[§211D-6]  Reserve account.  (a)  Onapproval by the department and after entering into a participation agreementwith the department, a participating financial institution making a capitalaccess loan shall establish a reserve account.  The reserve account shall beused by the institution only to cover any losses arising from a default of acapital access loan made by the institution under this chapter or as otherwiseprovided by this chapter.

(b)  When a participating financial institutionmakes a loan enrolled in the program, the institution shall require theborrower to pay to the institution a fee in an amount that is not less than twoper cent but not more than three per cent of the principal amount of the loan,which the financial institution shall deposit in the reserve account.  Theinstitution shall also deposit in the reserve account an amount equal to theamount of the fee received by the institution from the borrower under thissubsection.  The institution may recover from the borrower all or part of theamount the institution is required to pay under this subsection in any manneragreed to by the institution and borrower.

(c)  For each capital access loan made by afinancial institution, the institution shall certify to the department, within theperiod prescribed by the department, that the institution has made a capitalaccess loan, the amount the institution has deposited in the reserve account,including the amount of fees received from the borrower, and, if applicable,that the borrower is an eligible enterprise zone business located in an areadesignated as an enterprise zone under chapter 209E.

(d)  On receipt of a certification made undersubsection (c), the department shall deposit in the institution's reserveaccount for each capital access loan made by the institution:

(1)  An amount equal to the amount deposited by theinstitution for each loan if the institution:

(A)  Has assets of more than $1,000,000,000; or

(B)  Has previously enrolled loans in theprogram that in the aggregate are more than $2,000,000;

(2)  An amount equal to one hundred fifty per cent ofthe total amount deposited under subsection (b) for each loan if theinstitution is not described by paragraph (1); or

(3)  Notwithstanding paragraphs (1) and (2), an amountequal to two hundred per cent of the total amount deposited under subsection(b) for each loan if:

(A)  The borrower is an eligible enterprisezone business located in an area designated as an enterprise zone under chapter209E; or

(B)  The borrower is a small or medium-sizebusiness or a nonprofit organization that operates or proposes to operate achild care facility or adult residential care home. [L 2000, c 290, pt of §2]