:File With REA :

:Bulletin 20-9; 320-12:

 United States

 Department

 of Agriculture

 Rural

 Electrification

 Administration

Washington

D.C. 

20250

SEP 1 1988 

SUBJECT: Fedwire Deposit System Wire Message Format

TO: All REA, RTB, FFB, and RCDF Borrowers

ROBERT D. RUDDY

Director

Fiscal Accounting Division

Attachments

RD-GD-1988-09

Implementation of Federal Reserve Board changes to the Fedwire Deposit System 

(FDS) (formerly TFCS) requires a change in the basic FDS wire message format 

for Electronic Funds Transfer (EFT) messages. This memorandum provides 

instructions for preparing an FDS wire message using the new format. Except 

for the changes described below, all other provisions which currently apply to

borrowers, such as due dates and recommended lead times for transmission of 

payments,remain unchanged. 

As in the past, your bank will transfer funds to REA, RTB, FFB, or RCDF 

through the Department of the Treasury account (021030004) at the Federal 

Reserve Bank of New York; however, this will now be accomplished via the

message format shown in the attachment.

Borrowers are responsible for providing the required information to their 

banks and informing their banks that all messages will use the prescribed 

format. Acceptance of FDS wire messages under the new format begins

October l, 1988, and borrowers should instruct their banks at this time to 

begin using the new format.

If you have any questions, please contact Bob Robinson on (202) 382-8830. 

Disclaimer: The contents of this guidance document does not have the force and 

effect of law and is not meant to bind the public in any way. This document is 

intended only to provide clarity to the public regarding existing requirements 

under the law or agency policies.

ATTACHMENT 1

Borrower Instruction Guide for Funds Transfer

Deposit Messages to Treasury

The following guidelines are provided to assist borrowers in communicating 

information to their banks for preparing a funds transfer deposit message 

using the new format. Both the old and new message formats are shown.

1. Constant items for all borrowers - constant items on the new format are

indicated by the fields which are completed in the example. The constant

items as in the old message format must be entered by your bank on lines

2 and 5. In addition line 6 is now used. Only lines 5 and 6 now require

information to be entered differently than what was previously required.

Your bank must be instructed to show on all transfer deposit messages the

following constant items:

Line 2. The nine-digit Treasury Department Code, "021030004", and Type

 Code, "10", should appear on this line in the appropriate 

 fields as shown.

Line 5. This line must show "TREAS NYC/CTR/". The only space on this

line is after "TREAS".

Line 6. This line must show "BNF=/AC-12310100 OBI=". The only space

 on this line is after "12310100".

2. Third Party Information - Third party information must follow the "OBI="

without a space. An example of a completed field which includes third

party information as it would appear on a message is as follows:

BNF=/AC-12310100 OBI=USDA REA 

REA REF#2l8059 ABC RURAL ELEC COOP DANVILLE VA 

PAYMENT ON FFB INSTAL DUE 12/31/89

3. The rema1n1ng fields on the funds transfer deposit message are provided by

your bank.
ATTACHMENT 2

OLD FORMAT

1

2

TO

 021030004

TYPE

10

3

FROM REF AMOUNT

4

ORDERING BANK AND RELATED DATA

5 TREAS NYC/(12310100) USDA REA

6

7

8

MESSAGE ACKNOWLEDGEMENT

NEW FORMAT

1

2

TO

 021030004

TYPE

10

3

FROM REF AMOUNT

4

ORDERING BANK AND RELATED DATA

5 TREAS NYC/CTR/

6 BNF=/AC-12310100 OBI=

7

8

MESSAGE ACKNOWLEDGEMENT

☼ U.S. Government Printing Office : 1989 – 241 – 783/80492


UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Electrification Administration

September l, 1982

SUBJECT: Bulletin 20-9:320-12, Loan Payments and Statements

TO: REA and RTB Borrowers

Attached are revised pages 1 thru 14 of Bulletin 20-9:320-12. The purpose of 

this revision is to implement the new policy requiring REA and RTB borrowers 

to make monthly debt service payments for all loans approved on or after 

September 1, 1982. Existing loans will continue to be billed on a quarterly 

basis unless the borrower agrees to a monthly billing cycle.

