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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 26. INSURANCE, SECURITIES, AND BANKING |
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SubTilte 26-C. BANKING AND FINANCIAL INSTITUTONS |
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Chapter 26-C29. STATE SMALL BUSINESS CREDIT INITIATIVE |
Section 26-C2905. CASH COLLATERAL ACCOUNTS
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2905.1 All Collateral Support Program funds transferred to a cash collateral account shall be the property of, and solely controlled by, DISB. Interest or income earned on the funds shall be credited to the cash collateral account.
2905.2DISB may withdraw at any time from a cash collateral account all interest or income that has been credited to the cash collateral account. DISB may use interest or income withdrawals for any purpose in connection with the SSBCI Programs.
2905.3The cash collateral account shall be reduced proportionately with the principal reduction of the loan, on an annual basis or sooner if the loan is paid off.
2905.4 Each cash collateral account for a participating Eligible Lender shall be established in the name of DISB and maintained at that Eligible Lender or at another designated insured depository financial institution in a segregated account. This account shall be identified as “DISB SSBCI Fund - Collateral Support Program” or other name that DISB determines.
2905.5The cash collateral accounts shall be interest bearing. Participating Eligible Lenders shall not charge DISB any fees related to the Collateral Support Program transactions, for the maintenance of a cash collateral account, or any other related fees.
2905.6 After an Eligible Lender charges off all or part of a loan enrolled in the Collateral Support Program, and after making other efforts to collect upon the Enrolled Loan, including but not limited to seeking judgment and levying against collateral, the Eligible Lender may file a claim with DISB.
2905.7The Eligible Lender may file the claim by submitting a completed claim form, executed by an authorized officer of the Eligible Lender, along with any additional information that DISB requires.
2905.8The Eligible Lender’s claim may include:
(a) The amount of the enrolled principal left unpaid by Eligible Lender’s collection efforts;
(b) Up to ninety (90) days of accrued interest; and
(c) Fifty percent (50%) of the reasonable, documented out-of-pocket expenses incurred by the Eligible Lender, but not paid by the Eligible Recipient, in pursuing collection efforts, including the preservation of collateral.
2905.9The total amount of the Eligible Lender’s claim may not exceed the amount of funds in the cash collateral account for that particular loan.
2905.10 Upon receipt and acceptance by DISB of a claim filed by the Eligible Lender, DISB shall promptly pay the claim as submitted solely from funds in the cash collateral account for that particular loan.
2905.11If after DISB pays the claim, the Eligible Lender recovers from an Eligible Recipient any amount for which payment of the claim was made, the Eligible Lender shall promptly pay to DISB the amount recovered, less its reasonable, documented out-of-pocket expenses.
2905.12The Eligible Lender shall retain documentation in its files of its out-of-pocket expenses. The Eligible Lender shall only be required to pay to DISB amounts in excess of the amount needed to fully cover the Eligible Lender’s loss on a loan under the Collateral Support Program.
2905.13 DISB may charge a closing fee of up to four percent (4%) of the balance of the cash collateral account at closing and an annual fee of up to four percent (4%) of the annual balance of the cash collateral account.
2905.14If a participating Eligible Lender discontinues using the Collateral Support Program and no additional loans are being made under the Collateral Support Program, DISB shall make withdrawals against each cash collateral account proportionately to the outstanding balance of the loan until each loan has been repaid. At that time, DISB shall withdraw all remaining funds in the account.