Section 324.14506. Lending institution responsibilities.

(1) A lending institution shall enter into a lender agreement with the department.

(2)   A lender agreement shall provide for all of the following:

(a)   A lending institution may make a small business pollution prevention loan to a loan recipient with participation from the fund not to exceed the amount specified in MCL 324.14513(6).

(b)   The total amount of the loan shall be shared equally by the lending institution and the fund, unless the director increases the fund's share of the loan to ensure that the fund's interest rate of return is not less than 0%.

(c)   The lending institution shall notify the department of the effective interest rate being assessed to the applicant, including the interest rate assessed as part of the fund's share and the interest rate assessed as part of the lending institution's share.

(d)   The effective interest rate that the loan recipient pays on the full amount of the loan under the loan agreement shall not exceed 5%.

(e)   The lending institution shall provide an executed copy of the loan agreement to the department.

(f)  Only appropriate and reasonable costs or fees associated with processing the loan are eligible for reimbursement as part of the loan.

(g)     The lending institution will remit principal and interest payments not less frequently than on a quarterly basis to the fund until the loan is repaid in full.

(h)    The lending institution will pursue the collection of all defaulted loans until brought current, collected in full, reduced to a judgment, or settled with the concurrence of the department.

(i)    The lending institution will consider loan recipients who fail to complete the project to be in default of the loan. This provision shall be included in all loan agreements.

History: 1998-2000 AACS; 2013 AACS.