N.Y. Comp. Codes R. & Regs. tit. 5 § 160.6

Current through Register Vol. 46, No. 50, December 11, 2024

Section 160.6 - Liability; early repayment; withdrawal; sale or assignment

(a) No liability shall be imposed on the State or any of its departments or employees for payment or delays in payment of the principal of or interest on a linked loan.

(b) Any delay in payment or default on a linked loan shall in no way affect the linked deposit agreement between the lender and the authorized depositor.

(c) In the event the interest rate of the linked loan is increased as a consequence of default on or renegotiation of the linked loan or the linked loan is charged off, the lender shall give the authorized depositor prompt notice of such event, and the authorized depositor shall thereafter withdraw, without penalty for early withdrawal, the linked deposit on not less than seven days prior written notice to the lender.

(d) Upon prepayment of all or part of a linked loan, the lender shall within 30 days give the authorized depositor notice of such payment, and the authorized depositor shall thereafter withdraw, without penalty for early withdrawal, all or a pro rata part, as the case may be, of the linked deposit upon not less than seven days' prior written notice to the lender. In such event, the interest rate payable on the linked deposit or the portion thereof being withdrawn, from the date of prepayment of the linked loan to the date of withdrawal shall be the interest rate upon which the linked deposit interest rate was calculated without regard to the applicable basis point reduction.

(e) Upon sale or assignment of all or part of a linked loan, the lender shall within 30 days give the authorized depositor notice of such sale or assignment, and the authorized depositor shall thereafter withdraw, without penalty for early withdrawal, all or pro rata part, as the case may be, of the linked deposit upon not less than seven days prior written notice to the lender. In such event, the interest rate payable on the linked deposit or the portion thereof being withdrawn, from the date of sale or of assignment of the linked loan to the date of withdrawal shall be the interest rate upon which the linked deposit interest rate was calculated without regard to the applicable basis point reduction.

N.Y. Comp. Codes R. & Regs. Tit. 5 § 160.6