Magazine article American Banker

Virginia Bank, Marking 20th Year, Offers Home, Car Loans at 1964 Rates

Magazine article American Banker

Virginia Bank, Marking 20th Year, Offers Home, Car Loans at 1964 Rates

Article excerpt

A community bank in Virginia celebrated its 20th birthday recently by offering $1 million in loans at 1964 rates.

Guaranty bank & Trust Co., a $100 million-asset institution in Fairfax, offered the loans on a first-come, first-served basis May 21-25. Because regulations now prohibit advertising add-on rates, the bank could not express the rates as they had been advertised in 1964, but the equivalent rates were the same.

"The idea was the result of putting several heads together," said W.W. Duncan, senior vice president-marketing. "We wanted to do something that would benefit the auto dealers and other merchants in our community, as well as ourselves."

The heads that got together included those of the bank's president and chief executive officer, Ernest M. Carter, and its executive vice president, Jim Newsome.

Two types of loans were available: a three-year, $7,500-maximum auto loan at an average rate of 8.71%, equivalent to the 4.50% add-on of 1964; and a five-year, $15,000-maximum home equity loan at 10.84%, equivalent to the original 6% add-on. All loan payments had to be made by automatic transfers froms a Guaranty checking or saving account.

Before the birthday celebration, 60,000 area residents received letters from the bank with a question on the outside of the envelope: "Would you believe 1964 rates are here again?" The letter contained a loan application form and suggested that an account be opened at Guaranty before the loans were offered to save time later. …

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