[Federal Register Volume 64, Number 19 (Friday, January 29, 1999)]
[Notices]
[Pages 4754-4757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2024]



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Part II





Department of the Treasury





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Community Development Financial Institutions Fund



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Notice of Funds Availability (NOFA) Inviting Applications for the 
Community Development Financial Institutions Program--Technical 
Assistance Component; Notice

  Federal Register / Vol. 64, No. 19 / Friday, January 29, 1999 / 
Notices  

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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund
[No. 982-0154]


Notice of Funds Availability (NOFA) Inviting Applications for the 
Community Development Financial Institutions Program--Technical 
Assistance Component

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.) (the ``Act'') authorizes the 
Community Development Financial Institutions Fund (the ``Fund'') to 
select and provide assistance to eligible applicants under the 
Community Development Financial Institutions (``CDFI'') Program. Such 
assistance may include financial assistance and technical assistance. 
Technical assistance (``TA'') may be used for activities that enhance 
the capacity of both CDFIs and entities proposing to become CDFIs, such 
as the training of management and other personnel, the use of 
consulting services for the development of programs, loan or investment 
products, improving financial management and internal operations, 
enhancing a CDFI's community impact, the acquisition of technology to 
increase operating efficiencies and other activities deemed appropriate 
by the Fund.
    Since the advent of the CDFI Program, the Fund has issued NOFAs 
inviting applications for both TA and financial assistance. This NOFA 
is for a TA only component (``TA Component'') of the CDFI Program to 
enable the Fund to address more effectively the unmet capacity needs of 
CDFIs and entities proposing to become CDFIs. This NOFA is intended to 
award grants to eligible applicants with capacity needs and potential 
for increasing their community development impact if such capacity 
needs are addressed. This NOFA provides guidance on the contents of the 
necessary application materials and program requirements. Subject to 
funding availability, the Fund intends to award up to $5 million in 
appropriated funds under this NOFA. The Fund reserves the right to 
award in excess of $5 million in appropriated funds under this NOFA 
provided that the funds are available and the Fund deems it 
appropriate. It is anticipated that 80 to 100 awards will be made under 
this NOFA. The anticipated maximum award amount per applicant is 
$50,000. However, the Fund in its sole discretion, reserves the right 
to award amounts in excess of $50,000 if an applicant demonstrates, to 
the satisfaction of the Fund, the need for such additional amounts and 
the added potential community development impact resulting from such 
additional amounts.

DATES: The original and three copies of the application may be 
submitted at any time following January 29, 1999. The deadline for 
receipt of the original and three copies of the application for TA 
Component funds is 6 p.m. EST on April 27, 1999. Applications received 
in the Fund's office after that date and time will be rejected and 
returned to the sender.

ADDRESSES: Applications must be sent to: Awards Manager, Community 
Development Financial Institutions Fund, U.S. Department of the 
Treasury, 601 13th St., NW., Suite 200 South, Washington, DC 20005. 
Applications sent electronically or by facsimile will not be accepted.

FOR FURTHER INFORMATION CONTACT: If you have any questions about the 
programmatic requirements of the TA Component contact the Technical 
Assistance Program Manager. If you wish to request an application 
package or have questions regarding application procedures, contact the 
Awards Manager. They can be reached by phone at (202) 622-8662, by 
facsimile at (202) 622-7754 or by mail at CDFI Fund, U.S. Department of 
the Treasury, 601 13th St., NW., Suite 200 South, Washington, DC 20005. 
(The phone and facsimile numbers are not toll free.) Allow at least one 
to two weeks for the receipt of the application package. Applications 
and other information regarding the Fund and its programs may be 
downloaded from the Fund's website at http://www.treas.gov/cdfi.

