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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Dec. 14, 1982)
Battalion/Page 5 December 14, 1982 local / state iet Banks, S&Ls compete or high-interest funds r workandi: ■thing ab] 1 at, Robertson artmentotl one I worltj by Tom Dobrez Battalion Reporter Bie government has created uld often |, ne " ^ e ^ era ^y insured bank iathehitcfJi unt J t ° hel P banks and sav ' ings and loan companies com- I I' : |lete with high-interest money said funds. But in Bryan- Hege Station, the real battle is tn whoKai"® een regulated banks and said that k Iftf institutions, datives Ho;,;W ae main reason for setting in Amtini B 16 accounts on the national iidtheyweS was to hd P. iur< ; the $227 enttoseetltj Bin invested in the money )t believe it ra ( et back ‘ nto g over ninent- n “Bred accounts. ■.orally, experts agree that ■ should happen and that Hey market brokers aren’t ■ |ng to attempt to compete. B )av i s McGill, branch mana- ■for A.G. Edwards in Bryan, Hained the brokers’ attitude. HvV e have to take care of our ^Jt,” McGill said. “If the Jts offer a better investment, in going to tell my investors to be taken as itk# it. 1 figure if I take care of anging raa leni, they will take care of me.” eased. EMihe new program set up by the businesmDepository Institutions De- rcent of ikHlaiions Committee allows jors said tlieH|ks and savings and loan com- loniftheyco'Janies to offer a better deal, or. Brst, the new account allows interest in Ifaiennstitutions to set. their own 1 business surest rates. In the past, a ceil- lid she hopeHwas placed on the insured asis placed iccoiints. The popular 5.25 per- of Business p| passbook account is a prime Texas AMppipie of this type of regula- teronesckjon. hip in thenHecil Peters, senior vice presi- ireneurial s:lent in charge of marketing for with (tkitzos Savings in Bryan, said said. fi|g able to set interest rates is a re would ng plus for the new accounts, each small wOur rate will vary from day e from? pd a } > but we will never be lower esdowntoAi the money market fund,” d. “Whatsuiters said. “Their rate is based uldgivetolkpinarket conditions. Our rate icket chaif Hbe set at whatever we want.” at a large coifs' The same advantage also can be detrimental to a bank or sav ings and loan company. Glynn Williams, president of First Fed eral Savings and Loan Associa tion of Bryan, said the industry should be cautious when setting rates. “The banks and savings and loans should not set rates that are unreasonable,” Williams said. “They should be aggressive “If the banks offer a bet ter investment, I’m going to tell my inves tors to take it. ” — Davis McGill, branch mana ger for A.G. Edwards in Bryan. as far as business, but they shouldn’t put themselves on the line by trying to lure new cus tomers with unreasonable in terest rates.” Besides high interest rates, the new accounts offer a second advantage over money markets — the depositor’s money is in sured. Although few people have lost money in the market funds, the added incentive of a depositor being guaranteed re turns adds sauce to the banks’ already juicy deal. Williams said the insured clause will help lure investors who are using tne market funds for their high interest rates. “There are a few benefits the market fund offers but the idea of our accounts being insured will cause a great deal of inves tors to switch,” he said. “This takes all the risk out of the in vestment.” Moreover, the banks and thrifts suggest that the local money flowing into the new accounts will be used to finance local housing needs and com munity projects. In contrast, money funds often “distrubute local capital elsewhere, much of it overseas,” Peters said. “The money market’s hands are tied,” he said. “They must invest in securities. While at Bra zos Savings, we can take the money and invest it back in the community if we choose.” The fourth, and perhaps the most important advantage, is the flexibility of the new accounts. Depositors will be able to take their money out when they want to, unlike some money markets that require a day or two notice. At the beginning of the new year, many of the new accounts will be converted into checking accounts and still will receive high interest. Brazos Savings already has set a date for the convergence. “On Jan. 5, these accounts will become checking accounts re ceiving the high interest,” Peters said. “This interest will be com pounded daily until the person’s balance goes under $2,500, the minimum balance required to start an account.” The minimum deposit was set by the DIDC upon request from the industry in order to prevent depositors from transferring money from low-interest pass book accounts to the higher- yielding accounts. But locally, bankers don’t see minimum deposit requirement as a major problem. “The percentage of our assets located in the passbook accounts is not significant enough to hurt us even if everyone transfer red,” Williams said. But will the new account be the end of the passbook savings accounts that earn 5.25 percent or less? Peters doesn’t think so. “As far as investment pur poses, the passbook is pretty much of a dinosaur,” Peters said. “But lately there has been a resurgence in old-fashioned