§ 8072. Loan Enrollment.

(a) The terms and conditions of Qualified Loans, including interest rates, fees and other conditions, shall be determined solely by agreement of the Participating Financial Institution and the Borrower.

(b) A Participating Financial Institution shall be authorized to enroll under the Program all or a part of any Qualified Loan:

(1) by notifying the Authority in writing, within 15 business days after the Qualified Loan is made, that it is enrolling a Qualified Loan. For purposes of this section, the date on which the Participating Financial Institution makes a Qualified Loan is the date on which the Participating Financial Institution first disburses proceeds of the Qualified Loan to the Borrower; and

(2) by transmitting to the Authority the Fees collected from the Participating Financial Institution and the Borrower, or from an Independent Contributor on behalf of the Borrower and/or the Authority, in connection with the Qualified Loan, and by providing written evidence that the Fees have been deposited in a Loss Reserve Account held by either the Participating Financial Institution or the Program Trustee.

(c) The notification to the Authority shall include at least the following information:

(1) Borrower name, D/B/A (if any), and the business address.

(2) Brief description of the Borrower's business and regular activties, either the SIC Code(s) or the NAICS Code(s) applicable to such business, and the amount of its annual revenues.

(3) Whether this business has been open for two years or more, and is owned by one of the following: a woman, minority, or veteran.

(4) Brief summary of the intended use of the proceeds of the Qualified Loan.

(5) Amount of the Qualified Loan being enrolled (and indication if less than the full amount of the Qualified Loan is being enrolled) and the lender loan number.

(6) Type of the Qualified Loan (e.g., line of credit, term loan, TRAC Lease).

(7) Date of the Qualified Loan.

(8) Interest rate applicable to the Qualified Loan.

(9) Term or maturity date of the Qualified Loan.

(10) Geographic location of the Qualified Business and the location of the facilities being financed if different.

(11) Whether the Qualified Business or the location of the facilities being financed is in a Severely Affected Community.

(12) Whether the loan is secured.

(13) Whether the loan is a refinancing, and if so, whether the prior loan was enrolled under the Program, and whether the amount of the loan was increased as part of the refinancing.

(14) Agreed amount of the Fees payable by each of the Borrower and the Participating Financial Institution.

(15) Whether any portion of the Fees payable by the Borrower or the Contribution was or is to be paid by an Independent Contributor; the identity of such Independent Contributor; and a certification that the Independent Contributor has approved the use of its funds to pay such Fees or Contribution in connection with the Qualified Loan.

(16) Number of persons currently employed by the Borrower, and number of jobs expected to be created, retained or affected by the Qualified Loan.

(17) Certification that the loan is a Qualified Loan, and that the business receiving the Qualified Loan is a Qualified Business.

(18) Certification that the Qualified Loan is for a business activity that has its Primary economic effect in California.

(19) Certification that, upon request of the Executive Director, the Participating Financial Institution will provide information from the financial records of the Borrower, and that the Participating Financial Institution has obtained the consent of the Borrower to such disclosure.

(20) Certification that the Participating Financial Institution has obtained a written representation from the Borrower that it has no legal, beneficial or equitable interest in the Fees or the Contribution.

(21) Certification that the enrolled amount of the loan does not exceed $2,500,000.

(22) Certification that the Participating Financial Institution has notified the Borrower if the Participating Financial Institution's share of the Fees for the Qualified Loan have been paid by the Borrower.

(23) Acknowledgment that the lending activities of the Participating Financial Institution are subject to any applicable safety and soundness standards as set forth in applicable federal banking regulations.

The Participating Financial Institution shall be authorized to base the information requested by subsections (4), (16), (17), (18) and (21) above upon representations made to it by the Borrower; provided that no such Borrower representation may be relied upon if it is known to be false by the lending officer(s) at the Participating Financial Institution who are directly involved in the negotiation of the Qualified Loan.

(24) Certification that the Participating Financial Institution has obtained a written representation from the Borrower that it has secured or made application for all applicable licenses or permits needed to conduct business.

(25) Certification from the Participating Financial Institution that it has not, and will not, enroll the same loan or portion thereof in any other government program substantially similar to the Program.

