| (a) The comptroller shall review completed applications from the Authority and notify the Authority of their decision to accept or deny the application. (b) The Authority will notify the lender if the application has been accepted or denied. (c) The comptroller will inform the lender of the amount of the required collateralization of the linked deposit. The Authority will forward written notice that the lender has requested funding to the comptroller. The comptroller will wire the linked deposit to the lender in immediately available funds the same day, provided written notice of funding of the loan is received by 9:00 a.m. The comptroller will then provide the Authority confirmation of the linked deposit. (d) The comptroller shall determine the terms and conditions of the linked deposit once the maturity date is established (it cannot be set beyond the end of the biennium in which the linked deposit is placed), the applicable interest rate for the linked deposit can be determined by referring to the United States treasury bill or note section of the current issue of the Wall Street Journal corresponding with the day the loan is priced. The maturity date is matched to the closest treasury bill maturity. If longer than a year, it is matched to the treasury note with the maturity closest to the linked deposit maturity. In the case of a multiple maturity listing, the maturity with the lowest yield to arrive at the linked deposit rate should be used. (e) An applicant may reapply for participation in the program after rejection of an application if the application complies with the standards set forth in these sections and under the Act. (f) A lender shall terminate the linked deposit if the loan is prepaid. Quarterly principal reductions of $1,000 or more will result in a corresponding reduction of the linked deposit in a like amount (rounded to the nearest thousand) at the end of each quarter ending in November, February, May, and August. Upon completion of the quarterly review by the comptroller and the Authority, the linked deposit will be adjusted to the outstanding principal balance rounded to the nearest thousand dollars. (g) If a lender ceases to be a state depository, the comptroller shall withdraw the linked deposits. If the lender, which has a linked deposit, is purchased by another lending institution, the linked deposit will be reissued to the purchasing institution. Should the linked deposit loan not be obtained by the purchasing institution, then the linked deposit will be returned to the comptroller. The Authority and the comptroller will allow the borrower 90 days to place the loan with another lender. (h) A late payment on a loan by an eligible borrower does not affect the validity of the linked deposit through the period of the fiscal biennium. Should an eligible borrower default on a loan and the lender proceed with collection by foreclosure, the linked deposit must be returned to the comptroller. |
