D3O-Lancaster Farming Saturday, March 8,1986
FCA acts to comply with emergency Farm Credit law
McLEAN, VA - The Farm Credit
Administation (FCA) has taken a
series of actions to ensure rapid
implementation of the Farm
Credit Amendments Act of 1985,
whicl? became effective January
23.
“The law is straightforward in
describing the information to
which borrowers are entitled, and
those provisions can be im
plemented before regulations are
issued,” said Donald E. Wilkinson,
acting chairman of FCA. “The
provisions dealing with actions on
loan applications do not require
regulations and are also effective
immediately,” he said.
The agency also directed system
institutions to conserve their
financial resources so they will be
able to marshall those resources to
help manage the current financial
difficulty.
Wilkinson reminded system
officials that full use must be made
of internal financial resources
before outside assistance is
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Member F D 1C
requested.
Rights of Applicants
“When a borrower obtains a
loan, the law requires the
disclosure of the interest rate,
including examples of how the rate
is affected by the purchase of stock
or participation certificates. If it’s
a variable rate loan, the borrower
must be told how much and how
often the interest rate can go up
during the term of the loan. And if
there are no limitations, the fac
tors that go into determining rate
adjustments, including the cost of
funds, operating expenses, and
provisions for loan losses must be
disclosed,” Wilkinson said.
In addition, he explained, an
applicant whose request for credit
has been denied or reduced is
entitled to a review by a credit
committee that includes farmer
board representation. The review
must take place within 30 days
after the applicant requests it. And
the review committee’s decision
and the reasons for it must be
Pipeline
Daily
(Continued from Page D 29)
multiplying effect any loss m
quality might have on DM intake
and resultant production of the
herd.
The Cooperative Extension
Service is an affirmative action,
equal opportunity educational
institution.
There's something richly rewarding about getting
up long before the sun does and working hard to get
the most from your land and your livestock We at
Bank of Lancaster County salute you who have made
farming your chosen field. We’ve been here in
Lancaster County for more than 120 years helping
farms like yours grow strong
Bob Badger and the Bank of Lancaster County’s
Agricultural Loan Division understand farming from
the ground up For years now, Bob has been helping
area farmers grow with loans for machinery, livestock,
construction, mortgages, and other operating ex
penses For whatever your needs, visit Bob at our
Slrasburg office, or give him a call and
he’ll visit vou He gets up pretty early too
Bank of Lancaster Agricultural Loan
Division, Center Square, Strasburg
(717)687-8691
promptly provided to the applicant
in writing.
Wilkinson noted that the law
further requires that borrowers be
provided with copies of all
documents they have signed as
part of their loan transactions, as
well as with copies of the articles of
incorporation and by-laws of the
institution.
“these provisions are designed
not only to give borrowers
essential information when ob
taining loans, but to offer them a
measure of protectin once the
loans have been made,” Wilkinson
said.
The Farm Credit Administration
ha« totnn steps to make
Bank of Lancaster County
, t The betterjtank because we live here too
Conserving Resources
sure that healthier system in
stitutions do not take actions that
would reduce the resources
available to the system as a whole.
System institutions may not take
the following actions, without
approval of the FCA:
* extraordinary operating and
capital expenditures that are
within the control of management
or boards of directors and in ex
cess of $250,000;
* major changes that increase
the cost of employee benefit and
pension plans or major changes in
depreciation procedures;
* repurchase of unmatured debt
instruments;
* payment of an interest rate on
member funds held by a district
easy
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bank in an amount that exceeds the
member’s loan rate; and
* charging an interest rate by
any Production Credit Association
that is less than it is paying for
money from the Federal In
termediate Credit Bank.
System officials were also
reminded that all provisions of the
allowance for losses accounts are
to be in compliance with generally
accepted accounting principles.
And they were cautioned that these
provisions would be reviewed by
FCA examiners.
The agency also expressed
concern over changes in interest
rates by system institutions. It said
proposed changes would be
evaluated in the light of the in
(Contmued from Page D3X)
CWaivor Interest v
Until
r Oct. 1, 1986 Z 2
J Up To (
‘6,500
Cash Savings