Page:United States Statutes at Large Volume 100 Part 2.djvu/315

 PUBLIC LAW 99-498—OCT. 17, 1986

100 STAT. 1417

"(4) DISCLOSURE REQUIRED.—The lender shall disclose to the borrower the amount and method of calculating the origination fee. "(5)

PROHIBITION ON DEPARTMENT COMPELLING ORIGINATION

FEE COLLECTIONS BY LENDERS.—Nothing in this subsection shall be construed to permit the Secretary to require any lender that is making loans that are insured or guaranteed under this part, but for which no amount will be payable for interest under section 428(a)(3)(A) or for special allowances under subsection (b) of this section, to collect any origination fee or to submit the sums collected as origination fees to the United States. The Secretary shall, not later than January 1, 1987, return to any such lender any such sums collected before the enactment of this paragraph, together with interest thereon.

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"(d)

LENDING FROM PROCEEDS OF TAX EXEMPT OBLIGATIONS.— "(1) PLAN FOR DOING BUSINESS REQUIRED.—In order for the

state and local governments.

holders of loans any portion of which were made or purchased 1 with funds obtained by the holder from an Authority issuing 5 obligations, the income from which is exempt from taxation under the Internal Revenue Code of 1954, to be eligible to 26 USC l et seq. receive a special allowance under subsection (b)(2) of this sec; tion, the Authority shall submit to the Governor of the State, and to the guaranty agency determined by the Secretary to be 1 the principal guaranty agency for the State, a plan for doing business. The Governor shall, after consultation with the guaranty agency, approve or disapprove the plan within 30 days of the receipt of the proposed plan from the Authority. Such plan J shall also be transmitted to the Secretary within 60 days after approval. "(2) CONTENTS OF PLAN.—Each such plan shall contain provi/1 r ~ sions designed to assure that— "(A) no eligible lender in the area served by the Authoraj 4i* ity will be excluded from participation in the program of the Authority and all eligible lenders may participate in the program on the same terms and conditions if eligible 9>^. lenders are going to participate in the program; "(B) no director or staff member of the Authority who receives compensation from the Authority may own stock in, or receive compensation from, any agency that would contract to service and collect the loans of the Authority; 'J "(C) student loans will not be purchased from participat-iu S'TU. ^ ing lenders at a premium or discount amounting to more i than 1 percent of the unpaid principal amount borrowed plus accrued interest to the date of acquisition, but a ' reasonable loan transfer fee may be paid by the purchaser; 'i"(D) the Authority will, within the limit of funds available and subject to the applicable State and Federal law, V make loans to, or purchase loans incurred by, all eligible "t students who are residents of, or who attend an eligible " ? institution within, the area served by the Authority; - n ^ «s/i i i "(E) the Authority has a plan under which the Authority &^will pursue the development of new lender participation in a continuing program of benefits to students together with assurances of existing lender commitments to the program; v i

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and

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"(F) there will be an annual audit of the Authority by a certified public accounting firm which will include review

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