State Codes and Statutes

Statutes > Utah > Title-07 > Chapter-17 > 7-17-3

7-17-3. Lender to pay interest -- Exceptions -- Service charges prohibited.
(1) Except as provided in Subsection (2), each lender requiring the establishment orcontinuance of a reserve account in connection with an existing or future real estate loan shall, ona yearly basis as of December 31, calculate and credit to the account interest on the average dailybalance of funds deposited in the account at a rate equal to:
(a) 5-1/2%;
(b) the average of the 11th District monthly weighted average cost of funds index ascalculated and published by the Federal Home Loan Bank of San Francisco during the calendaryear, less 1-1/2 percentage points; or
(c) the statement savings rate or share account rate offered to the public for accounts oflike size by the depository institution holding the reserve account.
(2) Subsection (1) does not apply to:
(a) a reserve account required by a governmental insurer or guarantor of the loan as acondition of insurance or guaranty;
(b) a reserve account maintained in connection with a real estate loan in an originalprincipal amount exceeding 80% of the lender's appraised value of the property at the time theloan is made, until the principal balance of the loan is paid down to 80% of the lender's appraisedvalue at the time of the loan; or
(c) payment of interest or other compensation to the borrower if this payment isprohibited by federal law or regulations.
(3) A lender may not require or impose a service charge for the administration of areserve account.

Amended by Chapter 182, 1996 General Session