EOnation: More comments on national paper

[John Logue <jlogue@kent.edu>]

In the National paper, one issue that may be worth looking at is
establishing national lending facilities for employee ownership.

One of Kelso's ideas was to open the discount window at the Federal Reserve
Bank for ESOP lending.

Since the New Deal, some parts of the cooperative sector in rural America
has been underpinned by special financial institutions.  One is the special
lending facility for rural electrification cooperatives which addressed a
double market failure:  the failure of investor-owned utilities to string
power lines in rural areas at a cost farmers could afford and the failure
of the conventional lending sector to fund co-ops.  

There may be other farm credit facilities for co-ops.  Somebody who knows
more about this than I can add those.
        
During the Carter administration, the Federal government established the
National Cooperative Bank to provide lending to worker co-ops, retail
co-ops, and housing co-ops.  The Reagan administration privatized the NCB
which has survived and flourished since as a lender owned by its borrowers.

Of course the expansion of home ownership in the United States has been
fueled by FHA and VA loans and by Fannie May's securitization of mortgage
loans.  That's probably the most important ownership expansion program we
have run since the Homestead Act.

Similar institutions may exist or could be established at the national
level in other countries.






John Logue
Ohio Employee Ownership Center
Kent State University
Kent, OH 44242
(330) 672-3028
(330) 672-4063 fax
jlogue@kent.edu
http://www.kent.edu/oeoc/