Scrooge-Like Approach To DividendsHaunting The Bottom Line

WASHINGTON - (12/13/05) Credit unions' continuing strategy ofnot raising interest rates on savings is doing more harm than good,according to one economist. “The trend that has beendeveloping all year and reversed briefly in September but now isback is that we have decent loan growth and incredibly weak savingsgrowth,” said CUNA's Bill Hampel. “Credit unions areattempting to protect their bottom lines by not increasing savingsrates as quickly, but this is leading to less growth in savings incredit unions but not necessarily at other financial institutions.I pleaded with them not to do this. I told credit unions not toworry about their bottom lines because they have excess capital.But they ignored my pleadings and kept their savings rates laggingbehind the market, and that has lead to less growth at creditunions and fewer dividends for members.”