The following sections of Bulletin 20-9:320-12 have been revised to reflect 

monthly billing:

Section 2.5 Billings

Section 3.2 Provisions of REA, RTB and FFB Notes

Section 5.3 Advances After the Basis Date

Section 9.1 Billing Cycles

Section 9.3 Statements Furnished

Harold V. Hunter 

Administrator

UNITED STATES DEPARTMENT OF AGRICULTURE

Rural Electrification Administration

September 1, 1982

Supersedes 12/18/80

REA BULLETIN 20-9 (Electric)

REA BULLETIN 320-12 (Telephone)

SUBJECT: Loan Payments and Statements

1. Purpose: This bulletin presents the following information on REA 

policies, requirements and procedures for loan advances, debt service 

computations and payments, and loan account statements on loans serviced 

by REA:

Table of Contents

1. Purpose 1

2. Definition of Special Terms 2

3. Notes

3.1 General 4

3.2 Provision of REA, RTB and FFB Notes 4

3.3 Computation of Interest 5

3.4 Basis Date Agreement – REA and RTB Notes 5

4. Maturity Date Extension - FFB

4.1 Regular Extension of Short Term Maturity Date 7

4.2 Early Extension of Short Term Maturity Date 7

5. Advances

5.1 General 8

5.2 Advances by TFCS/FRCS 8

5.3 Advances After the Basis Date 8

6. Computed Periodic Installments 9

7. Application of Payments

7.1 Payments Received for Amounts Due on REA, RTB

 and FFB Notes 9

7.2 Overpayments, Prepayments and Special Payments 10

8. Advance Payments – RETRF Only 11

9. Billing Cycles and Statements Furnished

9.1 Cycle Plan 12

9.2 Account Numbers 13

9.3 Statements Furnished 13

Exhibits (see page 15 for listing)
2

Bulletin 20-9: 320-12

2. Definition of Special Terms:

2.1 Advances: Loan funds disbursed by REA from the Rural Electrification 

and Telephone Revolving Fund {RETRF), Rural Telephone Bank (RTB), or 

Federal Financing Bank (FFB) on a note executed by a borrower. These 

funds are advanced on request of a borrower and approved by REA or 

RTB.

2.2 Amortization Period: The period of time, beginning at a basis date 

and extending to a maturity date, during which equal periodic 

installments covering interest and principal become due and payable 

under the terms of a note. This period is also known as a "post basis 

period".

2.3 Basis Dates: The specified times in a note as of which the equal 

periodic installments are computed.

2.31 Pre Basis Period: The period of time between the date of a note 

and its basis dates when only interest is due and payable.

2.32 Post Basis Period: The period of time between the basis dates 

and the maturity date when interest and principal installments 

are due and payable. This is also called the amortization 

period.

2.4 Basis Date Agreement: An agreement between a borrower and REA and or 

RTB amending the terms of a note with respect to the unadvanced 

balance of the note as of the date of the agreement.

2.5 Billings:

2.51 Cycle Plan: A plan for equalizing the debt service workload of 

REA throughout the year, applies to all loans approved prior to 

September 1, 1982. Under this plan the quarterly Statement of 

Interest and Principal Due and Statement of Loan Account and 

Transactions are sent to approximately one-third of the RETRF and 

RTB borrowers each month. All statements to borrowers on FFB 

loans guaranteed by REA are included in Cycle 3.

2.52 Monthly: Applies to all loans approved on, or after, September 1, 

1982. Under this plan a monthly Statement of Interest and 

Principal Due will be sent to all RETRF and RTB borrowers. 

Borrowers with loans approved both prior to and after September 1, 

1982, will receive (1) one consolidated bill in those months

their regular quarterly installment is due, (2) a bill for loans 

approved on, or after, September l, 1982, the other two months of 

each quarter, and (3) a Statement of Loan Account and 

Transactions showing all activity for the quarter on a cycle plan 

basis. Borrowers who only have loans subject to monthly billing 

will receive a Statement of Loan Account and Transactions after 

the end of each calendar quarter.

