10 CCR s 5284

Cal. Admin. Code tit. 10, s 5284

CALIFORNIA CODE OF REGULATIONS
TITLE 10. INVESTMENT
CHAPTER 7.1. BUSINESS, TRANSPORTATION AND HOUSING AGENCY: METAL PLATING
FACILITY LOAN GUARANTEES
ARTICLE 1. METAL PLATING FACILITY LOAN GUARANTEES
This database is current through 01/05/07, Register 2007, No. 1.
s 5284. Guarantee Terms.

(a) Following adoption of a resolution by its board of directors, a
corporation shall be authorized to issue a commitment letter specifying
the conditions under which it will issue a guarantee to a specified
borrower.

(b) The terms and conditions of a guarantee shall be consistent with the
resolution of the corporation approving the guarantee and shall include
all of the following:

(1) Provision that the corporation promises to pay up to ninety
percent (90%) of the principal and interest, subject only to the
following restrictions:

(A) The lender has complied with all material conditions contained
in the guarantee, including perfecting collateral; and,

(B) The lender has not engaged, and will not engage, in fraudulent
or grossly negligent practices in connection with the borrower,
guarantee, the loan, or the loan agreement.

(2) A statement that the lender shall send to the corporation
executing the guarantee, a copy of all delinquency notices mailed to
the borrower.

(3) A description of the procedures and the responsibilities of the
lender and corporation subsequent to default.

(4) The demand procedures described in section 5285.

(5) Agreement to abide by binding arbitration by the American
Arbitration Association in the event that either the corporation or
the agency denies the requested demand pursuant to section
5285(d)(2) or (e)(2), or the amount paid to the lender is less than
the amount contained in the demand letter.

(6) Acknowledgment by the lender that in the event of a demand, the
lender will allow a representative of the California Department of
Financial Institutions, or other auditor selected by the corporation
and approved by the agency, to examine the lender's loan files.

(7) A designation as to whether the guarantee is a collection
guarantee or a loan guarantee.

(8) A statement that the maximum amount of interest to be paid is
ninety (90) calendar days at guaranteed percentage. The ninety (90)
calendar day limit can only be exceeded with the written approval of
the corporation.

(c) The duration of a guarantee on a loan shall not exceed seven (7)
years.

(d) The maximum guarantee for any one applicant shall not exceed $100,000.

(e) The corporation shall be authorized to charge a loan guarantee fee not
to exceed two (2) percent of the principal amount guaranteed.

(f) For a guarantee with a term greater than one year, the corporation may
charge a guarantee servicing fee not to exceed .5% of the principal amount
guaranteed. The servicing fee shall be authorized to commence on the first
anniversary of the effective date of the guarantee, and to continue
annually until the guarantee is released.

Note: Authority cited: Section 42106, Public Resources Code.
Reference: Sections 42101, 42101.2 and 42102.4, Public Resources
Code.

HISTORY

1. New section filed 7-26-2006 as an emergency; operative 7-26-2006
(Register
2006, No. 30). This regulatory action is deemed an emergency, was filed
directly with the Secretary of State, and shall remain in effect until
revised
or repealed by the Business, Transportation and Housing Agency pursuant to

Public Resources Code section 42106.

10 CCR s 5284, 10 CA ADC s 5284
1CAC

10 CA ADC s 5284

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