Rural Electrification Administration Lending Assistance Improvements Act of 1988

Rural Electrification Administration Lending Assistance Improvements Act of 1988 - Amends the Rural Electrification Act of 1936 to limit after September 30, 1988, the Rural Electrification Administration's (REA) authority to guarantee loans to 70 percent for electric distribution and subtransmission facilities and telephone facilities and 80 percent for electric generation and transmission facilities.

Prohibits REA guarantees of loans from any Federal lending agency after such date.

Revises guaranteed loan and direct or insured loan prepayment provisions.

Reduces the maximum amount of funds that a borrower may invest.

Prohibits the REA from insuring loans after such date unless specified findings are made. Bases interest rates on comparable U.S. obligations, with a minimum rate of five percent.

Prohibits the REA from guaranteeing loans after such date to certain metropolitan area borrowers for: (1) recreation purposes; or (2) telephone service improvement if the borrower's gross revenues exceed specified amounts.

Prohibits the issuance of class A stock after September 30, 1988. Requires 51 percent of such stock to be redeemed on September 30, 1995, with the remaining stock redeemed and retired by September 30, 2005.

Repeals the provision creating a telephone bank reserve for losses due to interest rate changes.

Requires the telephone bank to retire all Treasury-held debentures by September 30, 1995. Prohibits the further issuance of such debentures.

Provides for the privatization of the telephone bank.