North Dakota Code 6-09.11-03 – Loans – Participation by the Bank of North Dakota
1. The Bank of North Dakota may make available an appropriate amount of funds to purchase participation interests in loans made by financial institutions for the purposes as set forth in section 6-09.11-04.
Terms Used In North Dakota Code 6-09.11-03
- Bank: means any national bank, national banking association, corporation, state bank, state banking association, or savings bank, whether organized under the laws of this state or of the United States, engaged in the business of banking. See North Dakota Code 6-01-02
- Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
- You are late making a payment or commit some other default, triggering an increase to a penalty rate
- The bank changes the terms of your account and you do not reject the change.
- The rate expires (if the rate was fixed for only a certain period of time).
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
a. Interest charged on a participation interest purchased by the Bank under this section may not be greater than one percent less than the Bank’s base rate as in effect from time to time and may float.
b. A loan may be a fixed rate at the Bank’s then current base rate for up to ten years. The rate during the remaining term of the loan floats at the Bank’s base rate as in effect from time to time.
c. However, the interest rate may not exceed eleven percent during the course of the loan. The Bank may charge for necessary and reasonable fees as determined by the industrial commission.
2. The amount of a participation interest purchased by the Bank under this section may not be greater than the lesser of an amount determined by the Bank or ninety percent of the loan amount.