[Federal Register Volume 64, Number 169 (Wednesday, September 1, 1999)]
[Notices]
[Pages 48062-48065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22659]
[[Page 48061]]
_______________________________________________________________________
Part V
Department of the Treasury
_______________________________________________________________________
Community Development Financial Institutions Fund
_______________________________________________________________________
Notice of Funds Availability (NOFA) Inviting Applications for the Bank
Enterprise Award Program; Notice
Federal Register / Vol. 64, No. 169 / Wednesday, September 1, 1999 /
Notices
[[Page 48062]]
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Funds Availability (NOFA) Inviting Applications for the
Bank Enterprise Award Program
AGENCY: Community Development Financial Institutions Fund, Department
of the Treasury.
ACTION: Notice of Funds Availability (NOFA) inviting applications.
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SUMMARY: The Community Development Banking and Financial Institutions
Act of 1994 (12 U.S.C. 4701 et seq.) authorizes the Community
Development Financial Institutions Fund (hereafter referred to as ``the
Fund'') to provide incentives to insured depository institutions for
the purposes of promoting investments in or other support to Community
Development Financial Institutions (``CDFIs'') and facilitating
increased lending and provision of financial and other services in
economically distressed communities. Insured depository institutions
and CDFIs are defined terms in 12 CFR part 1806, which governs the Bank
Enterprise Award (``BEA'') Program. The Fund intends to award funds
under this NOFA up to the maximum amount authorized by law. As of the
date of this NOFA, the Fund intends to make available up to $25 million
in BEA Program funds, subject to the availability of appropriated
funds. The Fund may award in excess of $25 million if it deems it
appropriate, subject to the availability of appropriated funds.
In connection with this NOFA, the Fund is conducting information
sessions to disseminate information to organizations contemplating
applying to, and other organizations interested in learning about, the
BEA Program. The schedule for the information sessions is as follows:
Monday, September 13, 1999 (New York, New York);
Thursday, September 16, 1999 (Boston, Massachusetts);
Friday, September 17, 1999 (Miami, Florida and Minneapolis, Minnesota);
Tuesday, September 21, 1999 (New Orleans, Louisiana);
Wednesday, September 22, 1999 (Billings, Montana and Kansas City,
Missouri);
Thursday, September 23, 1999 (San Antonio, Texas);
Friday, September 24, 1999 (Chicago, Illinois; San Diego, California,
and Seattle, Washington);
Monday, September 27, 1999 (Albuquerque, New Mexico; Pittsburgh,
Pennsylvania; San Francisco, California); and
Tuesday, September 28, 1999 (Denver, Colorado and Nashville,
Tennessee).
For more information, or to register for an information session,
call the Fund at (202) 622-8662.
DATES: Applications may be submitted at any time after September 1,
1999. The deadline for receipt of an application is 6 p.m. Eastern
Standard Time on Tuesday, November 23, 1999. Applications received in
the offices of the Fund after that date and time will not be accepted
and will be returned to the sender. Any entity seeking certification as
a CDFI (as described in 12 CFR 1805.200) for the purposes of 12 CFR
part 1806 is strongly encouraged to submit the Application Form for
Certification, the contents of which are described in 12 CFR
1805.701(b)(1) through (8), by Tuesday, November 23, 1999. If an entity
fails to submit such application by this deadline, the Fund cannot
guarantee that it will have sufficient time to complete a certification
review for the purposes of the current funding round of the BEA
Program. In addition, with respect to all requests for certification,
the Fund reserves the right to request clarifying or technical
information after reviewing materials submitted as described in 12 CFR
1805.701(b)(1) through (8). If the entity seeking certification does
not respond to such requests in a timely manner, the Fund cannot
guarantee that it will have sufficient time to complete a certification
review for the purposes of the current funding round of the BEA
Program.
ADDRESSES: Applications shall be sent to: Awards Manager, Community
Development Financial Institutions Fund, U.S. Department of the
Treasury, 601 13th Street, NW., Suite 200 South, Washington, DC 20005.