NOTE: Borrowers may elect to have loans approved prior to September 1, 

1982, billed on a monthly basis.
3

Bulletin 20-9: 320-12

2.6 Effective Amount of Note: The principal amount stated in a note 

reduced by any credits resulting from such transactions as a 

rescission of a loan or portion thereof or transfer of property by 

assumption of indebtedness.

2.7 Extension or Section 12 Agreement: An agreement between the borrower 

and the Administrator extending the time of payment of principal 

and/or interest on a loan under authority of Section 12 of the Rural 

Electrification Act (RE Act), as amended.

2.8 Interest:

2.81 Current Interest: Interest which is payable periodically as it

accrues.

2.82 Accumulated (Deferred) Interest: Interest which was allowed to 

accumulate up to and including the basis date of notes covering 

loans approved prior to June 5, 1957. The accumulated interest 

is due and payable in equal periodic installments over the 

remaining life of the notes.

2.9 Other Definitions:

2.91 Loan Rescission: The rescinding of a loan, or part thereof, by 

the REA Administrator or RTB Governor.

2.92 Maturity Dates for Notes Payable to FFB Guaranteed by REA:

a. Short Term Maturity Date: A date which shall be not less 

than two (2) years from the date of an advance or an 

extension and not more than seven (7) years after the date of 

an advance.

b. Long Term Maturity Date: A date thirty-four (34) years after 

the end of the calendar year in which the advance was made.

c. Maturity Date Extension: The extension of a short term 

maturity date.

2.93 Notes:

a. General: "Notes" includes notes, bonds and other promises to 

pay borrowed money such as basis date agreements and Section 

12 agreements under the RE Act.

b. Assumption Note: A note covering the amount of obligation 

assumed in connection with a transfer of property from one 

borrower to another.

c. Refunding Note: A note executed in exchange for, and to 

refund, a note previously executed. Such notes usually cover 

the unpaid and unmatured principal on the original note.
4

Bulletin 20-9: 320-12

2.94 Payments:

a. Debt Service Payment: A scheduled payment of interest and/or 

principal in accordance with the terms of the note.

b. Advance Payment: A voluntary unscheduled payment made by an 

RETRF borrower and credited to its advance payment account to 

be applied later to the unpaid principal or interest due on 

an REA note.

c. Prepayment: A voluntary unscheduled payment applied directly 

to the principal of a note.

d. Special Payment: A payment required under a provision of a 

loan contract, mortgage, note, agreement, approval for sale 

of a capital asset, or other document and applied in 

accordance with the terms of the document.

3. Notes:

3.1 General:

3.11 Loan contracts, amending loan contracts or amendments to loan 

contracts, approved after December 31, 1980, will require the 

borrower to make debt service payments exceeding $10,000 by 

electronic funds transfer, utilizing the Treasury Financial 

Communications System/Federal Reserve Communications System 

(TFCS/FRCS} (see Exhibit N}.

3.12 One note will usually be made for the full amount of the loan and 

will be sent to the borrower with the loan contract and other 

documents for execution and return to REA. If the initial note 

does not cover the full amount of an RETRF or RTB insured loan, 

the borrower should request REA to forward the next note for 

execution at least 60 days before the amounts covered by existing 

notes will be fully advanced.

3.13 When circumstances warrant, notes will be prepared with special 

conditions such as shorter maturity dates and pre basis periods.

3.14 When loans to be evidenced by more than one note require approval 

of a regulatory body, such approval should be obtained for all 

notes at the time the borrower obtains approval of the loan.

