Harris Bank cuts prime lending rate to 5 percent

Harris Bank lowered its prime rate by one-quarter percentage point after the Federal Reserve cut its key interest rate.

Chicago-based Harris Bank, which is part of BMO Financial in Toronto, said late Wednesday its prime rate is now 5.00 percent, down from 5.25 percent. The Fed cut the federal funds rate, which is what banks charge each other for overnight loans, to 2.00 percent from 2.25 percent previously.

The prime rate is what banks charge their best customers, and serves as the benchmark for lending rates to all customers for mortgages, credit cards and other products.

Most banks typically raise or lower their prime rate by an amount equal to the Fed's rate action within minutes of its decision.