fund the asset side of their balance sheet

so that they may continue to serve their core customers efficiently."

Press contact: Marisel Riva Media Relations 305-441-8241

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