Banks slow in following suit
Advertiser Staff and News Services
The Fed's rate reduction yesterday should lower borrowing costs for consumers as well as businesses, but it is not clear how much.
Major banks typically begin to trim their prime lending rates by the same percentage-point cuts that the Fed makes in its federal funds rate, but yesterday few did so as quickly as they did after other Fed rate cuts.
M&T Bank Corp., of Buffalo, N.Y., was one of the few nationwide that said it lowered its prime lending rate to 4.25 percent, down from 4.75 percent, effective today. A 4.25 percent prime rate is the lowest in the United States since 1959, when it was 4 percent, according to Fed data.
Hawai'i banks as of last night had not followed the Fed's move to lower rates.
"We have decided not to lower our rates for now," said Carole Tang, spokeswoman for Bank of Hawaii.
Many consumer and small-business loan rates are tied to the prime.