OCR Text |
Show Two Types of Loans From Bank for Coop. By E. A. Stokdyk Berkeley, Calif., Oct. 18th, The Berkeley Bank for Cooperatives is incorporated for five million dollars.. dol-lars.. Two types of loans are made from this bank, one known as a facility loan, and the other as an effective merchandising loan. The rate of interest on facility loans shall as nearly as practicable conform con-form to the prevailing rate on mortgage loans made to members of the national farm loan associations assoc-iations at the time the loan is made. At present this rate is 5 per cent. The rate of effective merchandising merchand-ising loans shall, as nearly as practicable, pra-cticable, conform to a rate of 1 per cent per annum in excess of the Federal Intermediate Credit Bank discount rate at the time the loan is made. The Federal Intermediate Inter-mediate Credit Bank rate varies, but at present is 3 and one-half per cent, which makes the present rate 4 and one-half per cent oil effective merchandising loans. There are twelve regional banks for cooperatives in twelve federal land bank districts. These regional region-al banks will handle loans which are not in excess of $500,00. Loans of more than this amount will be handled directly by the Central Bank for Cooperatives in Washington Washing-ton D. C. After a loan has been granted by a bank for cooperatives, the borrowing, cooperative is required to purchase stock of the value of $100 for" each $2,000 loaned. Upon discharge of its loan, the stock held by the borrowing cooperative will be retired and cancelled; and the cooperative association will be paid for this stock. The Berkeley Bank for Cooperatives Cooper-atives has received approximately ten applications to date, and appraisals ap-praisals are being made of the applications. Any cooperative desiring de-siring information on how to obtain ob-tain loans may have such information infor-mation by addressing the Berkeley Bank for Cooperatives. |