§ 1835-C — Loans to lenders

§ 1835-c. Loans to lenders. 1. The authority shall have the power and\nis hereby authorized to make and contract to make loans to lenders on\nsuch terms and conditions as it shall determine, and all lenders are\nauthorized to borrow from the authority in accordance with the\nprovisions of this section and upon such terms and conditions as the\nauthority may impose, provided that the business development corporation\nestablished under article five-A of the banking law shall receive no\nmore than five million dollars and any other lender shall receive no\nmore than two million dollars in loans to lenders from the authority in\nany twelve month period.\n 2. The authority shall require as a condition of each loan to a lender\nthat such lender enter into written commitments to make within such\nperiod of time as the authority may require loans for agricultural\nbusiness projects in accordance with the standards and criteria\nprescribed by the authority. Such loans for agricultural business\nprojects shall be in an aggregate principal amount equal to the amount\nof such loan to the lender and shall require the disbursement of such\nloan proceeds by the lender to borrowers to pay the costs of such\nprojects; provided that no borrower shall receive more than two hundred\nthousand dollars in loans for agricultural business projects that are\nfinanced by loans to lenders from the authority in any twelve month\nperiod.\n 3. The authority shall require the submission to it by each lender to\nwhich the authority has made a loan to lender such documentation and\nother evidence satisfactory to the authority that the lender has made\nloans for agricultural business projects in accordance with the\nstandards and criteria prescribed by the authority, and in this\nconnection the authority through its members, agents and employees may\ninspect the books and records of such lender.\n 4. The authority shall require that each lender receiving a loan to\nlender pursuant to this section shall issue and deliver to the authority\nan evidence of its indebtedness to the authority which shall constitute\nan unconditional obligation of such lender and shall bear such date or\ndates, shall mature at such times or times, shall be subject to\nprepayment and shall contain such other provisions consistent with this\nsubtitle as the authority shall require.\n 5. Notwithstanding any other provision of this subtitle, the interest\nrate and other terms of loans to lenders made from the proceeds of any\nissue of loans to lenders bonds or notes of the authority shall be at\nleast sufficient to assure the payment of principal, redemption premium,\nif any, and interest on such bonds and notes as the same become due and\npayable.\n 6. The authority may require that loans to lenders made pursuant to\nthis subtitle shall be secured as to the payment of both principal and\ninterest by a pledge of collateral security in such amounts as the\nauthority may determine to be necessary to assure the payment of such\nloans and the interest thereon as the same become due and payable. Such\ncollateral security may consist of (a) obligations of or guaranteed by\nthe United States of America, (b) obligations of the state or\nobligations the principal and interest of which are guaranteed by the\nstate, excluding any obligations of the authority, (c) obligations of\nany corporation wholly owned by the United States of America, (d)\nobligations of any corporation sponsored by the United States of America\nwhich are or may become eligible as collateral for advances to member\nbanks as determined by the board of governors of the federal reserve\nsystem, or (e) certificates of deposit or time deposits secured in such\nmanner, if any, as the authority shall determine.\n 7. The authority may require that any collateral security for loans to\nlenders be deposited with a bank, trust company or other financial\ninstitution (other than the lender pledging such collateral security)\nwhich shall be located in the state and designated by the authority as\ncustodian therefor or may require each lender to enter into an agreement\nwith the authority containing such provisions as the authority shall\nrequire to (a) adequately identify and maintain such collateral\nsecurity, (b) service such collateral security, and (c) require the\nlender to hold such collateral security in trust for the authority and\nbe accountable to the authority as the trustee of an express trust. The\nauthority may also establish such additional requirements as it shall\ndeem necessary with respect to the pledging, assigning, setting aside or\nholding of such collateral security and the making of substitutions of\nor additions thereto and the disposition of income and receipts\ntherefrom.\n 8. The authority may require as a condition of any loans to lenders\nsuch representations and warranties as it shall determine to be\nnecessary to secure such loans and carry out the purposes of this\nsubtitle, and may make and execute contracts for the administration,\nservicing or collection of any loans to lenders or other financing with\na lender and may pay the reasonable value of services rendered to the\nauthority pursuant to such contracts.\n