SUPPLEMENTARY INFORMATION:

I. Background

    Credit and investment capital are essential ingredients for 
creating and retaining jobs, developing affordable housing, starting or 
expanding businesses, revitalizing neighborhoods, and empowering 
people. As a key urban and rural policy initiative, the CDFI Program is 
fostering the creation of a national network of financial institutions 
that are specifically dedicated to community development. CDFIs make 
loans, investments and provide development services to economically 
distressed investment areas and disadvantaged targeted populations. In 
order to facilitate the development of a national network of CDFIs, the 
Fund is seeking to support the efforts of such entities to build their 
organizational capacity to make loans and investments and provide 
development services. In order to use the TA funds strategically, it is 
the Fund's intention to target such funds to CDFIs and entities 
proposing to become CDFIs that have demonstrated capacity needs and 
possess significant potential for increasing their community 
development impact with the assistance of a limited amount of TA. The 
anticipated maximum award per applicant under this NOFA is $50,000. 
However, the Fund, in its sole discretion, reserves the right to award 
amounts in excess of $50,000 if an applicant demonstrates, to the 
satisfaction of the Fund, the need for such additional amounts and the 
added potential community development impact resulting from such 
additional amounts.
    On October 26, 1998, the Fund published in the Federal Register a 
NOFA for financial assistance under the CDFI Program Intermediary 
Component and a NOFA for financial assistance and TA under the CDFI 
Program Core Component. Under the Intermediary Component NOFA, the Fund 
is making available up to $7.5 million in appropriated funds to CDFIs 
that provide financing primarily to other CDFIs or to support the 
formation of CDFIs. Under the Core Component NOFA, the Fund is making 
available up to $50 million in appropriated funds to CDFIs that serve 
their target markets directly. Applicants under that Core Component 
NOFA may apply for both financial assistance and TA. All applications 
for financial assistance, TA or both under the Core Component will be 
evaluated separately and apart from the applications under this TA 
Component. Moreover, the application requirements and the selection 
criteria under the Core Component NOFA differ from those contained in 
this TA Component NOFA, because the TA Component NOFA is singularly 
focused on providing TA to enhance the capacity of CDFIs and entities 
proposing to become CDFIs. Interested applicants are encouraged to 
apply for TA under one NOFA or the other; however, applicants are not 
prohibited from applying for TA under both NOFAs.

II. Eligibility

    The Act and the interim rule governing the CDFI Program (12 CFR 
part 1805), which was published in the Federal Register on April 4, 
1997 (62 FR 16444), specify the requirements that

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each applicant must meet to be eligible to apply for TA. At the time an 
entity submits its application, the entity must meet or propose to meet 
the CDFI certification requirements under Sec. 1805.200. In general, a 
CDFI must have a primary mission of promoting community development, 
provide loans or development investments, serve an investment area or a 
targeted population, provide development services, maintain community 
accountability, and be a nongovernment entity. At the time an entity 
submits its application, the entity must be duly organized and validly 
existing under the laws of the jurisdiction in which it is incorporated 
or otherwise established. The details regarding these requirements and 
other program requirements are described in the interim rule and the 
application packet.

III. Form of Assistance

    An applicant under this NOFA may only submit an application for a 
TA grant.

