STATE OF CALIFORNIA
CALIFORNIA POLLUTION CONTROL
FINANCING AUTHORITY
915 Capitol Mali, Room 457
. Sacramento, CA 95814
Telephone: (916) 654-56.10
Telecopier: (916) 657-4821
MElYlBERS,
Bill Lockyer, Chair
State Treasl
January 8,2009 John Chiang
Slate Controller
Michael C. Genest, Director
De})artment 0/ Finance
Re: Troubled Lender Policy EXECUTIVE DIRECTOR:
Michad Paparian
Dear CalCAP Lender:
In order to mitigate the potential exposure of the California Pollution Control Financing
Authority (CPCF A) funds ondeposit in the loan loss reserve accounts, California Capital Access
Program (CalCAP) staffwill conduct a monthly review, using BauerFinancial, to gauge the
financial condition of all the Participating Financial Institutions (PFIs). BauerFinancial analyzes
and rates the financial condition of the banking industry on a scale from zero to five stars. All
PFls are also subject to a quarterly review of IDC Financial Publishing Inc. 's Bank Financial
Quarterly, S&L-Savings Bank Financial Quarterly, or Credit Union Financial Profiles, or
Highline Inc:'s Bank Quarterly, or S&L Quarterly, or successor publication approved by the
Executive Director. If a PFI experiences low ratings, there will be a period of additional review.
If the financial viability of the PFI worsens, the Executive Director may compel the PFI to
transfer its funds to the CalCAP Trustee Bank. Regulation §8073 (b) states "the Loss Reserve
Account shall, in the Authority's sole determination, be held by the Participating Financial
Institution or by a Program Trustee."
Thank. you for your cooperation. If you have any questions, please contact Aaron Todd, Program
Manager, at (916) 654-5740.
Sincerely,
<~&---------
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Michaet'Paparian
Executive Director
cc: Mark Golder, Vice President
Bank of New York Mellon Trust Company, N.A.