Chapter 05. Linked Deposit Program

“Certified minority business enterprise” means a minority business enterprise certified under State Finance and Procurement Article, Title 14, Subtitle 3, Annotated Code of Maryland.

“Department” means the Department of Housing and Community Development.

“Financial institution” has the meaning stated in State Finance and Procurement Article, §6-201, Annotated Code of Maryland.

“Program” means the Linked Deposit Program established under State Finance and Procurement Article, §6-211, Annotated Code of Maryland.

“Program loan” means a loan made under this chapter.

“Secretary” means the Secretary of Housing and Community Development.

“Small business” means a business that is qualified under State Finance and Procurement Article, Title 14, Subtitle 5, Annotated Code of Maryland.

“Treasurer's Office” means the Office of the State Treasurer.

Is made by a financial institution that is eligible to participate in the Program under Regulation .04B of this chapter;

Meets the financial institution's lending criteria;

Has a term not exceeding 10 years;

Is made to a certified minority business enterprise or a small business that will use the proceeds for a project or activity primarily located in Maryland;

Has an interest rate that is lower than the interest rate the financial institution would charge for a loan for a similar purpose and term by at least:

Does not exceed $1,000,000 when added to any other loans the borrower received under the Program;

Has points or fees charged by the financial institution at closing not exceeding 1 percent of the loan amount; and

Complies with all terms and conditions of this chapter.

For the furtherance of sectarian religious instruction;

In connection with the design, acquisition, or construction of any building used or to be used as a place of sectarian religious worship or instruction; or

In connection with any program or department of divinity for any religious denomination, including but not limited to religious services, religious instruction, or other activities that have an explicitly religious purpose.

One or more participating financial institutions; or

The Department, to be forwarded to all participating financial institutions.

Before making a loan commitment to the applicant, the financial institution shall submit an application to the Department on forms prescribed by the Department;

The Department may require that the application be submitted in electronic form; and

After receipt of a completed application, the Department shall either:

An applicant shall submit a completed application to the Department on forms prescribed by the Department;

An applicant may submit the application in electronic form or written form;

After the receipt of a completed application, the Department shall either:

If the Department confirms that the applicant is a certified minority business enterprise or a small business, the Department shall provide:

Provide the applicant and the Department with a commitment letter describing the terms and conditions of the loan, including the interest rate and fees charged by the financial institution; and

Certify to the Department on forms approved by the Department that the loan will meet the requirements of Regulation .03 of this chapter.

Notify the applicant and Department in writing; and

Comply with all State and federal requirements regarding the denial of a loan.

Within 10 business days of receipt of all forms and documentation from the financial institution, the Department shall determine if the loan closed in conformity with the criteria of Regulation .03 of this chapter.

If the Department determines that a loan is eligible, it shall enroll the loan in the Program and notify the Treasurer's Office and the financial institution in writing of its decision.

If the Department determines that a loan is not eligible, it shall notify the financial institution in writing stating the reason the loan is not eligible. An applicant or financial institution may request that the Department reconsider its decision in accordance with Regulation .07E of this chapter.

An applicant or a financial institution may request reconsideration of a Department decision that a loan is not eligible for the Program by submitting a written request to the Secretary or the Secretary's designee within 30 days following the date of the Department's written decision. The request for reconsideration shall address each reason for the decision and provide documentation supporting reasons for reconsideration of the issues. The Secretary shall respond in writing to the applicant's request for reconsideration within 30 days of receipt by the Secretary of the request for reconsideration.

An initial decision or reconsideration of a decision is not a contested case within the meaning of the Administrative Procedure Act or COMAR 05.01.01.02.

The Secretary, in the Secretary's sole discretion, may delegate to an authorized officer of the Department the authority to approve, disapprove, or approve with modifications a request for reconsideration of a determination of ineligibility under the Program.

The Treasurer's Office shall reduce the amount of the certificate of deposit purchased from the financial institution under the Program by the amount of the outstanding principal balance of the specified Program loan; and

If permitted by the loan documents, the financial institution may increase the interest rate of the Program loan by the lesser of:

To the extent that the waiver or variance is consistent with State Finance and Procurement Article, §6-211, Annotated Code of Maryland; and

If, in the written determination of the Secretary, the application of a regulation in a specific case or in an emergency situation would be inequitable or contrary to the purposes of State Finance and Procurement Article, §6-211, Annotated Code of Maryland.

The number of loans made under the Program;

The dollar value of loans made under the Program;

The performance of the loans made under the Program;

The type of business that received loans; and

Any other information requested by the Department related to the Program.