3.2 Provisions of REA, RTB and FFB Notes:

3.21 REA and RTB Notes:

a. Notes covering RETRF insured loans will generally provide for

(1) a term of 35 years, (2) interest at the rate of 5 or 2 

percent per annum to be due and payable as specified in the 

note (monthly or quarterly) as it accrues, and (3) amortization 

of principal to begin three years from the date of the note 

(see Exhibit J).
5

Bulletin 20-9: 320-12

b. Notes covering RTB loans will generally provide for (1) a

term of 35 years, (2) interest at the “cost of money rate” to 

be due and payable as specified in the note (monthly or 

quarterly) as it accrues, and (3) amortization of principal 

to begin three years from the date of the note. The “cost of 

money rate” is the average cost of money to RTB as determined 

by the Governor, but not less than 5 percent per annum. The 

RTB interest rate, determined by the Governor, applies to all 

RTB loans approved during the specified period, usually a 

calendar quarter (see Exhibit K}.

3.22 FFB Notes Guaranteed and Serviced by REA:

a. FFB notes guaranteed by REA shall bear interest at rates 

established by FFB as provided in the FFB Note (see 

Exhibit L).

b. Schedule of Estimated Advances on FFB Note Guaranteed by REA, 

REA Form 152, should be submitted with each note executed by 

the borrower (see Exhibit M). REA will request the borrower 

to submit a revised estimate as needed.

c. FFB notes permit the borrower to select the maturity date for 

repaying each advance. At the time of the advance, borrowers 

may select (1) a short term maturity date of from two years 

to seven years after the date of the advance or (2) a long 

term maturity date of thirty-four years after the end of the 

calendar year in which the advance was made. Borrowers which 

select a short term maturity date may select (a) additional 

short terms of at least two years, as long as the selected 

additional maturity dates are not later than seven years 

after the date of the initial advance, or (b) a long term 

maturity date of thirty-four years after the end of the 

calendar year in which the advance was made. Maturing short 

term advances must be converted to long term {or repaid) if 

more than five years have passed since the date of the 

original advance (see Exhibit L}.

d. The interest rate applicable to each advance or extension of 

maturity date on FFB notes is determined at the time of the 

advance or extension in accordance with the terms of the note 

(see Exhibit L).

3.3 Computation of Interest:

3.31 On REA and RTB notes, interest is computed on the unpaid 

principal balance for the actual number of days the balance is 

outstanding. Interest credit will be allowed for early payments 

and additional interest charged for late payments. These 

interest adjustments are reflected in the next billing. (See 

Exhibit A, examples 2 and 4.) For computation of interest

savings on balances in the Advance Payment Account see Exhibit A, 

example 6.
6

Bulletin 20-9: 320-12

NOTE: No interest credit or additional interest charge will be 

made on final payments of $1.00 or less.

3.32 On FFB notes interest is computed on the unpaid principal balance 

for the actual number of days the balance is outstanding. Under 

the guarantee agreement with FFB, REA is required to pay all 

installments on the due date or the first succeeding workday when 

the due date is a Saturday, Sunday or holiday. Accordingly, when 

the borrowers’ installment is not received by the due date, REA 

will bill the borrower for the amount paid by REA, plus

interest. Interest is computed on the amount paid by REA for the 

actual number of days outstanding at the same interest rate(s) as 

the related FFB advance(s).

NOTE: Interest credit is not allowed for an early principal 

payment.

3.4 Basis Date Agreement - REA and RTB Notes:

3.41 Notes which are not fully advanced by the second basis date of 

the note (generally six years after the date of the note) will 

require a basis date agreement before the unadvanced balance may 

be advanced except as provided in Section 5.3.

3.42 If the amount of a note has not been advanced in full by 45 days 

prior to its latest basis date, REA will prepare and send to the 

borrower a proposed basis date agreement. This proposed 

agreement will be dated the workday following the last basis date 

of the note.

3.43 A basis date agreement establishes a new basis date and maturity 

date for any amount unadvanced as of the date of the agreement. 

The agreement will usually carry the same terms as the note it 

amends.

3.44 Before executing the proposed basis date agreement, the borrower 

should determine that the unadvanced funds:

a. are still needed for approved loan purposes;

b. have not been and will not be requisitioned at least 10 days 

before the current basis date; and

c. are expected to be requisitioned before the basis date of the 

proposed agreement.

