[Federal Register Volume 61, Number 228 (Monday, November 25, 1996)]
[Rules and Regulations]
[Pages 59827-59828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29993]
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DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
12 CFR Part 1806
RIN 1505-AA71
Bank Enterprise Award Program
AGENCY: Community Development Financial Institutions Fund, Department
of the Treasury.
ACTION: Amendments to interim rule.
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SUMMARY: The Department of the Treasury is issuing revisions to the
interim regulations for the Bank Enterprise Award (BEA) Program
published in the Federal Register on October 19, 1995 and subsequently
amended on January 23, 1996 and February 29, 1996. The BEA Program was
authorized by the Community Development Banking and Financial
Institutions Act of 1994. The program is designed to encourage insured
depository institutions to make equity investments in or otherwise
support Community Development Financial Institutions and/or increase
lending and other services provided within distressed communities.
DATES: This interim rule is effective November 25, 1996. Comments must
be received on or before December 26, 1996.
ADDRESSES: All questions or comments concerning this interim rule
should be addressed to the Director, Community Development Financial
Institutions Fund, Department of the Treasury, 1500 Pennsylvania Ave.,
N.W., Washington, DC 20220.
FOR FURTHER INFORMATION CONTACT: Kirsten S. Moy, Director, Community
Development Financial Institutions Fund at (202) 622-8662. (This is not
a toll free number.)
SUPPLEMENTARY INFORMATION:
I. General
Executive Order (E.O.) 12866
It has been determined that this regulation is not a significant
regulatory action as defined in E.O. 12866.
Regulatory Flexibility Act
Because no notice of proposed rulemaking is required for this
interim rule, the provisions of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.) do not apply. Moreover, the Department of the
Treasury finds that any economic or other consequences of this interim
rule are a direct result of the implementation of statutory provisions.
Administrative Procedures Act
Pursuant to 5 U.S.C. 553(a)(2), these amendments are not subject to
the provisions in 5 U.S.C. 553(b) concerning notice and public comment
or the delayed effective date provisions of 5 U.S.C. 553(d).
Furthermore, the Department for good cause finds that notice and public
comment prior to effect are impracticable and contrary to the public
interest. These revisions are intended to amend the interim regulations
for the BEA Program that were published in the Federal Register on
October 19, 1995 and subsequently amended on January 23, 1996 and
February 29, 1996. The purpose of the revisions is to give applicants
greater flexibility as to the type of instruments that will be
considered Equity Investments, reduce the burden associated with
reporting certain Eligible Development Activities, and permit
applicants that achieved less than 90 percent, as opposed to less than
90 percent but at least 75 percent, of their projected activities to
receive a partial, pro-rated award.
Catalog of Federal Financial Assistance Number Bank Enterprise
Award Program--21.021.
II. Background
On October 19, 1995, the Department published interim regulations
in the Federal Register for the Bank Enterprise Award Program (12 CFR
part 1806). These interim regulations were amended pursuant to
revisions published in the Federal Register on January 23, 1996 and
corrections to these revisions published in the Federal Register on
February 29, 1996. Subsequent to the publication of such interim
regulations, as amended, the Department has developed policies designed
to clarify several existing provisions in the interim regulations. The
purpose of these amendments is to give applicants greater flexibility
as to the type of instruments that will be considered Equity
Investments, reduce the burden associated with reporting certain
Eligible Development Activities, and permit applicants that achieved
less than 90 percent, as opposed to less than 90 percent but at least
75 percent, of their projected activities to receive a partial, pro-
rated award.
III. Bank Enterprise Award Program
Under the Bank Enterprise Award Program (12 CFR Part 1806), the
Department will provide awards to selected Applicants that successfully
carry out certain community development activities. The following
summarizes the amendments to the interim regulations.
