(a) The commissioner shall, with the assistance of the Superintendent of Financial Services, market the program to lenders and solicit the participation of lenders in the program. In order to participate in the program, a lender shall:

1. (1) be authorized to accept linked deposits as follows:

   1. (i) if a commercial bank, be an authorized depository of State funds, or become an authorized depository of State funds by executing such undertakings and collateral agreements as are required by each authorized depositor; or

   2. (ii) if a thrift, farm credit system institution or the New York State Business Development Corporation:

      1. (a) be determined by an authorized depositor as eligible to accept linked deposits based upon criteria applied by the authorized depositor in making determinations under section 105 of the State Finance Law;
      2. (b) agree to participate in the program;
      3. (c) secure any linked deposit in the same manner as moneys deposited pursuant to section 105 of the State Finance Law; and
      4. (d) pledge assets or furnish other security satisfactory in form and amount to the authorized depositor for the repayment of moneys; and
2. (2) execute a linked deposit agreement with each authorized depositor. Such agreement shall be in such form as required by the authorized depositors and shall govern linked deposits made by the authorized depositors in connection with the participating lender's linked loans. Upon making a linked loan, the participating lender shall file with the authorized depositor a written linked loan designation, in such form as shall be required by the authorized depositor, which shall serve to identify the linked deposit relating to such loan as a deposit governed by the linked deposit agreement. In no event shall any defect in a linked deposit agreement be asserted as a defense by a borrower on a linked loan.