(1) The Oregon Business Development Department shall enter into a written agreement with each lender that accepts an award offered under ORS § 285B.787.

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(2) A written agreement entered into pursuant to this section must:

(a) Provide for the creation of a loan loss reserve account by the lender for the deposit of moneys awarded under ORS § 285B.787 out of which the lender may be reimbursed for principal losses incurred due to defaults on qualified loans;

(b) Provide that, notwithstanding ORS Chapter 293 or 295, the lender shall establish and maintain the loan loss reserve account with a financial institution, as defined in ORS § 706.008, in accordance with such policies as the department may adopt;

(c) Require the lender to designate, when a loan is made, whether the loan is a qualified loan;

(d) Provide that, upon default on a qualified loan, the lender shall, subject to subsection (3) of this section, liquidate the borrower’s assets and exhaust all lawful remedies for the benefit of the lender before the lender may recover the outstanding principal balance of the loan from the lender’s loan loss reserve account;

(e) Provide that the liability of the State of Oregon and the department under the written agreement is limited to the amount of moneys awarded and credited to the lender’s loan loss reserve account; and

(f) Require the lender to file an annual report in accordance with ORS § 285B.794.

(3)(a) Notwithstanding the requirement under subsection (2)(d) of this section to liquidate a borrower’s assets and exhaust all lawful remedies, the department, upon request of a lender, may waive the lender’s obligations under subsection (2)(d) of this section if:

(A) The original principal amount of the loan was not greater than $25,000; and

(B) The borrower had a personal net worth not greater than $75,000 at both the time of application and the time of default.

(b) A lender that does not comply with subsection (2)(d) of this section or paragraph (a) of this subsection shall be considered to have breached the written agreement the lender entered into pursuant to subsection (1) of this section. The department, at its sole discretion, may take assignment of the loan and pursue collection efforts under subsection (2)(d) of this section.

(4) Qualified lenders that accept awards under ORS § 285B.787 shall, within 10 years following the date on which the written agreement entered into pursuant to subsection (1) of this section becomes binding, originate qualified loans with a total principal amount equal to at least four times the amount of the moneys awarded. [2021 c.676 § 4]

See note under 285B.780.

[1997 c.835 § 39; 1999 c.1104 § 13; 2001 c.292 § 6; renumbered 285C.420 in 2003]