Definitions
The term ``Equity Investment'' is amended in Section 1806.103(q) to
give Applicants greater flexibility as to the type of instruments that
will be considered Equity Investments. An Equity Investment shall be
considered new financial assistance provided by an Applicant or its
Subsidiary to a CDFI in the form of a stock purchase, a grant
(excluding grants used to support operating costs), a purchase of any
type of partnership interest, a loan made on such terms that it has
characteristics of equity (and is considered as such by the Fund and is
consistent with requirements of the Applicant's Appropriate Federal
Banking Agency), or any other investment deemed to be an equity
investment by the Fund.
[[Page 59828]]
Measuring Activities
Section 1806.202(a) is revised to give an Applicant the option of
reporting their activities in all categories of Qualified Activities or
providing an explanation satisfactory to the Fund for not reporting in
all categories and providing any certifications reasonably deemed
necessary by the Fund, including, without limitation, a certification
that during the Assessment Period the Applicant did not reduce its
total activity in any unreported categories. The form and content of
any certification shall be determined by the Fund.
Actual Award Amounts
Section 1806.205 is revised to permit any Applicant that achieves
less than 90 percent, as opposed to less than 90 percent but at least
75 percent, of its projected Qualified Activities to receive a partial
award based upon (among other things) the Applicant's satisfactory
explanation for its failure to substantially achieve the activities
projected in its application. Any estimated award amount will be
adjusted on a pro-rata basis to reflect the activities actually
performed.
List of Subjects in 12 CFR Part 1806
Banks, banking, Community development, Economic development, Grant
programs--community development, Housing, Savings associations, Small
businesses.
For the reasons set forth in the preamble, Part 1806 of Chapter
XVIII of Title 12 of the Code of Federal Regulations is amended as
follows:
PART 1806--BANK ENTERPRISE AWARD PROGRAM
1. The authority citation for Part 1806 continues to read as
follows:
Authority: 12 U.S.C. 4703, 4717; chapter X, Pub. L. 104-19, 109
Stat. 237 (12 U.S.C. 4703 note).
2. Section 1806.103 (q) is revised to read as follows:
Sec. 1806.103 Definitions.
* * * * *
(q) Equity Investment means new financial assistance provided by an
Applicant or its Subsidiary to a CDFI in the form of a stock purchase,
a grant (excluding grants used to support operating costs), a purchase
of any type of partnership interest, a loan made on such terms that it
has characteristics of equity (and is considered as such by the Fund
and is consistent with requirements of the Applicant's Appropriate
Federal Banking Agency), or any other investment deemed to be an equity
investment by the Fund.
* * * * *
3. Section 1806.202(a) is revised to read as follows:
Sec. 1806.202. Measuring activities.
(a) General. Qualified Activities shall be measured by comparing
the Qualified Activities carried out during the Baseline Period with
the Qualified Activities projected to be carried out during the
Assessment Period. Increases in the values of Qualified Activities
between the Baseline Period and Assessment Period will be used in
determining award amounts. Applicants shall report their activities in
all categories of Qualified Activities in which they engage for the
Baseline Period and Assessment Period or provide an explanation
satisfactory to the Fund for not reporting in all categories and
provide any certification reasonably deemed necessary by the Fund,
including, without limitation, a certification that during the
Assessment Period the Applicant did not reduce its total activity in
any unreported categories. The form and content of any certification
shall be determined by the Fund. The dates of the Baseline Period and
Assessment Period will be published in the NOFA for each funding round.
* * * * *
4. Section 1806.205(c)(1) is revised to read as follows:
Sec. 1806.205 Actual award amounts.
* * * * *
(c) Partial achievement--(1) General. If an Awardee carries out
less than 90 percent of its projected Qualified Activities, it may be
deemed to have partially achieved those activities. In such cases, the
Fund may, in its sole discretion, provide a partial award based upon
(among other things) the Awardee's satisfactory explanation for its
failure to substantially achieve the activities projected in its
application. Any estimated award amount will be adjusted on a pro-rata
basis to reflect the activities actually performed.
* * * * *
Dated: November 18, 1996.
Kirsten S. Moy,
Director, Community Development Financial Institutions Fund.
[FR Doc. 96-29993 Filed 11-22-96; 8:45 am]
BILLING CODE 4810-70-P