IV. Application Packet

    Section 1805.701 of the interim rule provides that unless otherwise 
specified in an applicable NOFA, each application must contain the 
information specified in the application packet, including the items 
described in Secs. 1805.701(a)-(j). For purposes of this NOFA, the Fund 
is specially tailoring the collection of information requirements. 
Specifically, applicants need only submit the information required by 
the TA Component application packet. The TA Component application 
packet requires the submission of the following information:
    (a) Applicant Information. The applicant's name, address and name 
and telephone number of the applicant's authorized representative and 
contact person.
    (b) Award Request. The dollar amount of the TA grant requested by 
the applicant.
    (c) Eligibility Verification. If the Fund has not certified an 
applicant as a CDFI and an applicant does not have an application for 
certification pending with the Fund, the applicant must provide 
information necessary to establish that it is, or will be, a CDFI. An 
applicant must demonstrate whether it meets the CDFI eligibility 
requirements by providing the information described in 
Secs. 1805.701(b)(1)-(8). If an applicant is currently certified by the 
Fund as a CDFI, it may submit a copy of the Fund's letter of 
certification and the Certification of Material Changes form contained 
within the application in lieu of the information described in 
Secs. 1805.701(b)(1)-(8). However, an applicant may include in its 
application for a TA grant information that it believes is otherwise 
relevant to the Fund's evaluation of the application under the criteria 
set forth in this NOFA. An entity that proposes to become a CDFI is 
eligible to apply for a TA grant if the Fund determines that such 
entity's application materials provide a realistic course of action to 
ensure that it will meet the requirements described in 
Secs. 1805.200(b)-(h) within two years of entering into an Assistance 
Agreement with the Fund.
    (d) Comprehensive Business Plan. An applicant must submit a five-
year Comprehensive Business Plan that addresses the items described in 
this paragraph (d) (the TA Component Comprehensive Business Plan is an 
abbreviated version of what is required under the Core Component NOFA). 
The Comprehensive Business Plan should, to the maximum extent 
practical, be limited to ten pages or less (applicants may provide 
attachments, including supplemental documents, as appropriate, on items 
referenced in the Comprehensive Business Plan).
    (1) Management capacity. An applicant must provide a narrative 
description of its current management capacity, including detailed 
information on the background and capacity of the applicant's 
management team, key personnel and governing board members as 
appropriate.
    (2) Track Record and Historical Financial Performance. An applicant 
must provide information on its historical and current financial 
condition, including a copy of audited financial statements, financial 
statements that have been reviewed by a certified public accountant, or 
financial statements that have been reviewed by the applicant's 
Appropriate Federal Banking Agency (its Federal regulator) for the last 
three completed fiscal years, and the most recent internal financial 
statements since the beginning of the applicant's current fiscal year. 
The applicant must also provide information on its loans and 
Development Investments for the three most recent fiscal years, 
including information on the total number and dollar amount of such 
loans and Development Investments during each fiscal year during this 
time frame. If an applicant has been in operation for less than three 
years, the applicant must describe such activities for each fiscal year 
since inception. The applicant must provide information necessary to 
assess trends in its financial and operating performance (such as, 
portfolio delinquencies, defaults and charge-offs).
    (3) Market Analysis and Strategy. An applicant must provide an 
analysis of its target markets, including a description of the needs of 
the Investment Area(s) and Targeted Population(s), as applicable. An 
applicant must also describe its five-year strategy for meeting the 
demand for loans or Development Investments generated by the needs of 
its target market(s) through its products and services. The strategy 
description may include plans for growth of lending volume and lending 
products, expansion of Development Services, staffing and management 
appropriate to meet such growth and growth of the operating budget. 
Projected changes in overall capital structure (asset and liability 
composition) may also be described. The narrative discussion may be 
supplemented with quantitative projections.
    (4) Coordination Strategy. An applicant must describe:
    (i) Its plan to coordinate use of assistance from the Fund with 
existing Federal, State, local, and tribal government assistance 
programs and private sector resources;
    (ii) How its proposed activities are consistent with existing 
economic, community, and housing development plans adopted for an 
Investment Area(s) or Targeted Population(s); and
    (iii) How it will coordinate with community organizations, 
financial institutions, and Community Partners (if applicable) that 
will provide loans, equity investments, secondary markets, or other 
services to an Investment Area(s) or a Targeted Population(s).
    (5) Funding Sources. An applicant must provide information:
    (i) On its current and projected sources of capital and other 
financial support. Such projections must relate to and be consistent 
with the strategy description provided under paragraph (3); and
    (ii) To demonstrate that it has a plan for achieving or maintaining 
financial viability within the five-year period. Such information must 
demonstrate that the applicant will not be dependent on future awards 
of assistance from the Fund for its continued viability.
    (6) Community Partnership. In the case of an applicant submitting 
an application with a Community Partner, the applicant must include in 
its application the information described in Sec. 1805.701(d)(12).
    (e) Technical Assistance Proposal. An applicant must provide a 
Technical

