1. (a) A Participating Financial Institution shall be authorized to withdraw from the Program after giving written notice to the Authority. Such notice shall specify either:

   1. (1) that the Participating Financial Institution waives any further interest in the Loss Reserve Account (including for the reason that all Qualified Loans covered by the Loss Reserve Account have been repaid); or
   2. (2) that the Participating Financial Institution will not enroll any further loans under the Program but that the Loss Reserve Account shall continue in existence to secure all Qualified Loans enrolled prior to such notice until such loans mature or are charged off.
2. (b) After receipt of a notice under subsection (a)(1) or receipt of a certificate from a Participating Financial Institution which has withdrawn from the Program pursuant to subsection (a)(2), certifying that all Qualified Loans secured by the Loss Reserve Account have been repaid and that there are no pending claims for reimbursement under Section 8074, the remaining balance in the Loss Reserve Account shall be distributed to the Authority; provided that such moneys shall be distributed to the Authority and to the Participating Financial Institution in the amount of the Authority Share and the Participating Financial Institution Share, respectively.
3. (c) For purposes of this Section 8076, for loans enrolled in the Program, and corresponding Contributions and Fees made, on or after August 15, 2017, “Participating Financial Institution Share” means the ratio of the total amount of corresponding Participating Financial Institution Fees made to the Loss Reserve Account, to the total amount of corresponding Authority Contributions and Borrower and Participating Financial Intuition Fees made to such Loss Reserve Account; and “Authority Share” means 100 minus the Participating Financial Institution Share.
4. (d) For purposes of this Section 8076, for loans enrolled in the Program, and corresponding Contributions and Fees made, prior to August 15, 2017, the “Participating Financial Institution Share” means the ratio of the total amount of corresponding Borrower and Participating Financial Institution Fees made to the Loss Reserve Account, to the total amount of corresponding Contributions and Fees made to such Loss Reserve Account; and “Authority Share” means 100 minus the Participating Financial Institution Share.

5. (e) The Executive Director shall be authorized to terminate participation of a Participating Financial Institution in the Program, by notice in writing, upon the occurrence of any of the following:

   1. (1) entry of a cease and desist order, regulatory sanction, or any other action against the Participating Financial Institution by a regulatory agency that may impair its ability to participate in the Program;
   2. (2) failure of the Participating Financial Institution to abide by the Law or this Article; or
   3. (3) failure of the Participating Financial Institution to enroll any Qualified Loans under the Program for a period of one year.

   4. (4) Provision of false or misleading information regarding the Participating Financial Institution to the authority, or failure to provide the authority with notice of material changes in submitted information regarding the Participating Financial Institution.

      In the event of such termination, the Participating Financial Institution shall not be authorized to enroll any further Qualified Loans, but all previously enrolled Qualified Loans shall continue to be covered by the Loss Reserve Account until they are paid, claims are filed, or the Participating Financial Institution withdraws from the Program pursuant to Section 8076(a)(1).

6. (f) If for a consecutive 12-month period the amount in the Loss Reserve Account continuously exceeds the Outstanding Principal Balance of all the Participating Financial Institution's Qualified Loans made since the beginning of the Program, the Executive Director shall be authorized to withdraw any such excess to bring the Loss Reserve Account down to an amount equal to 100 percent of the Outstanding Principal Balance. Distributions shall be made to the Authority and to the Participating Financial Institution based on the Authority Share and the Participating Financial Institution Share, respectively.

Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.2, Division 27, Health and Safety Code.

History

1. New section filed 3-21-94 as an emergency; operative 3-21-94 (Register 94, No. 12). This filing was deemed an emergency by Health and Safety Code section 44520(b). A Certificate of Compliance must be transmitted to OAL by 9-19-94 or the emergency regulation will be repealed by operation of law on the following day.

2. Certificate of Compliance as to 3-21-94 order including amendment of Note transmitted to OAL 9-16-94 and filed 10-31-94 (Register 94, No. 44).

3. Amendment of subsection (d) filed 2-6-96 as an emergency pursuant to Health and Safety Code section 44520(b); operative 2-6-96 (Register 96, No. 6). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 8-5-96 or emergency language will be repealed by operation of law on the following day.

4. Certificate of Compliance as to 2-6-96 order transmitted to OAL 8-2-96 and filed 9-10-96 (Register 96, No. 37).

5. Amendment of subsections (b) and (d) filed 12-23-98; operative 12-23-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 52).

6. Amendment of subsection (c)(1) filed 12-29-2005 as an emergency pursuant to Health and Safety Code section 44520(b); operative 12-29-2005 (Register 2005, No. 52). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 6-27-2006 or emergency language will be repealed by operation of law on the following day.

7. Certificate of Compliance as to 12-29-2005 order transmitted to OAL 4-21-2006 and filed 6-1-2006 (Register 2006, No. 22).

8. New subsection (c)(4) filed 2-11-2009 as an emergency; operative 2-11-2009 (Register 2009, No. 7). A Certificate of Compliance must be transmitted to OAL by 8-10-2009 or emergency language will be repealed by operation of law on the following day.

9. Certificate of Compliance as to 2-11-2009 order transmitted to OAL 5-29-2009 and filed 6-23-2009 (Register 2009, No. 26).

10. Amendment of subsections (a)(2), (b) and (d) filed 8-7-2017 as an emergency; operative 8-7-2017 pursuant to Health and Safety Code section 44520(b) (Register 2017, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-5-2018 or emergency language will be repealed by operation of law on the following day, pursuant to Health and Safety Code section 44520(b).

11. Certificate of Compliance as to 8-7-2017 order, including amendment of subsection (c), new subsection (d) and subsection relettering, transmitted to OAL 1-31-2018 and filed 3-15-2018; amendments operative 3-15-2018 pursuant to Government Code section 11343.4(b)(3) (Register 2018, No. 11).

12. Editorial correction of subsection (b) (Register 2020, No. 31).