WTS Will Stop Charging Interest on Loans (page 5)

blondie

Because the congregations are set up as non-profit corporations, when they pay off their loan, the congregation who holds the territory the kingdom hall is located on holds ownership. The WTS would take ownership as a parent non-profit corporation if that congregation were to be dissolved. That's the way the laws governing non-profit corporations works.

Gayle

I suspect new Kingdom Hall builds will slow down quite a bit now. Then the WTS will blame the rank and file that it is their fault for not donating enough.

Witness 007

Trying to cover their legal butt.....what about the bible saying don't charge your brother interest.....Hypocrites!

watson

Sounds to me like someone is jockeying for the equity in the Halls. A powerful bit of change involved. Who owns the buildings? The sooner the principle is paid down the better for the org.

Speculation: The timing for this announcement is interesting. The IRS [Internal Revenue Service here in the US (the tax collectors)] just clarified a whole bunch of regulations relating to non-profits (effective March 28, 2008).

My musing was that they would NEVER give up an advantage like collecting interest without an even better reason/advantage. Perhaps (again just speculating) it has to do with not wanting government regulators snooping into their stuff?? Sort of like the reasoning behind discontinuing a specific "charge" for the literature was linked to a Sales Tax judicial decision.....

My two cents...

----Dan

BluesBrother

In my day the congregation owned the Hall. We selected three faithful men to be trustees, who legally held the Hall as trustees for the xxxx Cong of J W's...Now I understand that the halls are "deeded to the Society". So legally the brothers do not own it despite sinking their hard earned savings into it .

In the past the cong could arrange a bank loan for repair/improvements if they could persuade a bank to give them one, secured on the Hall.

If they do not own it, and if the cash flow from The Society dried up, What could they do for funds if needed?

MeneMene

Farkel & blondie - thanks for the info. That's something that I had wondered about.

MitMit

(Luke 6:34-35) . . .Also, if YOU lend [without interest] to those from whom YOU hope to receive, of what credit is it to YOU? Even sinners lend [without interest] to sinners that they may get back as much. 35 To the contrary, continue to love YOUR enemies and to do good and to lend [without interest], not hoping for anything back; and YOUR reward will be great, and YOU will be sons of the Most High, because he is kind toward the unthankful and wicked. For Many Years I wondered WHY they Charged a Brother Interest.

DaCheech

mit good post..........

as i have written, i could not fathom charging my brother interest, or mom.

they are EVIL

Mary

Wow! This must be 'new light' from Jehovah!! Actually, the principal not to charge your brothers interest is only a few thousand years old:

Exodus 22:25: " If you should lend money to my people, to the afflicted alongside you, you must not become like a usurer to him. YOU must not lay interest upon him."

Deuteronomy 23:19-20: "You must not make your brother pay interest, interest on money, interest on food, interest on anything on which one may claim interest. You may make a foreigner pay interest, but your brother you must not make pay interest; in order that Jehovah your God may bless you in every undertaking of yours on the land to which you are going so as to take possession of it."

Makes you wonder what took them so long to catch on. Anyway, h ere's a blurb from the April 1985 Kingdom Ministry that explains how the 'funding' is (or was) done. Note that it clearly tells you that when you contribute to the 'Kingdom Hall Fund", the Society views it as a "contribution" (most likely to avoid having to pay taxes), yet it's not considered a "gift" to any congregation---it's viewed as a business deal, which is how they justified not only charging interest, but from screwing over each congregation. Since every congregation would have been contributing to the KHF, basically they have to repay money that they've already donated, but interest charges as well!!

The Society Kingdom Hall Fund operates as a "revolving fund." That is, contributions received are put into an account that is used solely for making loans to assist congregations in the United States in financing their Kingdom Hall projects. While the moneys received are viewed as contributions to the Society Kingdom Hall Fund, they do not become a "gift" to complete a single Kingdom Hall project. Rather, the money loaned to congregations must be repaid. As this is done the accumulated repayments, along with continuing contributions from the congregations, are loaned to still other congregations for their building projects.

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The costs of administering the fund, such as correspondence, legal details, banking, are all cared for by the Society. Therefore, each dollar contributed to the Society Kingdom Hall Fund is used exclusively for the purpose of providing funds for the loan pool to assist congregations.
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These loans are repaid to the Society Kingdom Hall Fund with interest at the rate of 6 percent. Why charge interest? Basically, the small amount of interest that is being charged serves to protect the contributions from inflation. Each year inflation erodes the purchasing power of every dollar, and the cost of building Kingdom Halls rises. The interest paid thus allows the Society Kingdom Hall Fund to maintain its potential for assisting congregations now and in the future.

WTS Will Stop Charging Interest on Loans