§4743 — Title 12 Banks and Banking | U.S. Code

Summary

A State can apply to the Fund to join the Program and to get money back for certain loan insurance costs. To be approved, the State must meet five main requirements: pick one state agency to run the Program; finish the legal steps needed so that agency can run it; set aside at least $1 for every 2 people in the State (based on the most recent decennial census) in a reserve fund that is available without extra legal steps; create a standard participation agreement for banks that fits the Program’s rules; and sign a reimbursement agreement with the Fund. A State that already runs a similar capital access program (with separate reserve funds for each bank) can also apply if it meets the same requirements and certifies that its banks follow section 4744. The Fund will not approve any State until at least $50,000,000 has been appropriated to the Fund. Any changes a State makes to its participation agreement must be reviewed and approved by the Fund before they take effect.

Title 12, §4743

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(a)Any State may apply to the Fund for approval to be a participating State under the Program and to be eligible for reimbursement by the Fund pursuant to section 4747 of this title.

(b)The Fund shall approve a State to be a participating State, if—

(1)a specific department or agency of the State has been designated to implement the Program;

(2)all legal actions necessary to enable such designated department or agency to implement the Program have been accomplished;

(3)funds in the amount of at least $1 for every 2 people residing in the State (as of the last decennial census for which data have been released) are available and have been legally committed to contributions by the State to reserve funds, with such funds being available without time limit and without requiring additional legal action, except that such requirements shall not be construed to limit the authority of the State to take action at a later time that results in the termination of its obligation to enroll loans and make contributions to reserve funds;

(4)the State has prescribed a form of participation agreement to be entered into between it and each participating financial institution that is consistent with the requirements and purposes of this subchapter; and

(5)the State and the Fund have executed a reimbursement agreement that conforms to the requirements of this subchapter.

(c)(1)A State that is not a participating State, but that has its own capital access program providing portfolio insurance for business loans (based on a separate loss reserve fund for each financial institution), may apply at any time to the Fund to be approved to be a participating State. The Fund shall approve such State to be a participating State, and to be eligible for reimbursements by the Fund pursuant to section 4747 of this title, if the State—

(A)satisfies the requirements of subsections (a) and (b); and

(B)certifies that each affected financial institution has satisfied the requirements of section 4744 of this title.

(2)(A)If a State is approved for participation under paragraph (1), each financial institution with a participation agreement in effect with the participating State shall immediately be considered a participating financial institution. Reimbursements may be made under section 4747 11 See References in Text note below. of this title in connection with all contributions made to the reserve fund by the State in connection with lending that occurs on or after the date on which the Fund approves the State for participation.

(B)If an amended participation agreement that conforms with section 4745 of this title is required in order to secure participation approval by the Fund, contributions subject to reimbursement under section 4747 of this title shall include only those contributions made to a reserve fund with respect to loans enrolled on or after the date that an amended participation agreement between the participating State and the participating financial institution becomes effective.

(C)A State that is approved for participation in accordance with this subsection may continue to implement the program 22 So in original. Probably should be capitalized. utilizing the reserve funds accumulated under the State program.

(d)The Fund shall not approve a State for participation in the Program until at least $50,000,000 has been appropriated to the Fund (subject to an appropriations Act), without fiscal year limitation, for the purpose of making reimbursements pursuant to section 4747 of this title and otherwise carrying out this subchapter.

(e)If a State that has been approved to be a participating State wishes to amend its form of participation agreement and continue to be a participating State, such State shall submit such amendment for review by the Fund in accordance with subsection (b)(4). Any such amendment shall become effective only after it has been approved by the Fund.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 4747 of this title, referred to in subsec. (c)(2)(A), was in the original “section 237” and was translated as reading “section 257” meaning section 257 of Pub. L. 103–325, to reflect the probable intent of Congress. Pub. L. 103–325 does not contain a section 237.

§4743 Approving States for participation

Summary

Title 12, §4743

Notes & Related Subsidiaries

Editorial Notes

References in Text

Citations & Metadata