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Assistance Proposal (``TAP'') that includes information on the TA 
needed to enhance the capacity of the organization to carry out its 
Comprehensive Business Plan. Such information must include the items 
described in this paragraph (e). The TAP should, to the maximum extent 
practicable, be limited to ten pages or less (applicants may provide 
attachments, including supplemental documents, as appropriate, on items 
referenced in the TAP). An applicant must provide:
    (1) An evaluation of its capacity needs (this may be a self-
evaluation);
    (2) A detailed description of the type(s) of TA needed to meet the 
identified capacity needs. Eligible types of TA may include, but need 
not be limited to, the following: (i) consulting services; (ii) 
technology items; and (iii) training for staff or management. The Fund 
will not consider requests under this NOFA for expenses that, in the 
interpretation of the Fund, are deemed to be ongoing operating expenses 
rather than non-recurring expenses (for example, the cost of design of 
marketing materials for a loan product through a consulting contract is 
a non-recurring expense but the cost of production or distribution of 
printed marketing materials is an ongoing expense; salary expenses for 
staff are ongoing but the cost of a consulting contract for a discrete 
scope of services is a non-recurring expense);
    (3) A detailed description of the strategy for obtaining such TA, 
including proposed providers of TA and their qualifications or the 
specific technology items to be acquired. If an applicant cannot 
identify specific providers of TA in its application, it must identify 
the requisite qualifications that it will seek for such TA providers;
    (4) An estimate of the cost to obtain the TA for each year that 
will include use of TA funds. This cost estimate must include expense 
projections for each of the specific activities to be funded with TA 
funds; and
    (5) A projection of the benefits expected to be created within its 
Investment Area(s) or for its Targeted Population(s) with the enhanced 
capacity resulting from the TA.
    (f) Conflict of Interest. An applicant must submit a copy of its 
conflict of interest policies, consistent with the requirements of 
Sec. 1805.906.
    (g) Lobbying Disclosure Act of 1995. An applicant must identify 
whether the Internal Revenue Service (IRS) has recognized it as exempt 
from Federal income tax under section 501(c)(4) of the Internal Revenue 
Code.
    (h) Miscellaneous. An applicant must indicate and describe the 
circumstances underlying any back taxes due to the IRS, any delinquent 
debts owed to Federal, State or local governments, and whether it has 
ever filed for bankruptcy.
    (i) Environmental Information. An applicant must review and 
complete the Environmental Review Form contained in the application.
    (j) Applicant Certification. An applicant and Community Partner (if 
applicable) must review and complete the assurances and certifications 
form contained in Appendix A of the application.
    (k) Previous Awardees. In the case of an applicant that has 
previously received assistance under the CDFI Program, the applicant 
must demonstrate that it:
    (1) Has substantially met its performance goals and other 
requirements described in its previous Assistance Agreement(s); and
    (2) Will expand its operations into a new Investment Area(s), serve 
a new Targeted Population(s), offer more products or services, or 
increase the volume of its activities.
    (l) Previous History. In the case of an applicant with a prior 
history of serving Investment Area(s) or Targeted Population(s), the 
applicant must demonstrate that it:
    (1) Has a record of success in serving Investment Area(s) or 
Targeted Population(s); and
    (2) Will expand its operations into a new Investment Area(s), serve 
a new Targeted Population(s), offer more products or services, or 
increase the volume of its activities.