(d) If a Borrower seeking a loan from a Participating Financial Institution has less than a majority of its employees in California, the Participating Financial Institution shall be authorized to submit information to, and seek a determination from, the Executive Director that such Borrower has its Primary business location in California. Such determination shall be made by the Executive Director within 10 days of receipt of a written request from a Participating Financial Institution containing information about the business activities of the proposed Borrower.

(e) If a Borrower seeking a Qualified Loan from a Participating Financial Institution is an employee, member, director, officer, principle shareholder, or affiliate of the Participating Financial Institution, the terms and the conditions of the Qualified Loan and the internal procedures used to approve the Qualified Loan must comply with the following requirements:

(1) If the Participating Financial Institution is a federal-chartered bank, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 371c, 371c-1, 375a, and 375b of the Title 12 of the United States Code, and Sections 215.4 of Title 12 of the Code of Federal Regulations.

(2) If the Participating Financial Institution is a state-chartered bank, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Section 3370 et seq. of the Financial Code, and Sections 10.19300 to 10.19302 of Title 10 of the California Code of Regulations.

(3) If the Participating Financial Institution is a federal-chartered savings association, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Section 1468 of Title 12 of the United States Code.

(4) If the Participating Financial Institution is a state-chartered savings association, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Sections 6503 and 6529 of the Financial Code.

(5) If the Participating Financial Institution is a federal-chartered credit union, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 1757 and 1761c of Title 12 of the United States Code and Section 701.21(d) of Title 12 of the Code of Federal Regulations.

(6) If the Participating Financial Institution is a state-chartered credit union, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Section 15050 of the Financial Code.

(7) If the Participating Financial Institution is a not-for-profit certified community development financial institution (CDFI), the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 1805.807 of Title 12 of the Code of Federal Regulations.

(8) If the Participating Financial Institution is a lending institution as described in Section 44559.1(d)(2) of the Health and Safety Code, the Qualified Loan must be made in accordance with any applicable federal laws that regulate conflicts of interests and insider transactions and Section 120.140 of Title 13 of the Code of Federal Regulations.

(f) The Participating Financial Institution may pre-qualify with the Authority any qualified loan. Pre-qualifications do not necessarily guarantee that funds will be available at the time of final enrollment, unless the funding source requires it. Pre-qualifications shall be valid for six (6) months.

(g) The Authority shall, upon receipt of documentation and Fees from the Participating Financial Institution, enroll the Qualified Loan if the Executive Director determines that the Qualified Loan meets the requirements of the Law and this Article. The Executive Director shall notify the Participating Financial Institution of enrollment within 15 business days after receipt by the Authority of all documentation and Fees required by the Law and/or this Article. The Executive Director's determination whether a loan shall be enrolled in the Program shall be final. The Executive Director shall be authorized to review an application for enrollment submitted by a Participating Financial Institution in advance of the making of the loan, and notify the institution whether such loan meets the requirements of the Law and this Article.

(h) Upon enrollment of a Qualified Loan, the Contribution shall be transferred for deposit in the Loss Reserve Account (1) by the Authority or (2) by an Independent Contributor, and the Program Trustee shall notify the Participating Financial Institution of the transfer and of the source of funds from which the transfer was made.

(i) If the amount is increased, or previously enrolled CalCAP loans are combined, a new loan enrollment form shall be submitted, and Fees (if applicable) shall be transmitted or deposited pursuant to Section 8072(b)(2) based on the increased amount.

(j) Without regard to the terms of the loan, the term of enrollment in the Program shall not exceed ten years.

HISTORY

1. New section filed 3-21-94 as an emergency; operative 3-21-94 (Register 94, No. 12). This filing was deemed an emergency by Health and Safety Code section 44520(b). A Certificate of Compliance must be transmitted to OAL by 9-19-94 or the emergency regulation will be repealed by operation of law on the following day.

2. Certificate of Compliance as to 3-21-94 order including amendment of subsection (c)(20), new subsections (g) and (h) and amendment of Note transmitted to OAL 9-16-94 and filed 10-31-94 (Register 94, No. 44).

