[§155-6.5]  Cooperation in loans by thedepartment.  (a)  The department of agriculture, for a fee, may underwriteand service loans for cooperating private lenders and government loan programsproviding loan funds to qualified farmers and qualified food manufacturers. All fees shall be deposited into the agricultural loan reserve fund.

(b)  Loans underwritten or serviced under thissection shall not be subject to the restrictions in section 155-3.

(c)  Loans underwritten or serviced under thissection shall be limited by sections 155-1 and 155-9 to 155-12; provided thatclass "E" loans to food manufacturers shall not be subject to section155-10.  No class "D" and "F" loans shall be underwrittenor serviced under this section.

(d)  Loans underwritten or serviced under thissection shall bear simple interest on the unpaid principal balance charged onthe actual amount disbursed to the borrower.  The interest rate on class"A", "B", "C", and "E" loans shall beat a rate of two per cent above the prime rate or at a rate of eight andone-half per cent a year, whichever is less.  For purposes of this subsection,the prime rate shall be determined on January 1 and July 1 of each year andshall be the prime rate charged by the two largest banks in the State identifiedby the department of commerce and consumer affairs.  If the prime rates of thetwo largest banks are different, the higher prime rate of the two shall apply.

The director of commerce and consumer affairsshall publish a notice statewide pursuant to section 1-28.5 to specify theprime rate.

(e)  For loans underwritten or serviced underthis section, funds shall be disbursed in accordance with rules adopted by thedepartment pursuant to chapter 91.

(f)  The department and the cooperating lendermay charge a filing fee for any application made under this section.  However,the applicant shall pay for any actual expenses incurred.

(g)  The department and the cooperating lendermay mutually agree on underwriting criteria, functions, responsibilities, andfees for loan underwriting and loan servicing, by way of a memorandum ofagreement.  The memorandum of agreement shall be approved by the chairperson ofthe board of agriculture. [L 1999, c 294, §2; am L 2000, c 51, §8]