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Texas Statutes (Last Updated: January 4, 2014) |
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GOVERNMENT CODE |
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Title 4. EXECUTIVE BRANCH |
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Subtitle F. COMMERCE AND INDUSTRIAL DEVELOPMENT |
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Chapter 481. TEXAS ECONOMIC DEVELOPMENT AND TOURISM OFFICE |
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Subchapter N. BUSINESS DEVELOPMENT--LINKED DEPOSIT PROGRAM |
Sec. 481.193. LINKED DEPOSIT PROGRAM
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(a) The bank shall establish a linked deposit program to encourage commercial lending for the development of:
(1) small businesses in enterprise zones;
(2) historically underutilized businesses;
(3) medium-sized businesses;
(4) child-care services provided by and activities engaged in in this state by nonprofit organizations; and
(5) quality, affordable child-care services in this state.
(b) The executive director shall adopt rules for the loan portion of the linked deposit program.
(c) In order to participate in the linked deposit program, an eligible lending institution may solicit loan applications from eligible borrowers.
(d) After reviewing an application and determining that the applicant is an eligible borrower and is creditworthy, the eligible lending institution shall send the application for a linked deposit loan to the bank.
(e) The eligible lending institution shall certify the interest rate applicable to the specific eligible borrower and attach it to the application sent to the bank.
(f) After reviewing each linked deposit loan application, the executive director shall approve or deny the application.
(g) After the executive director's approval of the application and after the lending institution originates a loan to an eligible borrower, the bank shall authorize the comptroller to place a linked deposit with the applicable lending institution for the period of the loan, subject to Subsections (h) and (i). The bank is not required to maintain the deposit with the lending institution if the loan is extended, renewed, or renegotiated unless the bank approves a new linked deposit loan application under this section for the loan as modified. Subject to the limitation described by Section 481.197, the comptroller shall place, at the direction of the bank, a time deposit at an interest rate described by Section 481.192 and may modify the interest rate during the period of the loan, notwithstanding any order of the State Depository Board to the contrary.
(h) Before the placing of a linked deposit, the eligible lending institution and the state, represented by the bank, shall enter into a written deposit agreement containing the conditions on which the linked deposit is made. The deposit agreement must provide that:
(1) the comptroller will place the linked deposit not later than the 10th business day after the date on which the agreement is executed;
(2) the lending institution will notify the bank if the borrower to which the deposit is linked defaults on the loan; and
(3) in the event of a default the comptroller may withdraw the linked deposit at the direction of the bank.
(i) If a lending institution holding linked deposits ceases to be a state depository, the comptroller must withdraw the linked deposits at the direction of the bank.