3. Amendment of subsections (b)(1), (b)(2) and (c)(2), new subsections (c)(3) and (c)(4) and subsection renumbering, amendment of newly designated subsection (c)(6), new subsections (c)(8) and (c)(9), amendment of newly designated subsections (c)(11) and (c)(14), new subsection (c)(15), amendment of newly designated subsections (c)(16), (c)(17), (c)(19) and (c)(22), amendment of subsections (d) and (e), new subsection (f) and subsection relettering, and amendment of newly designated subsections (g) and (h) filed 2-6-96 as an emergency pursuant to Health and Safety Code section 44520(b); operative 2-6-96 (Register 96, No. 6). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 8-5-96 or emergency language will be repealed by operation of law on the following day.

4. Certificate of Compliance as to 2-6-96 order, including amendment of subsections (c)(4), (c)(15), (c)(17) and (c)(22), and new subsections (c)(23)-(24), transmitted to OAL 8-2-96 and filed 9-10-96 (Register 96, No. 37).

5. Amendment of subsections (a), (b)(2), (c)(2), (c)(3), (c)(15), (c)(19), (c)(22), (d), (e), (h) and (i) filed 12-23-98; operative 12-23-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 52).

6. Amendment of subsections (c)(1)-(3), (c)(19) and (c)(21) filed 2-24-2000 as an emergency pursuant to Health and Safety Code section 44520; operative 2-24-2000 (Register 2000, No. 8). A Certificate of Compliance must be transmitted to OAL by 8-22-2000 or emergency language will be repealed by operation of law on the following day.

7. Certificate of Compliance as to 2-24-2000 order transmitted to OAL 8-21-2000 and filed 10-2-2000 (Register 2000, No. 40).

8. Repealer of subsection (c)(19), subsection renumbering, amendment of newly designated subsection (c)(23) and subsection (d), repealer of subsection (f), subsection relettering and amendment of Note filed 12-18-2000 as an emergency pursuant to Health and Safety Code section 44520; operative 1-1-2001 (Register 2000, No. 51). A Certificate of Compliance must be transmitted to OAL by 7-2-2001 or emergency language will be repealed by operation of law on the following day.

9. Certificate of Compliance as to 12-18-2000 order transmitted to OAL 6-14-2001 and filed 7-26-2001 (Register 2001, No. 30).

10. Amendment of subsections (b)(1) and (g) filed 8-8-2002 as an emergency pursuant to Health and Safety Code section 44520(b); operative 8-8-2002 (Register 2002, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-4-2003 or emergency language will be repealed by operation of law on the following day.

11. Certificate of Compliance as to 8-8-2002 order transmitted to OAL 2-3-2003 and filed 3-6-2003 (Register 2003, No. 10).

12. Amendment of subsection (c)(2), new subsections (e)-(e)(8) and subsection relettering filed 12-29-2005 as an emergency pursuant to Health and Safety Code section 44520(b); operative 12-29-2005 (Register 2005, No. 52). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 6-27-2006 or emergency language will be repealed by operation of law on the following day.

13. Certificate of Compliance as to 12-29-2005 order transmitted to OAL 4-21-2006 and filed 6-1-2006 (Register 2006, No. 22).

14. Amendment of subsections (b)(1), (b)(21) and (b)(23) and new subsections (b)(24)-(26) and (e)(9) filed 1-22-2008 as an emergency; operative 1-22-2008 (Register 2008, No. 4). A Certificate of Compliance must be transmitted to OAL by 7-21-2008 or emergency language will be repealed by operation of law on the following day.

15. Certificate of Compliance as to 1-22-2008 order, including amendment of subsection (f), transmitted to OAL 5-30-2008 and filed 7-14-2008 (Register 2008, No. 29).

16. Amendment of subsection (c)(21), redesignation of former subsection (e)(9) as subsection (f) and subsection relettering filed 2-11-2009 as an emergency; operative 2-11-2009 (Register 2009, No. 7). A Certificate of Compliance must be transmitted to OAL by 8-10-2009 or emergency language will be repealed by operation of law on the following day.

17. Certificate of Compliance as to 2-11-2009 order transmitted to OAL 5-29-2009 and filed 6-23-2009 (Register 2009, No. 26).