3.45 The proposed basis date agreement should be returned unexecuted 

if it is determined that the unadvanced funds:

a. are no longer needed. (The borrower should forward a 

certified copy of the Board Resolution requesting that such 

unadvanced funds be rescinded.)
7

Bulletin 20-9: 320-12

b. will be advanced before the last basis date of the existing 

note. (They should be requisitioned at least 10 days before 

the current basis date.)

c. will be needed but not until after the basis date of the 

proposed agreement. (Execution of an agreement as of some 

future date will be considered based on the borrower's 

justification.)

4. Maturity Date Extensions - FFB:

4.1 Regular Extension of Short Term Maturity Date:

4.11 Notification to Borrower: REA will send an original and copy of 

a maturity date extension letter (see Exhibit G) to the borrower 

approximately sixty days prior to the short term maturity date of 

an advance.

4.12 Borrower Notification to REA: The borrower should complete the 

extension letter, date, sign and return the original copy to REA 

at least 20 days prior to the maturity date.

4.13 Billing on Maturity Date Extension:

a. Maturity Bill: REA will send a Statement of Interest and 

Principal Due, REA Form 695 (see Exhibit E, page 3), for each 

account about fourteen days prior to the maturity date. The 

bill shows the interest accrued through the maturity date, 

the unpaid principal and the following notation, IF MATURITY 

DATE IS TO BE EXTENDED, PAY INTEREST ONLY

b. Supplemental Bill: When the extension of the maturity date 

occurs in the month in which a regular quarterly installment 

is due, a "Supplemental Bi11” wi11 be prepared. The bi11 

covers current interest due from the extension date thru the 

end of the billing period at the new interest rate.

4.2 Early Extension of Short Term Maturity Date:

4.21 A borrower may request an early extension of any FFB advance with 

a short term maturity date (7 years or less from date of advance) 

to a long term maturity date (34 years after the end of the 

calendar year in which the advance was made). Approval should be 

requested through the appropriate division or area office, via 

telephone, five working days prior to the requested date of the 

extension. A letter (see Exhibit I, page 1) transmitting the 

required information must be mailed to REA on the same day the 

request is made. The FFB will treat an early extension as a 

prepayment for purposes of computing a price. Therefore, in 

consideration of such an extension, FFB will require a borrower 

to pay a sum representing:

a. The difference between the face amount of the advance or 

advances being extended, and a price on such advance which
8

Bulletin 20-9: 320-12

will result in a yield for a period from the date of early 

extension to the stated maturity date equal to the U.S. 

Treasury new issue rate for a comparable period. The price 

will be computed by FFB as of the close of business the day 

prior to the extension date (if the price is less than the 

face amount, the difference will be applied against accrued 

interest).

b. Accrued interest on the advance to the effective date of the 

extension.

4.22 Since the exact amount to be paid FFB is not known until the day 

prior to the effective date of an extension, REA will notify the 

borrower by phone of the amount to be paid. All payments must be 

transferred to REA on or before the extension date via the 

TFCS/FRCS (Exhibit N). The Agency Accounting Branch, Accounting 

and Auditing Division will answer questions concerning the above 

procedures. See Exhibit I, pages 3 and 4 for formula to be used 

in calculating the estimated premium or discount.

5. Advances:

5.1 General: RETRF and RTB advances will be made on the oldest note, 

unless otherwise restricted. FFB advances will be made on the note 

designated by the borrower. All advances are made in multiples of

$1,000

5.2 Advances by TFCS/FRCS: Advances on FFB notes guaranteed by REA and on 

borrower's request advances of $500,000 or more on RETRF and RTB notes 

will be made by TFCS. The following information is required by REA to 

advance funds by TFCS:

5.21 Name and address of borrower's bank.

5.22 If borrower's bank is not a member of the Federal Reserve System, 

the name and address of its correspondent bank who is a member of 

the Federal Reserve system.

5.23 American Bankers Association (ABA) nine digit identifier of the 

receiving bank (routing number and check digit).