Applications sent by fax or electronic transfer will not be accepted.
FOR FURTHER INFORMATION CONTACT: All questions regarding this NOFA, the
application package, or BEA Program requirements should be directed to
the Community Development Financial Institutions Fund, U.S. Department
of the Treasury, 601 13th Street, NW., Washington, DC 20005, by
telephone at (202) 622-8662 or by facsimile at (202) 622-7754. These
are not toll free numbers. If you are requesting an application
package, you must allow at least two weeks for delivery. Information
on, and application materials for, the Fund's programs may also be
obtained through its Website at www.treas.gov/cdfi.
SUPPLEMENTARY INFORMATION:
I. Background
As part of a national strategy to facilitate revitalization and
increase the availability of credit and investment capital in
distressed communities, the Community Development Banking and Financial
Institutions Act of 1994 (``Act'') authorizes a portion of funds
appropriated to the Fund to be made available for distribution through
the BEA Program. The BEA Program is largely based on the Bank
Enterprise Act of 1991, although Congress significantly amended the
program to facilitate greater coordination with other activities of the
Fund. The BEA Program and the Community Development Financial
Institutions Program (12 CFR part 1805) are intended to be
complementary initiatives that support a wide range of community
development activities and facilitate partnerships between traditional
lenders and CDFIs. This NOFA invites applications from insured
depository institutions for the purpose of promoting community
development activities and revitalization.
II. Eligibility
The Act specifies that eligible Applicants must be insured
depository institutions as defined in 12 U.S.C. 1813(c)(2).
III. Designation of Distressed Community
In accordance with 12 CFR 1806.200(d), in the case of Applicants
carrying out Qualified Activities requiring the designation of a
Distressed Community (as defined in 12 CFR 1806.103(r)), the Fund will
provide Applicants with data and other information to help identify
areas eligible to be designated as Distressed Communities.
Specifically, the Fund will provide such information through its CDFI
Fund Help Desk Website, a new service that will be available as of
September 1, 1999. The Fund requires all Applicants to utilize the Help
Desk to produce the Distressed Community worksheets and corresponding
maps.
The Help Desk is found at www.cdfifundhelp.gov or through a link at
the Fund's main Website at www.treas.gov/cdfi. The Help Desk will
provide easy step-by-step instructions on how to designate a Distressed
Community. The Help Desk will allow an Applicant to instantly create
and print a Distressed Community designation worksheet(s) and
corresponding map(s). The Help Desk also lists a customer service
telephone number that Applicants may call to ask questions.
[[Page 48063]]
IV. Designation Factors
Regulations codified at 12 CFR part 1806 describe the process for
selecting Applicants to receive assistance and for determining award
amounts. The rating and selection process will give priority to
Applicants in the following order: (1) Equity Investments in CDFIs
serving Distressed Communities; (2) Equity Investments in CDFIs not
serving Distressed Communities; (3) CDFI Support Activities; and (4)
Development and Service Activities (as such activities are defined in
12 CFR 1806.103). Assistance amounts will be calculated based on
increases in Qualified Activities that occur during a 6-month
Assessment Period in excess of activities that occurred during a 6-
month Baseline Period. In general, estimated award amounts for
applicants making Equity Investments in CDFIs will be equal to 15
percent of the projected increase in such activities. An Applicant may
choose to accept less than the maximum amount of assistance in order to
increase the ranking of its application. Estimated award amounts for
CDFI Applicants for carrying out CDFI Support Activities will be equal
to 33 percent of the projected increase in such activities. Estimated
award amounts for non-CDFI Applicants for carrying out CDFI Support
Activities will be equal to 11 percent of the projected increase in
such activities.
