WASHINGTON - (08/10/05) -- The Federal Reserve moved againTuesday to lift short-term rates but credit unions have beenavoiding the inevitable squeeze on margins by lagging behind theinterest-rate market. But by lagging the market, credit unions arelosing out on new deposits that are seeking higher rates at banksand money market mutual funds, according to CUNA economist BillHampel. Yesterday's 25 basis point hike--the tenth in the lastyear--pushed the target rate for overnight funds to 3.5%. Thatmeans credit unions will soon have to contend with mutual fundmoney market accounts that are paying the 3.5%, a far cry from the1.3% paid by the average credit union on its money market accounts.Credit unions have been slow to match market rates on regularsavings and checking accounts, as well, said Hampel. The result iscredit unions have been able to maintain their return-on-averageassets around 90 basis points, but have seen only 3% deposit growthin the first half of the year, the lowest in a decade. Hampel seesthis as a troubling trend. "If you don't grow, you die," he toldThe Credit Union Journal.
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At a time of mild or nonexistent loan growth, middle-market borrowers in the Lone Star State are providing a boost to Fifth Third Bancorp and Huntington Bancshares.
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New details have emerged about the negotiations that culminated in Capital One's blockbuster $35 billion agreement to acquire Discover. At one point last December, the two parties broke off discussions, according to a securities filing.
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According to the Federal Reserve Board's latest financial stability report, persistent inflation and policy uncertainty are the primary worries for banks. Survey respondents expressed heightened anxiety over murky policy outlooks due to geopolitical turmoil and rapidly approaching domestic elections.
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The Alabama regional lender says it expects expenses to taper off this year and anticipates challenged loans will gradually rise to historically average levels.
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Truist Financial's top executive leadership team announces departures; First Horizon's chief credit officer is retiring; Ferry teams with Highnote to roll out a new Visa-branded payroll card; and more in the weekly banking news roundup.
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The Dallas-based regional bank tapped a client for its co-pilot capabilities, where employees can message a bot instead of a human to get tech assistance.
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