[Federal Register Volume 65, Number 157 (Monday, August 14, 2000)]
[Notices]
[Pages 49660-49664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20269]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Notice of Funds Availability (NOFA) Inviting Applications for the 
Community Development Financial Institutions (CDFI) Program--
Intermediary 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. The 
interim rule (12 CFR part 1805), most recently published in the Federal 
Register on November 1, 1999 (64 FR 59076), and now revised and 
published in the Federal Register concurrently with this NOFA, provides 
guidance on the contents of application materials, evaluation criteria 
and other program requirements. More detailed application content 
requirements are found in the application packet. While the Fund 
encourages applicants to review the interim rule, all of the 
application content requirements and the evaluation criteria contained 
in the interim rule are also contained in the application packet. 
Subject to the availability of funds, the Fund currently anticipates 
making awards of up to $5 million in appropriated funds under this NOFA 
and expects to make four to ten awards. The Fund reserves the right to 
award in excess of $5 million in appropriated funds under this NOFA 
provided that funds are available and the Fund deems it appropriate. 
The Fund reserves the right to fund, in whole or in part, any, all, or 
none of the applications submitted in response to this NOFA.
    This NOFA is issued in connection with the Intermediary Component 
of the CDFI Program. The Intermediary Component provides financial 
assistance and technical assistance to CDFIs that provide financing 
primarily to other CDFIs and/or to support the formation of CDFIs. 
Elsewhere in this issue of the Federal Register, the Fund is publishing 
a separate NOFA for the sixth round of the Core Component of the CDFI 
Program, with respect to which the Fund intends to make available up to 
$50 million in appropriated funds. The Core Component provides 
assistance to CDFIs that directly serve their target markets through 
loans, investments and other activities, not including the financing of 
other CDFIs.

DATES: Applications may be submitted at any time, commencing August 14, 
2000. The deadline for receipt of an application is 6 p.m. EST on 
December 19, 2000. Applications received in the offices of the Fund 
after that date and time will be rejected and returned to the sender.

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 to the Fund electronically or by facsimile will not 
be accepted.

FOR FURTHER INFORMATION CONTACT: If you have any questions about the 
programmatic requirements for this program, contact the CDFI Program 
Manager. Should you wish to request an application package or have any 
questions regarding application procedures, contact the Awards Manager. 
The CDFI Program Manager and the Awards Manager may be reached by e-
mail at [email protected], by phone at (202) 622-8662, by 
facsimile on (202) 622-7754 or by mail at CDFI Fund, 601 13th Street, 
NW, Suite 200 South, Washington, DC 20005. These are not toll free 
numbers. Allow at least one to two weeks from the date the Fund 
receives a request for 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. Access to financial services is critical to helping bring more 
Americans into the economic mainstream. As a key urban and rural policy 
initiative, the CDFI Program funds and supports a national

[[Page 49661]]