18. Amendment of subsections (f) and (i) and new subsection (k) filed 12-17-2009 as an emergency; operative 12-17-2009 (Register 2009, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-15-2010 or emergency language will be repealed by operation of law on the following day.

19. Amendment of subsection (f) and (i) and new subsection (k) refiled 6-21-2010 as an emergency, including additional amendments to subsections (c)(23), (e)(8) and (i); operative 6-21-2010 (Register 2010, No. 26). A Certificate of Compliance must be transmitted to OAL by 9-20-2010 or emergency language will be repealed by operation of law on the following day.

20. Repealer of 6-21-2010 operative amendment of subsections (f) and (i) and adoption of new subsection (k) by operation of law; operative 9-21-2010 (Register 2010, No. 40).

21. Amendment of subsections (f) and (i) and new subsection (k) refiled 9-29-2010 as an emergency; operative 9-29-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-28-2010 or emergency language will be repealed by operation of law on the following day.

22. Amendment of subsection (c)(21), repealer of subsection (j) and subsection relettering filed 11-29-2010 as an emergency; operative 11-29-2010 (Register 2010, No. 49). A Certificate of Compliance must be transmitted to OAL by 5-31-2011 or emergency language will be repealed by operation of law on the following day.

23. Certificate of Compliance as to 9-29-2010 order transmitted to OAL 11-24-2010 and filed 1-6-2011 (Register 2011, No. 1).

24. Amendment of subsections (c)(1)-(2), repealer and new subsection (c)(3) and amendment of subsections (c)(5)-(6) and (c)(22) filed 3-7-2011 as an emergency; operative 3-7-2011 (Register 2011, No. 10). A Certificate of Compliance must be transmitted to OAL by 9-6-2011 or emergency language will be repealed by operation of law on the following day.

25. Notice of repeal and deletion of 11-29-2010 emergency amendment by operation of Government Code section 11346.1(f) (Register 2011, No. 33).

26. Amendment of subsections (c)(1) and (c)(21), repealer of subsection (j) and subsection relettering filed 8-16-2011; operative 8-16-2011 pursuant to Government Code section 11343.4(c) (Register 2011, No. 33).

27. Certificate of Compliance as to 3-7-2011 order transmitted to OAL 7-29-2011 and filed 8-16-2011 (Register 2011, No. 33).

28. Amendment of subsections (c)(3), (c)(6) and (c)(9) and repealer of subsection (c)(26) filed 11-7-2011 as an emergency; operative 11-7-2011 (Register 2011, No. 45). A Certificate of Compliance must be transmitted to OAL by 5-7-2012 or emergency language will be repealed by operation of law on the following day.

29. Certificate of Compliance as to 11-7-2011 order transmitted to OAL 2-22-2012 and filed 2-29-2012 (Register 2012, No. 9).

30. Amendment of subsections (c)(15), (c)(20) and (h) filed 6-25-2012 as an emergency; operative 6-25-2012 (Register 2012, No. 26). A Certificate of Compliance must be transmitted to OAL by 12-24-2012 or emergency language will be repealed by operation of law on the following day.

31. Certificate of Compliance as to 6-25-2012 order transmitted to OAL 12-20-2012 and filed 2-4-2013 (Register 2013, No. 6).

32. Amendment of subsections (b)(1) and (g) filed 2-11-2013 as an emergency; operative 2-11-2013 (Register 2013, No. 7). A Certificate of Compliance must be transmitted to OAL by 8-12-2013 or emergency language will be repealed by operation of law on the following day.

33. Editorial correction adding History 31 and renumbering histories (Register 2013, No. 30).

34. Certificate of Compliance as to 2-11-2013 order transmitted to OAL 7-3-2013 and filed 7-22-2013 (Register 2013, No. 30).

35. Amendment of subsection (f) filed 12-24-2013 as an emergency; operative 12-24-2013 (Register 2013, No. 52). A Certificate of Compliance must be transmitted to OAL by 6-23-2014 or emergency language will be repealed by operation of law on the following day.

Note

Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Sections 44559.2 and 44559.4, Division 27, Health and Safety Code.