thrift. Passbooks are still very buyable, especially when times are tight. People can save their money until they reach the mini mum balance and then switch.” Oh the surface, the minimum deposit appears to be the only drawback, but bankers foresee other trouble spots. “We have enough rope to hang ourselves,” Peters said. “The banks must express ex treme caution in investing these funds because we have the pow er to self-destruct. “From the customer’s point of view there is no risk or major disadvantages. But the banks must apply prudent strategies to invest properly or we’ll shoot ourselves in the foot. It’s a chal lenge facing the whole finance industry. It will be a difficult job to invest money wisely.” In essence, the new accounts, which originally were set up to help banks and savings and loan companies compete with money market funds, the battlelines are drawn between the banks and thrift institutions themselves. “There will be all sorts of gim micks to capture new custom ers,” Williams said. “Some of them will be bordering on de ceptiveness. The key will be to be competitive but also possess sound management.” Wood jury requests FBI evidence tapes United Press International SAN ANTONIO — Jurors requested tapes of the secretly recorded conversations of hit man Charles Harrelson, ac cused of killing Federal Judge John W’ood, to launch their third day of deliberations Monday. The panel recessed at 6 E .m. Sunday, ending 9'A ours of deliberation during the weekend without verdicts for Harrelson, his wife, and Elizabeth Chagra. The panel was scheduled to hear four of the tapes re corded by the FBI during the 3‘/2-year investigation of Wood’s death. The tapes were submitted as evidence in the nine-week trial. Art Nicholson, a clerk for presiding Judge William Ses sions, played the tapes of Har relson recorded by Harris County Jail inmate John Lee Spinelli, who cooperated with the investigation in return for transfer to a federal prison. Harrelson’s attorney, Tom Sharpe of Brownsville, said he was not surprised the jury was taking several days to deliber ate the case. “How long does it take for people to regurgitate nine weeks of testimony?” he asked reporters outside the cour troom. Harrelson was accused of shooting Wood outside his San Antonio apartment May 29, 1979, for a $250,000 payoff from Las Vegas gamb ler Jimmy Chagra. At the time, a drug smuggling trial for Chagra was scheduled in Wood’s court, and Chagra had said he feared a life sent ence. Chagra is to be tried for murder later. Jo Ann Harrellson was tried for obstruction of justice for pressuring her daughter, Teresa Starr, and other friends not to cooperate with the FBI or testify to the grand jury that investigated Wood’s death. Chagra’s wife Elizabeth was also on trial for conspiracy and obstruction of justice. Prosecutors claimed she en couraged her husband to kill Wood and then delivered the payoff money to Starr. •/•vi' '■ .rtf ” '•.s-b'"' . • That means should be careful institutions to keep in terest rates as high as possible, but not so high that the institu tion can’t pay them. jJlack votes protected y Court’s decision aid that so*! hat teai rses wo f their them the ifi mial necessr eir careers, aid progress tlging the aw United Press International > classesdiHfWASHINGTON — The Sup- w curriculi'jieme Court, on a 6-3 vote Mon- the alkotdiy, upheld a federal court’s au- rld help, shlhority in a voting rights case to Ber changes in the system of Bering city commissioners in Port Arthur. EThe justices put their stamp pf approval on orders by a U.S. District Court in Washington l] Biat were expected to enhance the voting power of blacks in the southeastern Texas border town. ■Justice Byron White, writing for the court, said the changes were “a reasonable hedge against the possibility that the i|(voting) scheme contained a Bipjsefully discriminatory ele- Int.” The dispute stems from a city pansioniri 1977 and 1978 that rered the percentage of black pulation within Port Arthur’s rders from 45.2 to 40.6 per il. At the same time, the city he Bart. commission was to be expanded from seven to nine members. Under the Voting Rights Act, the election changes had to be approved. After several new election plans were rejected, the federal court offered to approve one proposal — but only with a con dition. The plan had to be changed so that two at-large commission ers would be elected not on a majority vote, in which a winner must garner more than 50 per cent of the votes, but by a plural ity vote that awards the seat automatically to whichever can didate gets the most. The plurality method would give blacks a greater chance of winning the seats. The city appealed to the Sup reme Court, claiming the plural ity condition was not needed be cause its voting plan already gave the city’s black voters at least one-third of the council’s positions. Justices Lewis Powell, William Rehnquist and Sandra Day O’Connor dissented, saying they thought the condition unneces sary. WMF 3 ? I. - 1 ■■■ n' P so Prescriptions Filled Glasses Repaired BRYAN 216 N. Main 799-2786 Mon.-Fri.8-5 Sat. 8-1 COLLEGE STATION 8008 Post Oak Mall.. 764-0010 Mon.-Sat. 10-9 p.m. Texas State ® Optical qe ■ Since 1935. 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