network of financial institutions that is specifically dedicated to 
community development. This strategy builds strong institutions that 
make loans and investments and provide services to economically 
distressed investment areas and disadvantaged targeted populations. The 
Act authorizes the Fund to select entities to receive financial and 
technical assistance. This NOFA invites applications from eligible 
organizations for financial assistance, technical assistance, or both, 
for the purpose of promoting community development activities.
    The program connected with this NOFA constitutes the Intermediary 
Component of the CDFI Program, involving financial assistance to CDFIs 
that provide financing primarily to other CDFIs and/or to support the 
formation of CDFIs. Under this Intermediary Component NOFA, the Fund 
anticipates a maximum award amount of $1.5 million per applicant. 
However, the Fund, in its sole discretion, reserves the right to award 
amounts in excess of the anticipated maximum award amount if the Fund 
deems it appropriate.
    Previous awardees under the CDFI Program are eligible to apply 
under this NOFA, but such applicants must be aware that success in a 
previous round should not be considered indicative of success under 
this NOFA. In addition, organizations will not be penalized for having 
received awards in previous funding rounds, except to the extent that:
    (1) The Fund is generally prohibited from obligating more that $5 
million in assistance, in the aggregate, to any one organization and 
its subsidiaries and affiliates during any three-year period. Thus, for 
purposes of ascertaining whether an awardee under this NOFA is at or 
near the $5 million limit, the Fund will consider the amount of money 
obligated on behalf of said awardee pursuant to this NOFA and any other 
CDFI Program NOFAs published in 1998, 1999 and 2000; and (2) an 
applicant that is a previous awardee has failed to meet its performance 
goals, financial soundness covenants (if applicable) and/or other 
requirements contained in the previously executed assistance 
agreement(s).
    The Fund recognizes that there are in existence certain 
intermediary CDFIs, and that others may be created over time, that 
focus their financing activities primarily on financing other CDFIs. 
Such institutions may have knowledge and capacity to develop and 
implement a specialized niche or niches in their financing of CDFIs 
and/or emerging CDFIs. The Fund believes that providing financial 
assistance to such intermediaries can be an effective way to enhance 
its support of the CDFI industry by reaching CDFIs that the Fund itself 
cannot reach as effectively under the Core Component. In particular, 
the Fund wishes to support the activities of those intermediaries that 
provide financing, Development Services, and other support to small 
(e.g., total assets of less than $5 million) and emerging CDFIs and 
CDFIs that have not received assistance from the CDFI Fund. An emerging 
CDFI is an organization that is not yet certified as a CDFI but one 
that the Intermediary Component applicant determines in good faith has 
a reasonable chance of being certified by the Fund within three years 
from the date the emerging CDFI receives assistance from the 
Intermediary Component applicant. An intermediary CDFI may, for 
example, have a specialized niche or niches focusing on financing a 
specific type or types of CDFIs, providing small amounts of capital per 
CDFI, financing CDFIs with specialized risk levels, or financing 
institutions seeking to become CDFIs. By providing financial assistance 
to specialized intermediaries, the Fund believes it can leverage the 
expertise of such intermediaries and strengthen the Fund's capacity to 
support the development and enhancement of the CDFI industry. This NOFA 
invites applications from CDFIs, and organizations seeking to become 
CDFIs, that are or plan to become a CDFI intermediary, and that focus 
on providing loans to, or investments in, other CDFIs and/or to support 
the formation of CDFIs. This NOFA is not intended and should not be 
construed to allow an applicant to file a joint application on behalf 
of a group of other CDFIs, but rather to provide financial and 
technical assistance to intermediaries that provide financing, in arms-
length transactions, to other CDFIs and/or support the formation of 
CDFIs.

II. Eligibility

    The Act and the interim rule, as revised, specify the eligibility 
requirements that each applicant must meet in order to be eligible to 
apply for assistance under this Intermediary Component NOFA. At the 
time an entity submits its application, the entity must be a duly 
organized and validly existing legal entity under the laws of the 
jurisdiction in which it is incorporated or otherwise established. An 
entity must meet, or propose to meet, the CDFI eligibility 
requirements. In general, an applicant, individually and collectively 
with its affiliates, must have a primary mission of promoting community 
development. In addition, the applicant organization must: be an 
insured depository institution, a depository institution holding 
company or an insured credit union; or provide lending or equity 
investments; serve an investment area or a targeted population; provide 
development services; maintain community accountability; and be a non-
governmental entity. If an applicant is a depository institution 
holding company or an affiliate of a depository institution holding 
company, the applicant individually and collectively with its 
affiliates must meet all of the aforementioned requirements.
    The application accompanying this NOFA specifies that, with some 
exceptions, applicants seeking to designate an Other Targeted 
Population must provide a brief analytical narrative with information 
demonstrating that the designated group of individuals in the 
applicant's service area lacks adequate access to loans, Equity 
Investments or Financial Services. For purposes of this NOFA, the Fund 
has determined that credible evidence exists on a national level 
demonstrating that Blacks or African Americans, Native Americans or 
American Indians, and Hispanics or Latinos lack adequate access to 
loans, Equity Investments or Financial Services. To the extent that an 
applicant's service area is national and it is serving such 
population(s), it is not required to provide the above-referenced 
analytical narrative describing its service area's unmet loan, Equity 
Investment or Financial Service needs. However, the Fund believes it is 
important to ensure that organizations serving these Other Targeted 
Population(s) in regional or local service areas provide information 
from those service areas that is consistent with the national data. In 
addition, for the purpose of this NOFA, the Fund has determined that 
credible evidence exists that Alaska Natives residing in Alaska and 
Native Hawaiians or Other Pacific Islanders residing in Hawaii or other 
Pacific Islands lack adequate access to loans, Equity Investments or 
Financial Services. To the extent that an applicant is serving such 
Population(s), it is not required to provide the analytical narrative 
describing these Populations' unmet loan, Equity Investment or 
Financial Services needs.
    For purposes of this NOFA, the Fund will use the following 
definitions, set forth in the Office of Management and Budget (OMB) 
Notice, Revisions to the Standards for the Classification of Federal 
Data on Race and Ethnicity (October 30, 1997):
    (a) American Indian, Native American or Alaska Native: a person 
having

