Aiming to free up lending and jolt the economy back to life, last week the Federal Reserve cut the federal funds rate from one percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments.

It was the best news in months for anyone looking to lock in a 30- year, fixed-rate mortgage. The affects of the rate cut will be felt by financial institutions in Bossier, and will eventually trickle down to benefit the individual customer.

Mel Campbell, a spokes person for Regions Bank said,” The Fed moved very aggressively to encourage lending by dropping rates to historic lows and we moved in tandem with their announcement by lowering or prime rate to 3.25 percent, he said.

“This environment is a very good opportunity for those who are able to, to take advantage of their credit worthiness right now.”
Regions City President for the Bossier-Shreveport metro area Keith Chrissman said that the lower rates should be available to local residents in about 30 days.

Local community banks were not directly involved in the financial crisis that has affected the larger lending institutions.

Red River Bank President Harold Turner said, “We have never stopped lending money. We have had money to lend and we have not changed anything that we have been doing. I think that you will find this to be true with most of the community banks,” said Turner.

First Louisiana Bank Executive Vice President Tom Glass agreed.  “It does not have that much affect on our bank,” he said.  “A lot of the investments that have gone bad are not investments that we would get involved in.“

Turner said that the Fed reducing rates really has to do with the cost of money and where it mostly affects the community bank is in what the bank can get for its over night money.

“It is going to reduce what banks are going to pay for deposits. Depositors are going to see lower rates on the deposits,” he said.

Glass said he hoped the lower mortgage rates generated by the cut would generate some interest from his customers.

“We are still making loans, but it is hard to tell what customers are going to do,” he said.

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