The Minneanapolis Star-Tribune writes "Big deposits become a big problem for lenders". It says, "What next -- you get a toaster to go away? A small Bloomington-based lender has, in effect, started turning away money. Star Choice Credit Union recently mailed a short letter to about 20 customers informing them that it will no longer pay interest on the amounts they have above $100,000 in their money-market accounts." The article quotes a letter from President Daniel Christiansen, "With the recent inflow of money, we have found that we can no longer pay market or above market rates on these accounts.... We're just pretty well loaned out." The piece adds, "The move illustrates the pressure on lenders of all stripes, including prosperous ones like Star Choice, as they struggle to invest cash that wary customers have parked with them for safekeeping. With interest rates scraping bottom and loan demand tepid, there aren't many options for small lenders to wring profits from their customers' savings. Credit unions face an extra complication, in that they have special limits on the volume of business loans they can make."

Email This Article




Use a comma or a semicolon to separate

captcha image