[[Page 49662]]

origins in any of the original peoples of North and South America 
(including Central America) and who maintains tribal affiliation or 
community attachment;
    (b) Black or African American: a person having origins in any of 
the black racial groups of Africa (terms such as ``Haitian'' or 
``Negro'' can be used in addition to ``Black or African American'');
    (c) Hispanic or Latino: a person of Cuban, Mexican, Puerto Rican, 
South or Central American or other Spanish culture or origin, 
regardless of race (the term ``Spanish origin'' can be used in addition 
to ``Hispanic or Latino''); and
    (d) Native Hawaiian or Other Pacific Islander: a person having 
origins in any of the original peoples of Hawaii, Guam, Samoa or other 
Pacific Islands.
    Since applicants under this NOFA do not directly serve Target 
Markets, but instead serve such markets through support of CDFIs and/or 
emerging CDFIs, applicants under this NOFA need not provide Target 
Market information for all of the Target Markets served by the CDFIs 
and/or emerging CDFIs that it serves. In the case of an applicant 
predominantly serving certified CDFIs, the Fund will assume that the 
applicant predominantly serves eligible Target Markets. Such an 
applicant need only specify the service area in which its certified 
CDFI clients are located (e.g., name of cities, counties, states, or 
national). In the case of an applicant for whom the predominance of 
activities is not directed toward certified CDFIs, the applicant must 
provide information on how it determines that its activities are 
principally directed towards organizations principally serving eligible 
Target Markets, such as requiring a minimum level of activity within 
Target Markets, or other means.
    This NOFA is limited to applicants that satisfy the following two 
requirements:
    (1) The applicant must meet the CDFI eligibility requirements at 
the time of application; and
    (2) The applicant's financial products (loans, equity investments, 
grants, and deposits in insured credit unions) and other activities 
must primarily focus on financing other CDFIs and/or supporting the 
formation of CDFIs.
    If the applicant does not meet the CDFI eligibility requirements 
and/or if the applicant's financial products and other activities do 
not primarily focus on financing and/or supporting the formation of 
CDFIs at the time of application, the application shall include a 
realistic plan for the applicant to meet both criteria by December 31, 
2001 (which period may be extended at the sole discretion of the Fund). 
In no event will the Fund disburse financial assistance to the 
applicant until the applicant is certified as a CDFI and demonstrates 
that its business activities primarily focus on other CDFIs and/or the 
formation of CDFIs. Further details regarding eligibility and other 
program requirements are found in the application packet.

III. Types of Assistance

    An applicant may submit an application for financial assistance 
and/or technical assistance (TA) under this NOFA. Financial assistance 
may be provided in the form of an equity investment, loan, or grant (or 
a combination of these financial assistance instruments). Applicants 
for financial assistance shall indicate the dollar amount, form, terms, 
and conditions of the assistance requested. Applicants for TA under 
this NOFA shall describe the type(s) of TA requested, when the TA will 
be acquired, the provider(s) of the TA, the cost of the TA, and a 
narrative explanation of how the TA will enhance their community 
development impact.

IV. Application Packet

    An applicant under this NOFA, whether applying for financial 
assistance, TA, or both, must submit the materials described in the 
application packet.

V. Matching Funds

    Applicants responding to this NOFA must obtain matching funds from 
sources other than the Federal government on the basis of not less than 
one dollar for each dollar of financial assistance provided by the 
Fund. Matching funds must be at least comparable in form and value to 
the assistance provided by the Fund. Non-Federal funds obtained or 
legally committed on or after January 1, 1999 and before August 31, 
2002 may be considered when determining matching funds availability. 
The Fund reserves the right to recapture and reprogram funds if an 
applicant fails to raise the required matching funds by August 31, 2002 
or to grant an extension of such matching funds deadline for specific 
applicants selected for assistance, if the Fund deems it appropriate. 
Funds used by an applicant as matching funds for a previous award under 
the CDFI Program or under another Federal grant or award program cannot 
be used to satisfy the matching funds requirement.

