2608

LAWS OF MARYLAND

Ch. 691

Article - Financial Institutions

13-307.

The Department periodically shall set a preferred
interest rate[, which] THAT, AS LONG AS MONEYS BORROWED BY
THE STATE ARE APPROPRIATED TO THE PROGRAM, COMPLIES WITH ANY
APPLICABLE FEDERAL TREASURY REGULATIONS GOVERNING THE
BORROWING OF MONEYS BY THE STATE. THE PREFERRED interest
rate shall be:

(1)  At least sufficient to cover:

(i) All administrative and other expenses
of the program;

(ii) Reasonably expected losses due to
defaults on loans; and

(iii) The interest cost of moneys used to
fund the program, which may be the actual interest cost of
moneys borrowed by the State and appropriated to the
program, or the imputed interest cost of general funds or
loan repayments appropriated to the program; and

(2)  Not less than a rate that is 5 percentage
points below the prevailing rate on comparable loans made by
private lenders as determined by the Department, unless:
[the]

(I)  THE Department also determines that
the previailing prevailing rate is so high that this
condition is not compatible with both prudent loan
underwriting standards and with the income limits
established under § 13-306(d) of this subtitle; OR

(II)  THE DEPARTMENT ALSO DETERMINES THAT A
RATE THAT IS MORE THAN 5 PERCENTAGE POINTS BELOW THE
PEVAILING PREVAILING RATE IS NECESSARY TO COMPLY WITH
FEDERAL TREASURY REGULATIONS GOVERNING THE BORROWING OF
MONEYS BY THE STATE.

13-308.

(a)  The program shall operate as a continuing,
nonlapsing, special fund, that consists of moneys
appropriated by the State to the program.

(b)  The Department shall use the fund to make loans
and to pay expenses of the program (INCLUDING RESERVES FOR
ANTICIPATED FUTURE LOSSES DIRECTLY RELATED TO THE PROGRAM)
as provided in the annual budget of the State or other act
appropriating moneys.

(c)  The State Treasurer shall hold and the State
Comptroller shall account for the fund. The fund shall be
invested and reinvested in the same manner as other State