V. Evaluation and Selection

    In evaluating and selecting applicants, the Fund will use the 
evaluation criteria found in Sec. 1805.802(b), except that the Fund 
will not consider the evaluation criteria relating to matching funds in 
Secs. 1805.802(b)(2)(i), (ii) and (iv). Under the Act, the Fund has 
express authority to consider evaluation criteria in addition to those 
set forth in 12 U.S.C. 4706 and 1805.802(b). The Fund also has broad 
discretion in evaluating the relative importance of each such 
criterion. For purposes of this TA Component NOFA, the Fund has added 
as an additional evaluation criterion the extent of the applicant's 
demonstrated capacity needs.
    In conducting its substantive review of applications, the Fund will 
initially evaluate applications using a 100 point maximum point scale. 
In selecting applicants for TA grant awards, the Fund will accord 
predominant weight to the following two evaluation criteria:
    (a) The extent of the applicant's demonstrated capacity needs, 30 
points; and
    (b) The extent and nature of the potential community development 
impact that will be achieved by the applicant with the assistance of 
the Fund's TA, relative to the amount of TA to be provided by the Fund, 
30 points.
    The Fund will continue to evaluate applications using the remaining 
applicable criteria set forth in Sec. 1805.802(b) described below; 
however, such evaluation criteria will receive less weight than the two 
criteria set forth above:
    (a) The capacity, skills and experience of the applicant's 
management team and other key personnel (overall organizational 
structure, lending/investing activities, community development 
involvement), 14 points for established applicants and 24 points for 
start-ups;
    (b) The applicant's track record, financial strength and current 
operations (including its general financial operations and lending/
investment operations), 10 points for established applicants and no 
points for start-ups;
    (c) The market analysis, strategy and (if applicable) Community 
Partnerships, 12 points;
    (d) Coordination strategy, 2 points; and
    (e) Funding sources, 2 points.
    As shown above, the Fund will utilize two different 100 point 
scales for the application evaluation, depending on whether an 
applicant is deemed by the Fund to be a start-up organization or an 
established organization. The Fund defines a start-up organization as 
an entity that has been in operation for less than two years. The Fund 
will find an organization to be a start-up if it began incurring 
operating expenses after January 29, 1997, based on a review of 
submitted income and expense statements and/or other information by an 
applicant as part of its application. In evaluating applications of 
start-up organizations, the Fund will place greater emphasis on the 
experience, strength and background of an applicant's management team 
and key personnel than on the breadth and depth of its financial 
resources and its trends in operating performance.
    Once the initial evaluation is completed, the Fund will determine 
which applications will receive further consideration for funding based 
on the application scores (standardized if deemed appropriate), the 
recommendations of the individuals performing the initial reviews and 
the amount of funds available. Applicants

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selected for further review or a second stage evaluation may be 
contacted for purposes of obtaining clarifying or confirming 
information. A final review panel will consider the results of the 
initial and second stage evaluations and the geographic and 
institutional diversity of those applicants being considered for 
funding in accordance with 12 CFR 1805.801 and 1805.802(b)(5). The 
final review panel will make recommendations to the Fund's selecting 
official.
    In assessing the extent of demonstrated capacity need, the Fund 
will consider the extent of funding previously awarded by the Fund to 
the applicant. While previous awardees are eligible to apply under this 
NOFA, given the focus on applicants with demonstrated unmet capacity 
building needs, it is the expectation of the Fund that a substantial 
majority of the funds awarded under this NOFA will be to applicants 
that are not previous awardees. On the other hand, success in a 
previous funding round will not prevent an applicant from receiving a 
TA grant under this NOFA provided that it is consistent with the Act 
and the interim rule governing the CDFI Program (12 CFR part 1805).
    The Fund has exclusive discretion in the selection of applications 
for assistance. The anticipated maximum award per applicant under this 
NOFA is $50,000. However, the Fund, in its sole discretion, reserves 
the right to award amounts in excess of $50,000 if it deems it 
appropriate.

VI. Workshops

    The Fund expects to host workshops during the period from March 1 
to March 19, 1999, to disseminate information to organizations 
interested in applying for assistance under this NOFA. If you wish to 
be on the mailing list to receive information about such workshops, 
please fax your request to the Fund. Information about these workshops 
will also be available on the Fund's website at http://www.treas.gov/
cdfi.

    Authority: 12 U.S.C. 4703, 4703 note, 4704, 4706, 4707, 4717, 
4718; 12 CFR part 1805.

    Dated: January 22, 1999.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development 
Financial Institutions Fund.
[FR Doc. 99-2024 Filed 1-28-99; 8:45 am]
BILLING CODE 4810-70-P