VI. Evaluation

    All applications will be reviewed for eligibility and completeness. 
If determined to be eligible and complete, applications will be 
evaluated by the Fund on a competitive basis in accordance with the 
criteria described in this NOFA. In conducting its substantive review, 
the Fund will evaluate the following criteria: (1) The applicant's 
ability to carry out its Comprehensive Business Plan and create 
community development impact (the Ability criterion); (2) the quality 
of the applicant's strategy for carrying out its Comprehensive Business 
Plan and for creating community development impact (the Strategy 
criterion); and (3) the extent to which an award to the applicant will 
maximize the effective use of the Fund's resources (the Effective Use 
criterion). In addition, the Fund will consider the institutional and 
geographic diversity of applicants in making its funding 
determinations.

Phase One

    In Phase One of its substantive review, the Fund will evaluate 
applications using a 100 point scale, as follows:
    (a) Ability to Carry Out the Comprehensive Business Plan and Create 
Community Development Impact: 50 point maximum, with a minimum score of 
25 points required to be passed on for Phase Two review. The score of 
the Ability criterion is based on a composite assessment of an 
applicant's organizational strengths and weaknesses under the four sub-
criteria listed below. Such scoring reflects different weighting of the 
sub-criteria depending on whether an applicant is a start-up 
organization or an established organization. The Fund defines a start-
up organization as an entity that has been in operation for two years 
or less, as of the date of this NOFA (meaning, for purposes of this 
NOFA, having incurred initial operating expenses after August 14, 
1998). For purposes of this NOFA, start-up organizations will not be 
evaluated, under the Ability criterion, on their previous community 
development and financial track records. Instead, start-up 
organizations will be scored entirely on operational and management 
capacity.
    Under the Ability section of the application, the Fund will 
evaluate the following four sub-criteria:
    (i) Community development track record, including activities and 
impacts relating to small and emerging CDFIs and CDFIs that have not 
received assistance from the Fund: 12 point

[[Page 49663]]

maximum (established organizations only);
    (ii) Operational capacity and risk mitigation strategies: 12 point 
maximum (established organizations), 20 point maximum (start-ups);
    (iii) Financial track record and strength: 12 point maximum 
(established organizations only); and
    (iv) Capacity, skills and experience of the management team: 14 
point maximum (established organizations), 30 point maximum (start-
ups).
    (a) Quality of the Strategy for Carrying Out the Comprehensive 
Business Plan and for Creating Community Development Impact: 40 point 
maximum with a minimum of 20 points required to be passed on for Phase 
Two review. Under the Strategy section of the application, the Fund 
will evaluate the following four sub-criteria:
    (i) The applicant's understanding of its market: 10 point maximum;
    (ii) Program design and implementation plan: 10 point maximum;
    (iii) Projections for financial performance and raising needed 
resources: 10 point maximum; and
    (iv) Projections for generating, measuring and evaluating community 
development impact: 10 point maximum. In the case of an applicant that 
has previously received assistance from the Fund under the CDFI 
Program, the Fund will consider whether the applicant will expand its 
operations into a new target market, offer more products or services, 
and/or increase the volume of its activities.
    (a) Maximizing Effective Use of Fund Resources: 10 point maximum, 
with no minimum score required to be passed on for Phase Two review. 
The Fund will consider (i) the extent to which the applicant needs the 
Fund's assistance to carry out its Comprehensive Business Plan, (ii) 
the extent of economic distress in the applicant's target market, and 
(iii) the extent to which the applicant's assistance to CDFIs and CDFIs 
in formation provides additional benefits, especially to small and 
emerging CDFIs, that are not provided by the activities of the CDFI 
Fund. In addition, in the case of an applicant that has previously 
received assistance from the Fund under the CDFI Program, the Fund will 
consider the applicant's level of success in meeting its performance 
goals, financial soundness covenants (if applicable) and other 
requirements contained in the assistance agreement(s) with the Fund, 
and the benefits that will be created with new Fund assistance over and 
above benefits created by previous Fund assistance.

