2011 Hawaii Code
DIVISION 1. GOVERNMENT
TITLE 13. PLANNING AND ECONOMIC DEVELOPMENT
211D. Capital Access Program
§211D-6 Reserve account.


HI Rev Stat § 211D-6 (2011 through Reg Sess) What's This?

[§211D-6] Reserve account. (a) On approval by the department and after entering into a participation agreement with the department, a participating financial institution making a capital access loan shall establish a reserve account. The reserve account shall be used by the institution only to cover any losses arising from a default of a capital access loan made by the institution under this chapter or as otherwise provided by this chapter.

(b) When a participating financial institution makes a loan enrolled in the program, the institution shall require the borrower to pay to the institution a fee in an amount that is not less than two per cent but not more than three per cent of the principal amount of the loan, which the financial institution shall deposit in the reserve account. The institution shall also deposit in the reserve account an amount equal to the amount of the fee received by the institution from the borrower under this subsection. The institution may recover from the borrower all or part of the amount the institution is required to pay under this subsection in any manner agreed to by the institution and borrower.

(c) For each capital access loan made by a financial institution, the institution shall certify to the department, within the period prescribed by the department, that the institution has made a capital access loan, the amount the institution has deposited in the reserve account, including the amount of fees received from the borrower, and, if applicable, that the borrower is an eligible enterprise zone business located in an area designated as an enterprise zone under chapter 209E.

(d) On receipt of a certification made under subsection (c), the department shall deposit in the institution's reserve account for each capital access loan made by the institution:

(1) An amount equal to the amount deposited by the institution for each loan if the institution:

(A) Has assets of more than $1,000,000,000; or

(B) Has previously enrolled loans in the program that in the aggregate are more than $2,000,000;

(2) An amount equal to one hundred fifty per cent of the total amount deposited under subsection (b) for each loan if the institution is not described by paragraph (1); or

(3) Notwithstanding paragraphs (1) and (2), an amount equal to two hundred per cent of the total amount deposited under subsection (b) for each loan if:

(A) The borrower is an eligible enterprise zone business located in an area designated as an enterprise zone under chapter 209E; or

(B) The borrower is a small or medium-size business or a nonprofit organization that operates or proposes to operate a child care facility or adult residential care home. [L 2000, c 290, pt of §2]

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