1. (1) Limitation, suspension, or termination proceedings shall not affect a lender's responsibilities or rights to interest benefits, special allowance payments, and claim payments that are based on the lender's prior participation in the educational loan programs, except as provided in subrule (3) of this rule and the provisions of R 390.1488.

2. (2) A lender limitation may result in any of the following:

   1. (a) A limit on the number or total amount of loans that a lender may make, purchase, or hold.
   2. (b) A limit on the number or total amount of loans that a lender may make to, or on behalf of, students at a particular school.
   3. (c) Conditions required under the provisions of R 390.1487, the act, the secretary, and the authority.

3. (3) After the effective date of a suspension of a lender's eligibility, the authority shall not guarantee new loans for that lender during the period of suspension. The authority may also prohibit the lender from making further disbursements on a loan for which a guaranty commitment has already been issued. The period of suspension shall not be for more than 60 days, unless 1 of the following conditions exists:

   1. (a) The lender and the designated official agree to an extension where the lender has not requested a hearing.
   2. (b) The designated official begins a limitation or termination proceeding.
   3. (c) If the designated official begins a limitation or termination proceeding before the suspension period ends, the designated official may extend the suspension period until the completion of that proceeding, including any appeal to the executive director.
4. (4) After the effective date of a termination of a lender's eligibility, the authority shall not guarantee new loans made by that lender. The authority may also prohibit the lender from making further disbursements on a loan for which a guaranty commitment has already been issued.

History: 1990 AACS.