Phase Two

    Once the initial evaluation is completed, the Fund will determine 
which applications will receive further consideration for funding based 
on application scores (standardized if deemed appropriate), 
recommendations of individuals performing initial reviews and the 
amount of funds available. Applicants that advance to Phase Two may 
receive a site visit and/or telephone interview(s) conducted by a Fund 
reviewer for the purpose of obtaining clarifying or confirming 
information. At this point in the process, applicants will be required 
to submit additional information, as set forth in detail in the 
application packet. After conducting such site visits/telephone 
interview(s), the Fund reviewers will evaluate all applications in 
accordance with all of the evaluation criteria outlined above and 
prepare recommendation memoranda containing recommendations on the type 
and amount of assistance, if any, that should be provided to each 
applicant.
    A final review panel comprised of Fund staff will consider each 
Fund reviewer's recommendation memorandum and make a final 
recommendation to the Fund's selecting official. In making its 
recommendations, the final review panel also may consider the 
institutional diversity and geographic diversity of applicants (e.g., 
recommending a CDFI from a State in which the Fund has not previously 
made an award over a CDFI in a State in which the Fund has already made 
numerous awards).
    The Fund's selecting official will make a final funding 
determination based on the applicant's file, including, without 
limitation, Fund reviewer's recommendation memorandum and the panel's 
recommendation, and the amount of funds available. In the case of 
regulated CDFIs, the selecting official will also take into 
consideration the views of the appropriate Federal banking agencies.
    The Fund reserves the right to change these evaluation procedures 
if the Fund deems it appropriate.

VII. Information Sessions

    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 
Core and Intermediary Components of the CDFI Program. Registration is 
required, as the Information Sessions will be held in secured federal 
facilities. The Fund will conduct 12 in-person Information Sessions, 
beginning September 20, 2000, as follows:

Los Angeles, CA, September 20, 2000;
San Francisco, CA, September 22, 2000;
Chicago, IL, September 25, 2000;
Miami, FL, September 26, 2000;
Salt Lake City, UT, September 29, 2000;
Kansas City, MO, October 2, 2000;
Memphis, TN, October 3, 2000;
Charlotte, NC, October 4, 2000;
Minneapolis, MN, October 4, 2000;
Boston, MA, October 5, 2000;
San Antonio, TX, October 5, 2000; and
New York, NY, October 6, 2000.


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    In addition to the in-person sessions listed above, the Fund will 
broadcast an Information Session using interactive video-
teleconferencing technology on October 12, 2000, 1 p.m. to 4 p.m. EST. 
Registration is required, as these sessions will be held in secured 
federal facilities. This Information Session will be produced in 
Washington, DC, and will be downlinked via satellite to the local 
Department of Housing and Urban Development (HUD) offices located in 
the following 81 cities: Albany, NY: Albuquerque, NM; Anchorage, AK; 
Atlanta, GA; Baltimore, MD; Bangor, ME; Birmingham, AL; Boise, ID; 
Boston, MA; Buffalo, NY; Burlington, VT; Camden, NJ; Casper, WY; 
Charleston, WV; Chicago, IL; Cincinnati, OH; Cleveland, OH; Columbia, 
SC; Columbus, OH; Dallas, TX; Denver, CO; Des Moines, IA; Detroit, MI; 
Fargo, ND; Flint, MI; Fort Worth, TX; Fresno, CA; Grand Rapids, MI; 
Greensboro, NC; Hartford, CT; Helena, MT; Honolulu, HI; Houston, TX; 
Indianapolis, IN; Jackson, MS; Jacksonville, FL; Kansas City, KS; 
Knoxville, TN; Las Vegas, NV; Little Rock, AR; Los Angeles, CA; 
Louisville, KY; Lubbock, TX; Manchester, NH; Memphis, TN; Miami, FL; 
Milwaukee, WI; Minneapolis, MN; Nashville, TN; New Orleans, LA; New 
York, NY; Newark, NJ; Oklahoma City, OK; Omaha, NE; Orlando, FL; 
Philadelphia, PA; Phoenix, AZ; Pittsburgh, PA; Portland, OR; 
Providence, RI; Reno, NV; Richmond, VA; Sacramento, CA; St. Louis, MO; 
Salt Lake City, UT; San Antonio, TX; San Diego, CA; San Francisco, CA; 
San Juan, PR; Santa Ana, CA; Seattle, WA; Shreveport, LA; Sioux Falls, 
SD; Spokane, WA; Springfield, IL; Syracuse, NY; Tampa, FL; Tucson, AZ; 
Tulsa, OK; Washington, DC; and Wilmington, DE.
    To register online for an Information Session, please visit the 
Fund's website at www.treas.gov/cdfi. If you do not have Internet 
access, you may register by calling the Fund at (202) 622-8662.

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

    Dated: August 7, 2000.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development 
Financial Institutions Fund.
[FR Doc. 00-20269 Filed 8-11-00; 8:45 am]
BILLING CODE 4810-70-P