Magazine article American Banker

Federal Interest Rate Deregulation Is 'Nonevent' for West Virginia Thrifts

Magazine article American Banker

Federal Interest Rate Deregulation Is 'Nonevent' for West Virginia Thrifts

Article excerpt

Federal Interest Rate Deregulation Is 'Nonevent' for West Virginia Thrifts

CHARLESTON, W.Va. -- The federal regulation limiting interest rates on bank and savings and loan passbook accounts to 5.5% ended April 1, but few West Virginia institutions seemed to pay much attention to it.

Charleston bankers said that, had the ceiling been removed a year ago, there might have been a stir. But with interest rates in steady decline, they said, there is little incentive to launch new marketing campaigns to keep or attract the depositor's dollars.

Some financial institutions here said they plan to simplify the accounts they offer; and some said they will make minor adjustments. That's about it.

"It just doesn't seem to make any sense to make major changes with rates where they are," said Steven Kelly, a marketing official at the Kanawha Valley Bank, which does not plan to increase rates. "There's no guarantee rates won't go even lower."

"The significant factor is that all interest rates are lower," said Mae Ellen Wildt, senior viced president for funds management at the Kanawha Banking and Trust Co. "The 90-day Treasury bill is 6.5%. That makes the 5.5% to the small investor very attractive on the relative scheme of things."

Ms. Wildt said that Kanawha has no plans to raise the rates it pays.

Sam Cipoleti, vice president of marketing at the national Bank of Commerce here, said the institution no longer will open time savings accounts. Those differ from normal passbook accounts in that they pay 0.25% higher interest than passbook accounts, but a person has access to the money only every 90 days.

"We felt that in a deregulated environment, there was no reason for anyone to open a time savings account," he said. …

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