1. When a financial institution originates a loan pursuant to sections 620.1045 to 620.1063 to a borrower, such financial institution shall set aside an amount into a program loss reserve account. Such amount shall be agreed upon by it and the borrower, and shall not be less than one and one-half percent or more than three and one-half percent of the principal of the loan. The borrower shall deposit into the program loss reserve account an amount equal to the amount set aside by the financial institution. The financial institution may loan the borrower the amount deposited on behalf of the borrower and such amount may be added to the principal of the loan.

2. The financial institution shall certify to the department, on forms prescribed by the department and accompanied by any documentation required by the department, that such financial institution has made a loan pursuant to sections 620.1045 to 620.1063 and has set aside a contribution and has collected from the borrower and deposited on behalf of the borrower an equal amount into the program loss reserve account. Upon receipt of such certification, the department shall verify that such certification complies with the provisions of sections 620.1045 to 620.1063. The department shall then transfer to the financial institution from the Missouri capital access program an amount equal to the combined amounts of the institution and the borrower which have been deposited in the program loss reserve account, except that for the first two million dollars in loans made by the financial institution pursuant to the provisions of sections 620.1045 to 620.1063, the department shall transfer to the institution an amount equal to one hundred fifty percent of the combined total amount deposited by the institution and the borrower in the program loss reserve account.

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3. A financial institution which suffers a loss on any loan made pursuant to sections 620.1045 to 620.1063 may, upon application and providing proof satisfactory to the department, recover from the program loss reserve account its losses, which may include principal, up to six months accrued interest and any collection expenses. If the department approves the financial institution’s application for recovery provided for by this subsection, the institution, at the request of the department, shall be required to assign to the department all rights and interests in such loan for which a recovery was approved. The department shall then have legal standing to pursue the collection of such loan.