5.24 Borrower's bank account title and number.

5.25 Any other necessary identifying information.

5.3 Advances After the Basis Date: An advance may be permitted after the 

last basis date on a note without execution of a basis date agreement 

if:

5.31 The amount unadvanced at the basis date is small (generally 2 

percent or less on notes of more than $50,000 and $1,000 or less 

on smaller notes); and
9

Bulletin 20-9: 320-12

5.32 The letter requesting the advance and the requisition are signed 

by the borrower's president or other authorized official; and

5.33 The advance covers the entire unadvanced balance of the 

particular note.

NOTE: In making a request for an advance without a basis date 

agreement, the borrower should realize that (1) installments (monthly 

or quarterly) computed at the basis date will not be sufficient to 

amortize the unpaid principal by the maturity date, and (2) the final 

payment due on the particular note may be considerably larger than the 

regular installment (monthly or quarterly).

6. Computing Periodic Installments:

6.1 The amount of the fixed periodic installment on REA and RTB notes is 

computed as of the basis date. The unpaid principal balance at that 

date is multiplied by the amortization rate stated in the note to 

arrive at the periodic installment covering interest as it accrues and 

the amortization of principal (see Exhibit B).

6.2 The periodic installments on FFB advances having a maturity date later 

than seven years after the date of the advance (long term maturity 

date) will be computed as outlined in Section 4 of the FFB note (see 

Exhibit L).

7. Application of Payments:

7.1 Payments Received for Amounts Due on REA RTB and FFB Notes:

7.11 On or Before the Due Date: These payments will be applied in the 

following order beginning with the oldest note:

a.To current interest due on all notes,

b.To accumulated interest due on all notes (REA only),

c.To principal due on all notes, and

d.To the advance payment account(s) (REA only).

7.12 After the Due Date: These payment on REA and RTB notes will be 

applied in the following order:

a.To the unpaid installments (REA and RTB only).

b.To the advance payment account (REA only).

Note: When the payment is insufficient to pay the entire 

installment, it will be applied as stated in Section 7.11 

above. See Section 8.6 for application of RETRF advance 

payments.
10

Bulletin 20-9:320-12

7.2 Overpayments, Prepayments and Special Payments:

7.21 REA Notes:

a. Overpayment: Overpayment of an amount due generally will be 

applied to an advance payment account. However, if there is 

no balance in the advance payment account, and the 

overpayment is $1,000 or less, it will be applied to the 

principal balance on the oldest note.

b. Application of Other Payments: Payments representing 

proceeds from the sale of property and special payments made 

pursuant to a loan contract or mortgage provision will be 

applied as specified in the approval to sell property, 

contract, mortgage, or applicable REA bulletin. It is the 

responsibility of borrowers with concurrent loans to 

apportion and remit all prepayments in accordance with the 

terms of the common mortgage.

Note: There are no premiums or discounts for prepayments and/or 

special payments on REA notes.

7.22 RTB Notes: Special payments and prepayments are applied directly 

to the note. There is a prepayment premium which is explained in 

the RTB Note (see Exhibit K). Sample computations are provided 

in Exhibit A, Part B.

7.23 Prepayments of FFB Short Term Advances:

a. Any FFB advance with a short term maturity date (two to seven 

years) can be prepaid in whole or in part at any time prior 

to the maturity date with the approval of REA and FFB. 

Approval should be requested through the appropriate division 

or area office, via telephone, five working days prior to the 

requested date of prepayment. A letter (see Exhibit I,

page 2) transmitting the required information must be mailed 

to REA on the same day the request is made.

b. In consideration of the prepayment FFB will require a 

borrower to pay a sum representing:

(1) The difference between the face amount of the advance 

(or advances) being prepaid, and a price on such advance 

which will result in a yield for a period from the date 

of prepayment to the stated maturity date equal to the

U.S. Treasury new issue rate for a comparable period. 

The price will be computed by FFB as of the close of 

business the day prior to the prepayment date (if the 

price is less than the face amount, the difference will 

be applied against accrued interest).

