§ 31-106. Authority powers and duties; penalty for false statements.

(a)

(1)

In addition to any other powers granted or duties imposed upon it, the Authority shall:

(A)

Coordinate activities and consult with the Maryland Higher Education Supplemental Loan Authority; and

(B)

Have the powers and duties set forth in this Section.

(2)

In consultation with the Maryland Higher Education Supplemental Loan Authority, the Authority may adopt any rule or regulation necessary to carry out its powers and duties.

(3)

The Authority may delegate to one or more of its members, or to one or more of its officers, agents and employees, such powers and duties as it may deem proper.

(b)

The Authority may:

(1)

Adopt an official seal;

(2)

Maintain an office at the place or places it may designate;

(3)

Participate in legal proceedings in the name of the Authority; and

(4)

Sue and be sued in its own name, plead and be impleaded.

(c)

The Authority may establish criteria for and guidelines encompassing the types of and qualifications for education loan financing programs which shall include the criteria for determining whether an educational institution qualifies as an "institution" within the meaning of this Subtitle, whether an institution is located within the Washington, D.C. Metropolitan Area, whether an institution or group of institutions has or reasonably can be expected to have, if approved for participation in a program of the Authority, a substantial number of residents of the County as full-time students, and those eligibility standards for borrowers that the Authority determines may be necessary or desirable to effectuate the purposes of this Subtitle and which shall include provisions that each student have a certificate of admission or enrollment at a participating institution, that each student be a resident of Prince George's County, that each borrower satisfy the financial qualifications that the Authority establishes and that each student and each borrower submit to the participating institution information that may be required by the Authority. In establishing criteria for the determination of County residency the Authority may utilize the criteria established by the University of Maryland for the determination of residency, as applicable, or may establish such other or additional criteria as are consistent with law.

(d)

The Authority may contract with financial institutions and other organizations determined by the Authority to be qualified to provide loan origination and servicing services to provide assistance in prequalifying borrowers for education loans and for servicing and administering education loans and any lending institution's loan series portfolio. Any education loan fee may include a portion to cover the cost of any servicing organization's assistance prorated on a basis deemed fair by the Authority.

(e)

To insure the marketability of its bonds and the adequacy of the security for the payment of the principal of and interest on its bonds, the Authority may consult with the Maryland Higher Education Supplemental Loan Authority to establish criteria governing:

(1)

The eligibility of any institution to participate in its program as a participating institution or lending institution;

(2)

The eligibility of any institution affiliate to participate in its program as a lending institution;

(3)

The eligibility of students to participate in its program;

(4)

The making of Authority loans and education loans;

(5)

Provisions for default;

(6)

The establishment of default reserve funds;

(7)

The purchase of default insurance; and

(8)

Provisions for the establishment of prudent debt service reserves and for the furnishing by lending institutions or participating institutions of such additional guarantees of or other security for education loans, Authority loans, or the Authority's bonds.

(f)

(1)

The Authority may establish limitations on the principal amounts and the terms of education loans, criteria regarding the qualifications and characteristics of borrowers, and procedures for allocating Authority loans and education loans among participating institutions and lending institutions.

(2)

Any person who knowingly and willfully falsifies or conceals a material fact in connection with an application for funds from the Authority is guilty of a misdemeanor.

(3)

Each applicant for funds from the Authority shall receive notice from the Authority of the conduct that constitutes a violation of this Section prior to the awarding of any loan.

(4)

A person convicted under this Section is subject to a fine of not more than Five Thousand Dollars ($5,000) or imprisonment for not more than one (1) year, or both.

(g)

The Authority may:

(1)

Issue bonds for any of its corporate purposes and borrow funds as working capital for its operations;

(2)

Fix, revise, charge and collect rates, fees and charges for the services furnished or to be furnished by the Authority and contract with any person, including financial institutions, loan originators, servicers, administrators, issuers of letters of credit, and insurers;

(3)

Employ consultants, attorneys, accountants, financial experts, loan processors, bankers, managers, and other employees and agents as may be necessary in its judgment, and fix their compensation;

(4)

Establish regulations, criteria or guidelines with respect to Authority loans, education loans and education loans series portfolios;

(5)

Receive and accept from any source and in any form, loans, appropriations, contributions, gifts, or grants for or in aid of any Authority purpose or education loan financing program and, when required, use the funds, property or labor only for the purpose for which it was provided;

(6)

Make Authority loans to lending institutions and require that the proceeds of the loans be used for making education loans and paying related loan costs and fees;

(7)

Make education loans to borrowers and require that the proceeds of the loans be used for the payment of the cost of attendance at a participating institution;

(8)

Charge to and apportion among borrowers, lending institutions and participating institutions its administrative and operating costs and expenses incurred in the exercise of its powers and duties; and

(9)

Do all acts and things necessary or convenient to carry out its corporate purposes and in such manner and upon such procedures as the Authority may in its discretion from time to time determine or prescribe.

(h)

Notwithstanding any other provision contained in this Subtitle, the Authority may commingle and pledge as security for a series or issue of bonds:

(1)

The education loans to be made from the proceeds of such issue, including the education loan series portfolios and some or all future education loan series portfolios of the lending institutions; and

(2)

The loan funding deposits of lending institutions or participating institutions if education loan series portfolios and other security and moneys set aside in any fund or funds pledged for any series or issue of bonds are held for the sole benefit of the series or issue separate and apart from education loan series portfolios and other security and moneys pledged for any other series or issue of bonds of the Authority.

(i)

The Authority may:

(1)

Examine records and financial reports of participating institutions and lending institutions; and

(2)

Examine records and financial reports of any contractor organization or institution retained by the Authority.

(j)

The Authority shall require that:

(1)

Authority loans to lending institutions be used solely to make education loans;

(2)

Participating institutions require each borrower under an education loan use the proceeds solely for the cost of attendance; and

(3)

Each borrower certify that proceeds shall be used solely for the cost of attendance.

(Chapter 704, Laws of Md., 1986)

Editor's note

The penalty for a conviction under this Section was enacted by the General Assembly of Maryland.