620.1051. Program loss reserve account set aside, amount--certification, transfer of amount--recovery of losses.
Program loss reserve account set aside, amount--certification,transfer of amount--recovery of losses.
620.1051. 1. When a financial institution originates aloan pursuant to sections 620.1045 to 620.1063 to a borrower,such financial institution shall set aside an amount into aprogram loss reserve account. Such amount shall be agreed uponby it and the borrower, and shall not be less than one andone-half percent or more than three and one-half percent of theprincipal of the loan. The borrower shall deposit into theprogram loss reserve account an amount equal to the amount setaside by the financial institution. The financial institutionmay loan the borrower the amount deposited on behalf of theborrower and such amount may be added to the principal of theloan.
2. The financial institution shall certify to thedepartment, on forms prescribed by the department and accompaniedby any documentation required by the department, that suchfinancial institution has made a loan pursuant to sections620.1045 to 620.1063 and has set aside a contribution and hascollected from the borrower and deposited on behalf of theborrower an equal amount into the program loss reserve account.Upon receipt of such certification, the department shall verifythat such certification complies with the provisions of sections620.1045 to 620.1063. The department shall then transfer to thefinancial institution from the Missouri capital access program anamount equal to the combined amounts of the institution and theborrower which have been deposited in the program loss reserveaccount, except that for the first two million dollars in loansmade by the financial institution pursuant to the provisions ofsections 620.1045 to 620.1063, the department shall transfer tothe institution an amount equal to one hundred fifty percent ofthe combined total amount deposited by the institution and theborrower in the program loss reserve account.
3. A financial institution which suffers a loss on any loanmade pursuant to sections 620.1045 to 620.1063 may, uponapplication and providing proof satisfactory to the department,recover from the program loss reserve account its losses, whichmay include principal, up to six months accrued interest and anycollection expenses. If the department approves the financialinstitution's application for recovery provided for by thissubsection, the institution, at the request of the department,shall be required to assign to the department all rights andinterests in such loan for which a recovery was approved. Thedepartment shall then have legal standing to pursue thecollection of such loan.
(L. 1994 H.B. 1248 & 1048 § 3)