20-1552. Compensating balances
prohibited
A. Except for commercial checking accounts and normal deposits in support of an
active bank line of credit, a mortgage guaranty insurance company, its holding company or
any affiliate of either such companies shall not maintain funds on deposit with the
lender for which the mortgage guaranty insurance company has insured loans.
B. Any deposit account bearing interest at rates less than what is currently being
paid other depositors on similar deposits or any deposit in excess of amounts insured by
an agency of the federal government shall be presumed to be an account in violation of
this section. A mortgage guaranty insurance company shall not use compensating balances,
special deposit accounts or engage in any practice which unduly delays its receipt of
monies due or which involves the use of its financial resources for the benefit of any
owner, mortgagee of the real property or any interest in such property or any person who
is acting as agent, representative, attorney or employee of such owner, purchaser or
mortgagee as a means of circumventing any part of this section.
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