When treasury teams talk about cash, the focus is usually clear:
safety, liquidity, yield.
But there’s another, quieter story playing out in the background.
Across the U.S., community banks and credit unions are using deposits to support financing affordable housing, small business growth, and neighborhood revitalization often in places traditional finance overlooks.
Community-driven deposit administration platforms, including CNote’s Impact Cash®, sit in the middle of that story. They’re designed to help institutions take idle institutional cash and place it in insured accounts at community-driven financial institutions that lend to their communities.
How Community-Driven Deposits Actually Work
At a high level, the mechanics are simple:
- An institution places cash
A corporation, foundation, or other organization allocates a portion of its cash into an insured deposit program that works with community financial institutions. - The program distributes deposits
A platform like CNote’s Impact Cash empowers institutions to direct 100% FDIC/NCUA insured deposits across a network of vetted community banks and credit unions. - Local financial institutions lend to their communities
With a stronger deposit base, those institutions have more flexibility to fund small businesses, affordable housing, and community facilities, the core areas community banks are widely recognized for supporting. - Impact is tracked and reported
Impact frameworks and annual reports translate those loans into outcomes like homes created or preserved, businesses financed, and community spaces expanded.
The rest of this piece zooms in on what that looks like in real communities.
Story 1: Turning Deposits Into Workforce Homes in Rural Colorado
A few years ago, the town of Ignacio, Colorado, was facing a familiar problem:
rising housing costs, limited inventory, and essential workers who couldn’t afford to live near their jobs. Median home prices in the county hovered in the mid-$400,000s, out of reach for many local families.
To respond, the town launched Rock Creek, a 21-home modular development designed for local workers. Phase I included 10 three-bedroom homes aimed at families earning up to 140% of the area’s median income. For example, occupations like teachers, nurses, and other workers who often fall into the “too much for subsidy, too little for market” gap.
At the center of the project was First Southwest Bank, a mission-driven, FDIC-insured Community Bank and CNote Impact Cash partner with deep roots in rural Colorado. The bank structured a two-part financing solution, a below-market loan to the town’s housing authority and an additional loan through its Affordable Housing Investment Fund, to keep the development on track and the homes within reach for working families.
Those loans:
- Helped Ignacio avoid cost overruns and construction delays
- Reduced the projected sale price of each unit
- Supported a local modular homebuilder, sustaining rural jobs in the process
Where do community-driven deposits come in?
Deposits placed through platforms like CNote help expand the balance-sheet capacity of Community Banks such as First Southwest, so they can take on projects like Rock Creek workforce housing that may not fit the typical profile of larger, urban-focused lenders.
Stronger, values-aligned deposit bases make it easier for Community Banks to step in quickly with flexible capital when a town is ready to act.
Read the full story: How First Southwest Bank Helped the Town of Ignacio Deliver Affordable Modular Homes for the Local Workforce
Story 2: A Small Business Cleans Up Local Waterways
On the other side of the country, a concrete truck operator in New England saw a different kind of gap.
Every day, trucks were washing out concrete residue on job sites, sending highly alkaline wastewater into the environment. It was a niche problem with serious environmental consequences and a business opportunity for someone willing to solve it.
That someone was Jeff Trudeau, founder of Concrete Washout Solutions of New England.
Jeff developed a plan for a service that would capture and treat washout water, separating solids from water so clean water could be safely discharged on-site. But when he approached banks for financing, many didn’t see the potential. Some projected that his sales would remain too low to justify a loan.
A local community bank Millbury National Bank saw it differently. The bank provided a startup loan and working line of credit, and backed that financing with practical support: deposit management, online banking, and ongoing guidance as the business scaled.
Over the following decade:
- Concrete Washout Solutions grew significantly, adding vehicles and equipment
- Jeff paid back his loans and expanded his services
- The company became a unique environmental solution provider in its region
CNote later highlighted Millbury National Bank’s work as an example of the kind of lending that Impact Cash deposits can help support. Corporate clients using Impact Cash to place insured deposits at Community Banks and Credit Unions in CNote’s network, which in turn can use those deposits to fund entrepreneurs like Jeff, whose businesses deliver both financial and environmental value.
When more treasury and finance teams include community-driven institutions in their cash strategy, banks like Millbury National can say “yes” to more innovative, community-benefitting businesses.
What the Research (and the Data) Say About Community-Driven Deposits
The stories above are individual snapshots, but they sit within a growing body of evidence about the role of community-focused finance:
- Community Banks and Credit Unions are widely recognized for filling credit gaps in under-served communities, funding small business, affordable housing, and community facilities that traditional lenders may overlook.
- Studies and industry reports show that CDFI lending can help create jobs, support first-time homebuyers, and revitalize community infrastructure, from childcare centers to health clinics(Community Development Financial Institutions Fund).
From a treasury or CFO perspective, the key takeaway is that community-driven deposits expand the lending capacity of institutions that are structurally oriented toward inclusive, place-based impact.
Where Treasury Teams Fit In
Most treasury teams are not trying to become community development experts. Their core mandate remains:
- Preserve principal
- Maintain appropriate liquidity
- Earn a risk-aligned return
That hasn’t changed.
What is changing is the recognition that where corporate and institutional cash sits can meaningfully influence who gets access to capital.
Community-driven deposit programs like CNote’s Impact Cash are designed specifically for that intersection point:
- Deposits are placed into FDIC- and NCUA-insured accounts at community-driven banks and credit unions.
- Capital flows into institutions that specialize in serving under-resourced communities and borrowers, often with a track record of lending through all economic cycles.
- Impact frameworks and reports translate those deposits into transparent, aggregate metrics and stories that you can share with boards, employees, and other stakeholders.
From Idle Cash to Local Impact
Idle cash will always be part of the balance sheet. But it doesn’t have to be passive.
When deposited through community-driven channels, that same cash can:
- Help a rural town create homes its workers can actually afford
- Support an entrepreneur solving an environmental challenge in their own backyard
- Strengthen member-owned institutions that keep families out of predatory financial cycles
