| (a) A financial institution must complete and remit
to the Office a participation agreement, developed by the Office,
to enroll loans under the program.
(b) The participation agreement shall provide for:
(1) the creation of the reserve account by the Office
for the benefit of the participating financial institution;
(2) the limitation of liability of the state of Texas
and the Office to the balance held in reserve of a participating financial
institution;
(3) the terms and conditions of the loans under the
program to be determined solely by agreement of the lender and borrower;
(4) the enrollment of qualified loans into the program;
(5) the deposit of funds by the eligible applicant,
the participating financial institution, and subject to availability
in the fund, the Office, into a reserve account when the participating
financial institution makes an eligible capital access loan;
(6) a claims process for reimbursement of losses incurred
from charge-offs under the program;
(7) removal of money from the reserve account to offset
losses incurred through the program;
(8) disposition of any recoveries from a borrower made
by the participating financial institution subsequent to being reimbursed
by the Office;
(9) conditions for subrogation of the Office, at the
Office's request, to the rights of the participating financial institution
in collateral, personal guarantees, and all other forms of security
for the capital access loan;
(10) conditions for the withdrawal by the Office of
excess balances in the reserve account;
(11) conditions for the withdrawal by the Office of
interest earned within the reserve account;
(12) conditions for termination of the participation
agreement, and disposition by the Office of any remaining balance
in the reserve account;
(13) termination by the Office of the obligation to
enroll eligible borrowers into the program;
(14) withdrawal by a participating financial institution
from the program, and disposition by the Office of any remaining balance
in the reserve account;
(15) periodic reporting to the Office by the participating
financial institution as required by the Office;
(16) inspection by the Office of the pertinent files
of the participating financial institution relating to qualified eligible
borrowers;
(17) transmittal to the Office by participating financial
institution of any public information directly relating to the institution's
participation in the program;
(18) the submission of an annual report by the participating
financial institution to the department containing the information
required by Chapter 481, Subchapter BB, §481.411;
(19) the delivery of financial statements of the financial
institution as available for the previous three years to the department;
(20) such other terms and conditions as may be required
by the department.
(c) The department, based on the information provided
by the financial institution, reserves the right to not allow an institution
to participate in the program.
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