The Regulations at 12 CFR part 1806 also establish the ranking and
selection process. For an Applicant pursuing Development and Service
Activities, a multi-step procedure is outlined in the interim rule that
will be used to calculate the estimated award amount. In general, if an
Applicant is a CDFI, such estimated award amount will be equal to 15
percent of the total score calculated in the multi-step procedure. If
an Applicant is not a CDFI, such estimated award amount will be equal
to 5 percent of the total score calculated in the multi-step procedure.
In ranking and funding such Applicants within each category, the Fund
will apply criteria contained in the interim rule. The Fund, in its
sole discretion: (1) may adjust the estimated award amount that an
Applicant may receive prior to the end of the Assessment Period; (2)
may establish a maximum amount that may be awarded to an Applicant; and
(3) reserves the right to limit the amount of an award to any Awardee
if the Fund deems it appropriate.
V. Baseline Period and Assessment Period Dates
As part of its application, an Applicant shall report the Qualified
Activities that it actually carried out during the 6-month Baseline
beginning January 1, 1999 and ending June 30, 1999. An applicant shall
also project the Qualified Activities that it expects to carry out
during the 6-month Assessment Period beginning January 1, 2000 and
ending June 30, 2000. Applicants selected to participate in the BEA
Program during the Assessment Period will be required to submit to the
Fund a Final Report (Part II of the Application) of Qualified
Activities actually carried out during the Assessment Period. The
deadline for receipt of the Final Report is 6 p.m. Eastern Daylight
Time on Tuesday, August 1, 2000. Final Reports received in the offices
of the Fund after that date and time will not be accepted and will be
returned to the sender. The Fund will evaluate the performance of
Applicants in carrying out projected activities to determine actual
award amounts. The Fund may request clarifying or technical information
after receiving an Applicant's Final Report.
VI. Targeted Financial Services
The lack of availability of Financial Services (as defined in the
BEA Program Regulations at 12 CFR 1806.103(u)) tailored to the needs of
Low-and Moderate-Income people is a significant challenge in many
urban, rural and Native American communities. In an effort to encourage
insured depository institutions to provide two specific types of
targeted Financial Services, Electronic Transfer Accounts (``ETAs'')
and Individual Development Accounts (``IDAs''), the Fund is providing
the following guidance to BEA Program Applicants.
A. Electronic Transfer Accounts
On September 25, 1998, the U.S. Department of the Treasury
(``Treasury'') published a final rule in the Federal Register, 31 CFR
part 208 (the ``EFT Rule''), implementing the mandatory electronic
funds transfer (``EFT'') requirements of the Debt Collection
Improvement Act of 1996. The Debt Collection Improvement Act of 1996
requires Treasury to ensure that individuals required to have an
account at a financial institution due to the EFT Rule have access to
an account at a reasonable cost and with certain consumer protections.
The EFT Rule provides that any individual who receives a Federal
benefit, wage, salary, or retirement payment shall be eligible to open
an electronic transfer account (``ETA'') at any Federally insured
financial institution offering ETAs. Treasury subsequently published
the ETA Notice (``ETA Notice'') in the Federal Register on July 16,
1999, setting forth the attributes for ETAs.
For purposes of this NOFA, the term ETA and all terms related to
Treasury's EFT initiative that are not defined in the BEA Program
Regulations shall have the same meanings as defined in the EFT Rule and
the ETA Notice. Only insured depository institutions that have entered
into, and are in compliance with, the Financial Agency Agreement
published as an appendix to the ETA Notice may receive an award under
the BEA Program for providing ETAs. An Applicant's ETA product must
meet all of the requirements set forth in the ETA Notice, and any
subsequent guidance issued by Treasury, and be in compliance with the
terms and conditions of its Financial Agency Agreement with Treasury.
Furthermore, an Applicant's ETA product must be held by individuals who
are Low-or Moderate-Income Residents of Distressed Communities, as
required by 12 CFR 1806.103(u). Thus, Applicants must collect data on:
(1) the geographic unit in which an ETA holder resides as evidence that
he or she is a Resident of a designated Distressed Community; and (2)
the annual income of said ETA holder as evidence that his or her income
meets Low-or Moderate-Income criteria.
