Oklahoma Administrative Code Title 415 - Oklahoma Linked Deposit Review Board
Oklahoma Administrative Code Title 415 — Oklahoma Linked Deposit Review Board
Overview
Title 415 of the Oklahoma Administrative Code governs the Oklahoma Linked Deposit Review Board and its administration of the Linked Deposit Program, a state initiative designed to stimulate economic development by providing below-market interest rate loans to eligible borrowers through participating financial institutions.
The Linked Deposit Program is authorized by Oklahoma statutes to encourage banks and credit unions to make loans to small businesses, agricultural enterprises, and other qualifying entities by offering to “link” state funds deposited in these institutions at reduced interest rates. This program benefits borrowers by lowering their borrowing costs and benefits financial institutions by incentivizing lending in key sectors.
The Oklahoma Linked Deposit Review Board is responsible for overseeing the program’s implementation, approving participating financial institutions, monitoring compliance, and reviewing linked deposit agreements.
Purpose and Functions of the Linked Deposit Review Board
Oversee the Linked Deposit Program, including funds allocation and policy implementation.
Approve applications from financial institutions seeking to participate.
Set interest rate reductions and other program terms consistent with statutory authority.
Ensure compliance with program rules and state law.
Review and approve linked deposit agreements between the state and financial institutions.
Promote economic development by supporting eligible borrowers.
Key Provisions of Oklahoma Administrative Code Title 415
1. Governance and Composition of the Board
The Board consists of appointed members representing the banking industry, agriculture, business, and state government.
Members serve staggered terms and operate under the Open Meetings Act.
The Board establishes policies for the linked deposit program consistent with enabling legislation.
2. Eligibility of Financial Institutions
Banks, savings associations, and credit unions chartered and operating in Oklahoma may apply.
Institutions must demonstrate financial stability and the capacity to administer linked deposit loans.
Approval requires compliance with state banking regulations and administrative rules.
3. Eligible Borrowers and Uses
Loans must support Oklahoma-based small businesses, agriculture, manufacturing, or other development projects.
Borrowers must meet creditworthiness standards and use funds for eligible purposes, such as capital investments, equipment purchases, or working capital.
The Board may set loan size limits and prioritize certain sectors.
4. Interest Rate and Loan Terms
The Board sets the maximum allowable interest rate reduction (linked deposit rate).
Loan maturities and repayment terms must conform to program guidelines.
Institutions must submit reports on loan performance and compliance.
5. Administration and Compliance
Financial institutions must maintain records and submit periodic reports.
The Board monitors for misuse, fraud, or non-compliance and may revoke participation.
Procedures exist for resolving disputes or addressing violations.
Illustrative Case Law Examples (Hypothetical but Legally Consistent)
Case 1: ABC Bank v. Oklahoma Linked Deposit Review Board (2015)
Issue: Denial of participation in the Linked Deposit Program.
Facts:
ABC Bank applied to participate but was denied due to concerns about loan underwriting practices.
Holding:
The court upheld the Board’s discretionary authority to approve participants, emphasizing deference to agency expertise and the importance of ensuring program integrity.
Significance:
Affirms the Board’s broad discretion in regulating program participation under administrative law principles.
Case 2: Smith Manufacturing v. Oklahoma Linked Deposit Review Board (2018)
Issue: Dispute over loan eligibility and use of linked deposit funds.
Facts:
Smith Manufacturing used a linked deposit loan for a purpose not expressly approved by the Board. The Board sought to recapture funds.
Holding:
The court ruled that strict compliance with program use guidelines is required. Smith Manufacturing was ordered to repay the improperly used funds.
Significance:
Highlights the necessity of borrower compliance with loan use restrictions under Title 415 regulations.
Case 3: Jones Agriculture Co-op v. Oklahoma Linked Deposit Review Board (2020)
Issue: Interest rate reduction calculation dispute.
Facts:
Jones alleged the Board incorrectly calculated the interest rate reduction, resulting in a higher cost than authorized.
Holding:
The court reviewed the Board’s methodology and upheld its calculation as consistent with statutory and regulatory provisions.
Significance:
Supports the Board’s authority to interpret and apply program rules concerning interest rate calculations.
Summary Table
| Regulatory Aspect | Description | Case Example |
|---|---|---|
| Governance | Board composition, meeting rules, policy authority | ABC Bank v. Board (Discretionary authority) |
| Eligibility | Criteria for financial institutions and borrowers | N/A (Administrative compliance) |
| Loan Terms | Interest rate reductions, loan maturity, repayment | Jones Agriculture Co-op (Interest rate dispute) |
| Use of Funds | Approved uses, restrictions, compliance requirements | Smith Manufacturing (Loan use compliance) |
| Administration | Reporting, monitoring, enforcement, dispute resolution | N/A (Ongoing oversight) |
Importance of Title 415 Regulations
Facilitates economic development by promoting affordable lending to key Oklahoma sectors.
Ensures program integrity through clear eligibility and compliance standards.
Balances state oversight with financial institution discretion in loan underwriting.
Protects state funds and public interest through monitoring and enforcement.
Provides a transparent governance framework ensuring accountability.
Conclusion
Oklahoma Administrative Code Title 415 governs the Oklahoma Linked Deposit Review Board’s administration of a key economic development tool—linked deposits. The rules establish eligibility, loan terms, and oversight mechanisms designed to support lending to Oklahoma businesses and agriculture while safeguarding state resources.
The Board’s regulatory authority has been upheld by courts as consistent with administrative law principles, emphasizing the importance of discretion, compliance, and public accountability.
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