(2) Accrued interest on the advance to the date of the 

prepayment.
11

Bu11etin 20-9:320-12

c. Since the exact amount to be paid FFB is not known until the 

day prior to the effective date of a prepayment, REA will 

notify the borrower by telephone of the amount to be paid. 

All payments must be transferred to REA on or before the 

prepayment data via TFCS/FRCS (Exhibit N). The Agency 

Accounting Branch, Accounting and Auditing Division will 

answer questions concerning the above procedures. See 

Exhibit I, pages 3 and 4 for formula to be used in 

calculating the estimated premium or discount.

7.24 Prepayments of FFB Long Term Advances:

a. No prepayment of principal may be made on FFB notes until 

twelve years after the end of the calendar year in which the 

advance was made. After that date there is a prepayment 

premium. Sample computations are provided in Exhibit A, 

Part B.

b. The provisions for making prepayments and the prepayment 

premiums are set forth in paragraph 9 of the FFB note (see 

Exhibit L).

8. Advance Payments - RETRF Only:

8.1 General: Advance payment accounts will be maintained only for RETRF 

borrowers. Advance payment accounts will not be maintained for RTB or 

FFB borrowers.

8.2 Establishing 2 and 5 Percent Advance Payment Accounts: As applicable, 

separate advance payment accounts will be established for each 

borrower, one receiving interest credits at 2 percent and another 

receiving interest credits at 5 percent. Advance payments may be used 

to pay interest and principal installments as they become due or as a 

prepayment on a note at the request of a borrower.

8.3 Crediting Advance Payments Received:

8.31 Advance payments received after December 31, 1976, will be 

credited to the 5 percent advance payment account, provided this 

does not cause the balance in this advance payment account to 

exceed the unpaid principal balance of notes bearing 5 percent 

interest.

8.32 Advance payments in excess of the unpaid principal balance of 5 

percent notes and advance payments from borrowers with only 2

percent notes will be credited to the 2 percent advance payment 

account provided that the amount is over $1,000 and does not 

cause the amount in such account to exceed the unpaid principal 

balance of 2 percent notes.

Note: Advance payment accounts will not be established when the total 

amount in the 2 and 5 percent advance payment accounts will not total

$1,000.
12

Bulletin 20-9:320-12

8.4 Advance Payments Received in the Month in Which Installment is Due:

Payment received in the month in which an installment is due will be 

applied to the installment due. However, if the regular installment 

payment is received at a later date in the month, the first payment 

received will be applied retroactively to an advance payment account 

and the second will be applied to the installment due.

8.5 Interest Credit to Advance Payments:

The amount of interest credits on advance payments will reduce the 

interest charges on the notes and is shown on Statement of Interest 

and Principal Due, REA Form 694 (see Exhibit E, page 2). Since the 

periodic installments are established by the terms of the notes, the 

interest credits cannot serve to change the total amount of each 

installment; therefore, an amount equal to the interest credits is 

added to the principal installment due. On receipt of the full 

installments, amounts equal to the interest credits (the principal 

offsets) are added to the respective advance payment accounts.

8.6 Application of RETRF Advance Payments:

All or part of the amounts in the advance payment accounts are 

available for subsequent application as follows:

8.61 To the payment of a maturing installment on REA notes.

a. If the installment is not received by its due date, the funds 

in the 2 percent advance payment account will be applied 

before applying any of the funds in the 5 percent advance 

payment account, provided that this application does not 

cause the balance in the 5 percent advance payment account to 

exceed the unpaid principal balance of the 5 percent notes.

b. Application from the advance payment accounts will be made as 

of the installment due date beginning with the oldest note; 

first, to current interest due on all notes; second, to the 

accumulated interest due, if any, on all notes; and third, to 

the principal due on all notes (see Section 7.11).

8.62 On the borrower's written instructions, as a "prepayment" to any 

of its REA notes. If the request is from an electric borrower 

with a concurrent loan, it is the borrower's responsibility to 

make direct payments to the concurrent lender in proportionate 

amounts in accordance with the terms of the common mortgage.

Note: Advance payment accounts with combined balances totaling

$1,000 or less for three consecutive months, will be closed out 

by applying the amount to the outstanding balance of the oldest 

note or notes, unless otherwise requested by the borrower.

