Sec. 16. A holder of a guaranteed loan shall exercise reasonable care and diligence in the making and collection of loans under this chapter. If the commission finds that reasonable care and diligence are not being exercised by a holder of a guaranteed loan, the commission may:
(1) withdraw its guarantee on an individual borrower basis, allowing the approved lender to continue participation in the program, after reasonable notice to the lender; or
(2) disqualify the approved lender from the guarantee of further loans upon finding, after reasonable notice and hearing, that the lender has substantially failed to exercise reasonable care and diligence in the making and collection of loans under this chapter.
These disqualifications shall continue until the commission is satisfied that the lender will exercise reasonable care and diligence in the future.