[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]]

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Part V





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 Bank 
Enterprise Award Program; Notice

  Federal Register / Vol. 64, No. 169 / Wednesday, September 1, 1999 / 
Notices  

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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.

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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

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$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

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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