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Nevada
Federal Credit Union has too much money and does not know what to do with it.
Worse yet, sitting in cash is costing the credit union money.
Insurance premiums are the culprit. On top of any deposit premium paid to
customers, insurance runs .4%. Yet short term treasuries yield .25%.
Nevada Federal sees no good lending opportunities so it is paying customers
to close accounts.
Inquiring minds are reading Credit union:
Pul-lease take your money.
Nevada
Federal Credit Union has a deal for big savers: Withdraw your money and
you'll get a bonus.
The credit union is investing in short-term Treasurys and earns about
one-quarter of 1 percent on those government securities on average, but it
was paying 0.4 percent to customers with savings.
In addition, the credit union expects the National Credit Union
Administration to boost deposit insurance premiums by 0.15 percent to 0.4
percent this year.
For each $100 million in deposits, that premium increase will increase Nevada
Federal's costs up to $400,000 yearly, Brad Beal, chief executive officer
said.
Starting Monday, the credit union has cut the variable interest rates on
deposits held by members that only save money to zero.
"We're losing money, and they are not making money," Beal said.
So the credit union will pay these savers a $25 bonus for withdrawing amounts
between $25,000 and $49,999. The bonus jumps to $50 for amounts up to $74,999
and goes to $75 for larger sums.
Perverted System
The National Credit Union Administration (NCUA) and FDIC parasites siphon off
deposit insurance money from good institutions not willing to take risks, to
support institutions taking excessive risks.
In turn, banks and credit unions sitting with high levels of cash lose money
on deposits and the customers make zero percent interest, thanks to the
Bernanke Fed holding interest rates at zero.
Nevada Federal Credit Union is fed up with paying money to the National Credit Union Share Insurance Fund
(NCUSIF) for sitting in cash, so it is paying
depositors to withdraw that cash.
Is
this a perverted system or what?
Mish
GlobalEconomicAnalysis.blogspot.com
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