Oklahoma § 74-5063.3 - Credit Enhancement Reserve Fund - Creation Management, administration and utilization - Legislative intent

§ 74-5063.3. Credit Enhancement Reserve Fund - Creation Management, administration and utilization - Legislative intent

A. There is hereby created a fund to be known as the Credit

Enhancement Reserve Fund. The Fund shall be managed, administered

and utilized by the Oklahoma Development Finance Authority in

accordance with the provisions of this act.

B. It is the intent of the Legislature that the Fund be selfsupporting from insurance premiums charged to borrowers and that

such charges be based on sound actuarial practices. The proceeds of

obligations to which credit enhancement is granted shall be used,

except for unusual circumstances with exceptionally strong public

benefits, for expansion capital to businesses and to make

improvements or additions to real or personal property in the case

of private or nonprofit use borrowers. Use of the Fund for business

buyouts or refinancing shall be minimal. The Authority shall give

reasonable priority to loans in rural areas. In implementing the

provisions of the Credit Enhancement Reserve Fund Act, the Authority

shall generally limit the granting of credit enhancement by the Fund

to high to moderate credit quality revenue bonds or other

obligations issued by the Authority, except as provided in Section 5

of this act and Sections 5063.4b and 5063.4i of this title. High to

moderate credit quality means revenue bonds or other obligations of

the Authority judged to be of low to moderate risk, meaning that an

obligation to which credit enhancement is granted demonstrates a

strong likelihood of repayment according to its terms. Credit

quality shall be determined by the Program Development and Credit

Review Committee. To the extent possible, the Fund shall be

leveraged with private financial assistance for Fund-backed

obligations for private or nonprofit borrowers.

Added by Laws 1987, c. 222, § 73, operative July 1, 1987. Amended

by Laws 1990, c. 342, § 7, emerg. eff. May 30, 1990; Laws 1993, c.

275, § 39, eff. July 1, 1994; Laws 1994, c. 285, § 7, eff. July 1,

1994.