SECTION 187.14. State's Rights with Respect to the Reserve

(a) All of the money in a reserve account established under this program is property of the state.

(b) The state is entitled to earn interest on the amount of contributions made by the Office, eligible applicant, and financial institution to a reserve account.

(c) The Office shall withdraw monthly or quarterly from a reserve account the amount of interest earned by the state.

(d) The Office shall deposit the amount withdrawn into the fund.

(e) If the amount in a reserve account exceeds 33% of the balance of the financial institution's outstanding capital access loans, the Office may withdraw the excess amount and deposit the amount in the fund. A withdrawal of money authorized hereunder may not reduce an active reserve account to less than $200,000.

(f) Withdrawal of reserves in accordance with subsection (c) of this section shall be based on information provided by the participating financial institution in its annual report to the Office.

(g) The Office shall withdraw from the financial institution's reserve account all principal and interest and deposit it into the fund when all three of the subsequent conditions exist:

(1) a financial institution is no longer eligible to participate in the program or a participation agreement entered into under the program expires without renewal by the Office or financial institution;

(2) the financial institution has no outstanding capital access loans; and

(3) the financial institution has not made a capital access loan within the preceding 24 months.

(h) The Office may withdraw from the financial institution's reserve account all principal and interest and deposit it into the fund when either of the subsequent conditions exist:

(1) the financial institution has failed to comply with any directive or instruction issued by the Office; or

(2) the financial institution has failed to comply with any express term or condition of the participation agreement.

(i) The Office may inspect the files of a participating financial institution with regard to loans enrolled under the program during normal business hours.

(j) The financial institution shall remit a quarterly statement to the Office providing details of the balance and the payments and receipts activity in the reserve account for the prior quarter.

Source Note: The provisions of this §187.14 adopted to be effective September 15, 1997, 22 TexReg 8967; amended to be effective October 31, 2002, 27 TexReg 10010; amended to be effective August 5, 2012, 37 TexReg 5735