CU Members Told to Take Their Money Elsewhere

Credit Union Journal Daily Briefing  |  Friday, March 5, 2010

LAS VEGAS – With rates near all-time lows and costs still rising, it has become so difficult for credit unions to earn a positive spread for its members that Nevada FCU is paying members to take their money elsewhere.

"There’s virtually no loan demand right now, given the local economy; short-term investments are paying as low as 0.10% to just 0.25%; and we’ve been told to prepare for an NCUA assessment of anywhere from 15 to 40 basis points – it’s a negative spread," declared Brad Beal, president of the $820 million credit union.

"It’s a whole different deal," Beal told The Credit Union Journal yesterday. "Never in my life have I seen anything like it. Net yields are in the negative."Some area credit unions and banks are trying to shrink