2014 Kentucky Revised Statutes
CHAPTER 41 - DEPARTMENT OF THE TREASURY
41.610 Participation in program -- Investment agreements -- Required terms and conditions.
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<![CDATA[41.610 Participation in program -- Investment agreements -- Required terms
and conditions.
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Qualified public depositories in Kentucky shall be eligible to participate in the
Linked Deposit Investment Program.
An eligible lending institution choosing to participate in the Linked Deposit
Investment Program shall enter into a linked deposit investment agreement
with the State Investment Commission which shall include requirements
necessary to carry out the purposes of the Linked Deposit Investment
Program. A linked investment shall bear a minimum rate of two percent (2%)
and a maximum rate fixed by the Wall Street Journal prime rate as published
on the first business day of each month less four percent (4%).
The eligible lending institution that desires to receive a linked deposit
investment shall agree to loan the funds to borrowers under the following
terms:
(a) No loan shall exceed one hundred thousand dollars ($100,000);
(b) Maturity dates of the loan shall be set as agreed to between the financial
institution and the borrower with a maximum maturity of seven (7) years;
and
(c) The rate of interest for the term of the loan shall be fixed at the Wall
Street Journal prime rate as published on the first business day of each
month, with a minimum interest rate of five percent (5%).
An eligible lending institution that desires to receive a linked deposit shall
accept and review applications for loans from eligible small businesses and
agribusinesses. The lending institution shall assume all responsibility for credit
underwriting and shall apply all usual lending standards to determine the
creditworthiness of each applicant.
The eligible lending institution shall forward to the Kentucky Agricultural
Finance Corporation or the Cabinet for Economic Development, as
appropriate, a completed loan package for review to determine if the loan
package is in accordance with the administrative regulations promulgated
pursuant to KRS 41.606(7). If the loan package is found to be complete and in
accordance with the administrative regulations, it shall be forwarded to the
State Investment Commission for funding.
The eligible lending institution shall charge no penalty for early payback of the
linked deposit loan. Principal repayments received by the lending institution
shall be returned to the State Investment Commission annually on the
anniversary date of the loan.
Applications for renewal of repurchase agreements shall be accompanied by a
status report on linked deposit loans.
The Commonwealth, the Kentucky Agricultural Finance Corporation, and the
Cabinet for Economic Development, their agents and employees, and the State
Investment Commission shall not be liable to any eligible lending institution in
any manner for payment of the principal or interest on the loan to an eligible
small business or to an eligible small agribusiness. Any delay in payments or
default on the part of a borrower shall not affect the deposit agreement
between the eligible lending institution and the State.
Effective:July 13, 2004
History: Amended 2004 Ky. Acts ch. 41, sec. 3, effective July 13, 2004. -Amended 1998 Ky. Acts ch. 172, sec. 2, effective July 15, 1998. -- Amended
1996 Ky. Acts ch. 208, sec. 6, effective July 15, 1996. -- Created 1994 Ky. Acts
ch. 276, sec. 3, effective July 15, 1994.
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