9. Billing Cycles and Statements Furnished:

9.1 Billing Cycles: REA uses various billing plans:
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9.11 Cycle Plan: For all loans approved prior to September 1, 1982, 

REA uses a cycle plan for RETRF and RTB borrowers to equalize the 

workload throughout the year in preparing statements and 

equalizing payments on loans (see Exhibit C).

9.12 Monthly Billing: All REA or RTB loans approved on, or after, 

September 1, 1982, are billed each month.

9.13 FFB Billings: FFB borrowers are billed at the end of each 

calendar quarter.

9.2 Account Numbers (Exhibit D):

9.21 RETRF: A separate five digit alphameric account number is 

assigned to each REA note and to each amendment. On notes 

providing for two basis dates, a new account is established and 

number assigned, for any unadvanced balance at the end of the 

first basis date. Two accounts are established for each REA note 

that covers the total amount of a concurrent loan with concurrent 

lenders other than RTB. The first account covers the portion to 

be advanced by RETRF before the concurrent lender is required to 

advance its funds, and the second account covers the remaining 

portion of the concurrent RETRF loan. On concurrent RETRF loans 

with RTB, only one account is established as the full amount of 

the RTB loan is advanced before any portion of the RETRF loan.

9.22 RTB: A separate four digit alphameric account number is assigned 

to each RTB note and to each amendment. On notes providing for

two basis dates, a new account is established for any unadvanced 

balance at the end of the first basis date.

9.23 FFB:A separate five digit alphameric account number is assigned 

to each advance on FFB notes.

9.3 Statements Furnished: The following statements are furnished to 

borrowers:

9.31 Statement of Interest and Principal Due:

a. REA Form 694 (Exhibit E, page 2) for RETRF/electric and 

telephone borrowers.

b. RTB Form 1 (Exhibit E, page 2) for RTB borrowers.

c. REA Form 695 (Exhibit E, page 3) for FFB borrowers.

These statements show the due date, the total amount due, and 

a breakdown of the amount due between principal and

interest. They are furnished to borrowers about the 15th of 

the month in which the installment payment is due. In order 

to prepare these statements for mailing about the 15th of the 

month in which the installment is due, a cutoff date has been

established as of the end of the previous month. Consequently, 

for RETRF and RTB the interest due on loan advances or
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interest credits on payments received during the month in 

which the installments become due are included in the next 

statement. An exception is made when an advance is made or a 

special payment is received on an account which enters the 

principal repayment period (basis date) during that month.

In the latter case, the installment (monthly or quarterly) is

computed as of the basis date and a supplemental statement is 

prepared for the adjusted installment. For FFB, the interest 

due on loan advances made during the month in which an 

installment is due is included in the next statement; however, 

no interest credit is allowed for early payment.

9.32 Statement of Loan Account and Transactions for Three Month Period 

Ending (date):

a. REA Form 696 (Exhibit F, page 3) for RETRF electric and 

telephone borrowers.

b. RTB Form 13 (Exhibit F, page 4) for RTB borrowers.

c. REA Form 697 (Exhibit F, page 5) for FFB borrowers.

These statements are mailed to borrowers quarterly, as 

follows:

(1) RETRF and RTB borrowers who are billed under the 

quarterly or quarterly and monthly billing system will 

receive a statement approximately two weeks after the 

end of the cycle quarter.

(2) RETRF and RTB borrowers who have all loans billed each 

month will receive a statement approximately two weeks 

after the end of each calendar quarter.

(3) FFB borrowers will receive a statement approximately 

two weeks after the end of each calendar quarter.

Harold V. Hunter 

Administrator

Index:

ACCOUNTING:

Loan Account Computations 

 and Statements

ADVANCES:

Loan Advances to Borrowers

ADVANCE PAYMENTS:

 Application of 

INTEREST:

Computations and Loan Account Statements

LOANS:

Loan Account Computations 

 and Statements

NOTES:

Interest Computations and

 Loan Account Statements