As provided in the BEA Program Regulations at 12 CFR
1806.202(c)(3), all Financial Service activities must be valued ``based
on the administrative costs of providing such services.'' For purposes
of this NOFA, the Fund will value the administrative cost of providing
an ETA at $50.00 per account. Thus, an Applicant seeking a BEA grant
for ETA activities does not need to submit documentation of
administrative expenses incurred in delivering its product. (However,
at a later date, the Fund may distribute a survey questionnaire to
Awardees for the purpose of obtaining information regarding the
administrative costs incurred in the provision of ETAs.) Instead, the
Applicant must indicate the number of ETAs held by Low- and Moderate-
Income Residents of designated Distressed Communities, which shall be
multiplied by $50.00 to yield the respective Baseline Period and
Assessment Period levels of ETA activity. For purposes of this NOFA,
and in keeping with 12 CFR 1806.201(b)(3)-(4) of the BEA Program
Regulations, the Fund will assign a priority factor of 2.0 for
establishment of ETAs held by Low-and Moderate-Income Residents of
Distressed Communities.
The Fund is aware that Treasury will provide insured depository
institutions that offer ETAs compensation equal to
[[Page 48064]]
$12.60 per ETA to offset the variable set-up costs of opening an ETA.
However, the BEA award amount provided in this NOFA is intended to
assist insured depository institutions to cover other costs associated
with offering ETAs.
If an Applicant seeks a BEA grant for providing financial literacy
classes, related training or one-on-one technical assistance to ETA
holders, the Applicant must submit documentation of the costs of
providing such services and report such activities as Community Service
activities, as described in 12 CFR 1806.103(p).
B. Individual Development Accounts
On January 27, 1999 and July 2, 1999, the Office of Community
Services of the Administration for Children and Families of the U.S.
Department of Health and Human Services (``HHS'') published Program
Announcements in the Federal Register (OCS-99-04 and OCS-99-08,
respectively) to implement the Assets for Independence Demonstration
Program (``IDA Program'') authorized pursuant to the Assets for
Independence Act, 42 U.S.C. 604. Together, the Program Announcements
state that HHS intends to provide up to $9.3 million in FY 1999
appropriated funds over five years to organizations selected to
participate as Project Grantees in the IDA Program. The IDA Program is
intended, among other things, to determine the extent to which
Individual Development Accounts (``IDAs'') may be used to enable
individuals and families with limited means to increase their economic
self-sufficiency. This NOFA provides guidance to BEA Program Applicants
on how IDAs can be used to serve Residents of Distressed Communities
under the BEA Program.
In brief, IDAs are savings accounts for income-eligible individuals
that are specifically restricted for use in activities associated with
purchasing a home, obtaining post-secondary education, or capitalizing
a business. IDA programs: (1) Are generally targeted to lower income
individuals; (2) create savings incentives through the provision of
matching funds from third parties; (3) may combine matching fund
incentives with financial literacy education and other training or
technical assistance; and (4) may be provided by non-profit
organizations collaborating with financial institutions (which includes
Insured Depository Institutions, as defined under the BEA Program) that
may be acting as Trustees, Custodians or in some other capacity.
Interested parties are instructed to refer to the HHS Program
Announcements for further IDA Program information. Such information may
be found at www.acf.dhhs.gov/programs/ocs/99ASSETS.HTM or through a
link at the Fund's main Website at www.treas.gov/cdfi.
While an Applicant is not required to be a participant in the IDA
Program to receive a BEA grant for its IDA activities, IDAs must meet
the requirements set forth in Part IV (Section G(3) and (4)) of Program
Announcement OCS-99-08.
For purposes of this NOFA, the term IDA and all terms related to
the IDA Program not defined in the BEA Program Regulations shall have
the same meanings as defined in the July 2, 1999 HHS Program
Announcement, OCS-99-08.
