Bank officials request change to county checking agreement
By Mavis Fodness
Security Savings Bank wants to change the terms of a banking agreement with Rock County due to the current COVID-19 pandemic.
“This is unprecedented,” said Ryan DeBates, Security Savings Bank branch manager in Luverne. “We are asking for a temporary amendment.”
He approached county commissioners with the proposal at their March 17 meeting, but they tabled a decision until their April 7 meeting.
Exact terms and a timeline were not outlined at the March 17 meeting, but bank officials painted a bleak financial picture.
Since the COVID-19 virus was first reported in the U.S. in December, stock markets declined sharply, taking a reported $10 million out of the markets.
COVID-19 was declared a pandemic on March 11, dropping markets even further.
DeBates, along with Tim Plimpton and Alec Bonander, both with Security Savings Bank, explained the negative dips in the U.S. Treasury Bond market and the recent impacts on the banking industry.
Locally, Security Savings Bank sees potential savings by changing a professional agreement with the county.
“We want to honor all parts of the agreement but for two parts,” DeBates said.
Instead of annually, interest on the county’s checking accounts would fluctuate quarterly, along with establishing a new floor rate.
The change could save the bank $100,000 in payments to the county.
In 2016 the county agreed to a professional agreement with Security Savings Bank for no fees on the county’s five checking accounts and an interest rate of 0.85 percent.
The county’s checking account balances fluctuate, but as of March 13, the balance was slightly over $9 million.
Certificates of deposit at Security Savings Bank are included in the proposed agreement change.
Last year the county garnered $263,000 from the professional agreement.
“It will be a major impact item for us,” said County Administrator Kyle Oldre.
Bonander suggested “by doing this we will be able to help others” to lessen potential personal financial losses.
Commissioner Stan Williamson said later that $100,000 was committed to the highway department for additional gravel for county roads.
“Do we tell Mark (Sehr, county engineer) he no longer has the funds?” Williamson asked.
Discussion will continue at the April 7 meeting, which begins at 9 a.m. via electronic conferencing.