[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]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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