| (a) Upon execution of a linked deposit agreement and
receipt of funds from the Board, the lending institution shall:
(1) provide collateral as required in this subchapter;
(2) lend the value of the deposit being provided by
the Board substantially according to the terms and conditions of the
draft loan agreement submitted by the lending institution to the executive
administrator;
(3) pay to the Board interest on the deposit at a rate
equal to the asking yield for a U.S. Treasury note with a twelve-month
maturity as of the date five days preceding the submission of all
the documents required of the eligible lending institution to the
executive administrator requesting a linked deposit agreement;
(4) submit compliance reports to the executive administrator
annually providing information on loans made, the performance of the
terms of the loan by the person receiving the loan from the lending
institution, and such other information or documents as specified
in the linked deposit agreement;
(5) return the amount of funds provided as a linked
deposit as specified in the linked deposit agreement; and
(6) perform such other terms and conditions as specified
in the linked deposit agreement, this subchapter, the rules of the
Board, and applicable federal and state law.
(b) A delay in payment or a default on a loan by the
recipient of the loan from the lending institution does not affect
the validity of the deposit agreement or the repayment of the deposit
in accordance with the terms of the deposit agreement.
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