central, Il. | IADAVE - 4/26/2017 13:32
I will tell you why they would call your note in season. My second year of farming was 83 and I burned up big time. In 1984 interest was going up and after making my agreed to payment on my machinery note I had just covered the interest. I put up a truck for operating cash. After the crop was in but before I had payed the coop they called my note. Since I couldn't pay it I was in default. This allowed them to increase my interest to over 23%. Add in another 10% for stock and it put me at 25.2% interest. By the time the extra fees were added in it put me at 28% interest! Not to mention the fact that I now couldn't pay the coop as PCA had me tied up. In essence they doubled the interest on me doing it that way. BTW I was not in bad shape as I had them paid off before Christmas that year. Of course I had to pay the 10% stock off also to get clear as they did not retire it with payment of the principal and interest as was originally the agreement. The sad part is after I paid them the original amount owed in March plus another 38% ( Interest and stock) they still would not release the liens on my now paid for crop and equipment! I had to hire a lawyer to get them to release me. Not to mention they kept the 10% stock for quite some time interest free.
I know, after 33 years you would think I might loose my hard feelings!
Just imagine what that did for the banks bottom line if they did that to every one! They basically increased their margin by 25%! and added 10% to their net worth!
The part that added insult to injury is the guys who were living high and really in trouble had access to money for new tractors, pickups. and land! Then got big write offs as they couldn't cash flow.
Dave, I basically had some of those same things happen to me during that time. I was in my 6th year of farming then. But I was with a bank and not PCA. My original loan officer left the bank and took another job at a different bank. I was about ready to change when he left and go with him, but it was out of our area and he didn't want to take any customers away from his original place of employment as he and I talked about it. So after he left, I was put with a new banker who had been at PCA. Some of those same things you described happened when he came.
I wasn't going to put up with that bs and went over that guys head to the president of the bank. Long story short, I got it straightened out. But I am no longer with that bank as your last statement is EXACTLY what I feel that same bank is doing again NOW. So don't feel bad about not losing your hard feelings after 33 years, because you are not alone.
Edited by supertiquer 4/26/2017 19:12
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