National Consumer Cooperative Bank
The National Consumer Cooperative Bank (NCCB) was created and chartered by the National Consumer Cooperative Bank Act (92 Stat. 499, 12 U.S.C.A. 3001), enacted on August 20, 1978. The bank is directed by the act to encourage the development of new and existing cooperatives. The bank provides specialized credit and technical assistance to eligible cooperatives that provide goods, services, housing, and other facilities to their members as ultimate consumers. The bank is itself structured as a cooperative financial institution. Under its congressional charter, the bank is directed to make loans and offer its services throughout the United States, its territories and possessions, and the Commonwealth of Puerto Rico.
The act provided that the federal government would contribute the initial capitalization of the bank through the purchase of the bank's Class A stock. All fifteen membersof the bank's board of directors are appointed by the President of the United States. The act contemplated that the number of presidentially appointed directors was to decrease gradually as borrowers and cooperatives eligible to borrow purchased Class B and Class C stock in the bank.
In 1981 the act was amended by Title III, subtitle C, of the Omnibus Budget Reconciliation Act of 1981 (95 Stat. 433). The Omnibus Budget Reconciliation Act of 1981 converted the federal government's initial capitalization of the bank, formerly represented by Class A stock, into Class A capital notes, held by the secretary of the treasury. The act further mandated that after the Final Government Equity Redemption Date (FGERD), as defined by the National Consumer Cooperative Bank Act, the bank's Class B and C stockholders shall elect twelve of the bank's fifteen directors. The remaining three are appointed by the president with the advice and the consent of the Senate. The president is directed by the act, as amended, to select one member from among proprietors of small business concerns, one member from among the officers of the agencies and departments of the United States, and one member from among persons having extensive experience in the cooperative field representing low-income eligible cooperatives.
The bank is a mixed-ownership government instrumentality governed by its board of directors. It is operated by the board under bylaws and policies it prescribes consistent with the National Consumer Cooperative Bank Act.
The bank's credit and technical assistance to cooperatives is intended to improve the quality and availability of goods and services to consumers. The bank makes loans to eligible cooperatives at prevailing market interest rates.
The bank encourages broad-based ownership, control, and active participation by members in eligible cooperatives. The bank also seeks to maintain broad-based control of the bank by its voting stockholders.
The National Consumer Cooperative Bank Act established the Office of Self-Help Development and Technical Assistance within the bank. Cooperatives that are eligible to receive assistance from the bank may be eligible to qualify for financial and technical assistance from the office. The office may provide financial assistance to newly developed or established cooperatives that cannot qualify for a bank loan, or when the membership of the cooperative consists substantially of low-income persons or it provides services to low-income persons.
The Omnibus Budget Reconciliation Act of 1981 directs that as soon as practicable after the FGERD, the board of directors of the bank shall establish a nonprofit corporation under the laws of the District of Columbia to succeed the office and to carry out the functions of the office. That nonprofit corporation, the Consumer Cooperative Development Corporation, was incorporated on December 30, 1982.
