Interest Rate on Linked Deposit Loans

PURPOSE: This rule establishes the procedure to be used to set the interest rate under the Linked Deposit Program and the maximum interest rate on loans in this program. (1) For all linked deposit loan applications, the lending institution shall certify the interest rate on the loan to be made to the applicant based on the lending institution’s assessment of the applicant’s credit risks and profile and other relevant factors as determined by the lending institution. Upon acceptance of the linked deposit application by the Office of the State Treasurer and acceptance of the linked deposit to be placed with the lending institution, the interest rate on the loan shall be no greater than seventy percent (70%) of the above rate certified by the lending institution. The loan rate must be approved by the Office of the State Treasurer, and, upon placement of the linked deposit, the loan rate shall remain fixed for the period agreed to by the lending institution and the Office of the State Treasurer, not to exceed a period of five (5) years and subject to adjustment under the terms and conditions described in section (4). (2) The treasurer’s office will advise lending institutions of the applicable category loan rate upon request and at the time a deposit offer is made under the program. (3) The treasurer’s office will advise lending institutions of the deposit rate and loan rate at the time a deposit offer is made under the program. (4) Upon placement of a linked deposit, the interest rate for the loan shall remain fixed for the term; except, if it so provides in the loan agreement, the lending institution may increase the interest rate on the loan, up to the category rate established by the treasurer, if the treasurer determines that the borrower has not complied with the law relating to the Linked Deposit Program and, as a result, the treasurer has received the full market interest rate on the deposit from the lending institution. AUTHORITY: sections 30.260 and 30.760, RSMo Supp. 2009.* Emergency rule filed March 7, 1986, effective March 27, 1986, expired July 14, 1986. Original rule filed June 26, 1986, effective Oct. 15, 1986. Emergency amendment filed June 26, 1986, effective July 6, 1986, expired Nov. 3, 1986. Emergency amendment filed Sept. 17, 1993, effective Sept. 27, 1993, expired Jan. 25, 1994. Emergency amendment filed Jan. 19, 1994, effective Jan. 29, 1994, expired May 28, 1994. Emergency amendment filed Jan. 23, 1995, effective Feb. 2, 1995, expired June 1, 1995. Amended: Filed Jan. 23, 1995, effective June 30, 1995. Amended: Filed Nov. 2, 2001, effective May 30, 2002. Emergency amendment filed Oct. 28, 2009, effective Nov. 7, 2009, expired May 5, 2010. Amended: Filed Oct. 28, 2009, effective April 30, 2010. *Original authority: 30.260, RSMo 1939, amended 1945, 1957, 1973, 1983, 1986, 1988, 1997, 2002, 2005, 2009 and 30.760, RSMo 1986, amended 1987, 1988, 1989, 1991, 1992, 1993, 2004, 2005, 2007, 2008, 2009.