For purposes of this NOFA, the Fund will presume that IDAs
established for Project Participants by financial institutions, as
discussed in OCS-99-08, Part IV (G)(2), benefit Low- and Moderate-
Income individuals based on the requirements for Eligible Individuals
described under Program Announcement OCS-99-08, Part IV G(2)(a), which
states that ``[e]ligibility for participation in the demonstration
projects is limited to individuals who are members of households
eligible for assistance under TANF [Temporary Assistance for Needy
Families] or of households whose adjusted gross income does not exceed
the earned income amount described in Section 32 of the Internal
Revenue Code of 1986 (taking into account the size of the household),
and whose net worth as of the end of the calendar preceding the
determination of eligibility does not exceed $10,000, excluding the
primary dwelling unit and one motor vehicle owned by a member of the
household.'' However, such Applicants must collect data on the
geographic unit in which an IDA holder resides to verify that he or she
is a Resident of a Distressed Community, as required by 12 CFR
1806.103(u).
In the case of Applicants that are not a participant in the HHS'
IDA Program, such Applicants must collect data on: (1) the geographic
unit in which an IDA holder resides to verify that he or she is a
Resident of a Distressed Community; and (2) the annual income of said
IDA holder to verify that his or her income meets Low- or Moderate-
Income criteria.
As provided in BEA Program Regulations at 12 CFR 1806.202(c)(3),
all Financial Service activities must be valued ``based on the
administrative costs of providing such services.'' In order to reduce
Applicants' paperwork and administrative burden, the Fund will value
the administrative cost of providing an IDA at $50.00 per account.
Thus, an Applicant seeking a BEA grant for IDA activities does not need
to submit documentation of administrative expenses incurred in
delivering its product (However, at a later date the Fund may
distribute a survey questionnaire to Awardees for the purpose of
obtaining information regarding the administrative costs incurred in
the provision of IDAs). Instead, the Applicant must indicate the number
of IDAs held by Low- and Moderate-Income Residents of Distressed
Communities, which numbers shall be multiplied by $50.00 to yield the
respective Baseline Period and Assessment Period levels of IDA
activities. For purposes of this NOFA, and in keeping with 12 CFR
Sec. 1806.201(b)(3)-(4) of the BEA Program Regulations, the Fund will
assign a priority factor of 2.0 for establishment of IDAs held by Low-
and Moderate-Income Residents of Distressed Communities.
If an Applicant seeks a BEA grant for providing financial literacy
classes, related training or one-on-one technical assistance to IDA
holders, the Applicant must submit documentation of the costs of
providing such services and report such activities as Community Service
activities, as described in 12 CFR 1806.103(p). If an Applicant seeks a
BEA grant for providing matching fund grants directly to IDA Program
Project Participants' accounts or to Project Grantees for the purpose
of providing matching fund grants to Project Participants' accounts,
the Fund will consider such activity an administrative cost and it must
be reported as a Community Service activity. Such an Applicant must
provide documentation that such grant monies have been disbursed to
Project Participants' accounts or a Project Grantee.
VII. Disbursement on Lines of Credit
This NOFA provides guidance to Applicants regarding the manner in
which the Fund will obligate and disburse a BEA grant to an Awardee for
a Qualified Activity that is based on a loan in the form of a line of
credit or other similar credit facility. The Fund will obligate an
award based on the face amount only of such a line of credit provided
that it meets the requirements of a closed transaction set forth in 12
CFR 1806.202(d). The Fund will disburse such obligated amounts after it
receives documentation that the Awardee has disbursed monies to the
borrower under said line of credit. The Fund will make a disbursement
of its award to the Awardee in amounts equal to the corresponding award
amount for the Awardee's disbursement to the
[[Page 48065]]
borrower, up to the face amount of the line of credit.
Catalog of Federal Domestic Assistance: 21.021.
Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713; 12 CFR part
1806.
Dated: August 26, 1999.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development
Financial Institutions Fund.
[FR Doc. 99-22659 Filed 8-31-99; 8:45 am]
BILLING CODE 4810-70-P
