[Federal Register Volume 65, Number 172 (Tuesday, September 5, 2000)]
[Notices]
[Pages 53872-53878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22513]



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Part III





Department of the Treasury





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Community Development Financial Institutions Fund



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Funds of Availability (NOFA) Inviting Applications for the Bank 
Enterprise Award Program; Notice

  Federal Register / Vol. 65, No. 172 / Tuesday, September 5, 2000 / 
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, the regulations that 
govern the Bank Enterprise Award (``BEA'') Program (the ``BEA Program 
Regulations''). As of the date of this NOFA, the Fund intends to make 
available up to $30 million in BEA Program funds, subject to the 
availability of appropriated funds. The Fund may award in excess of $30 
million if it deems it appropriate, subject to the availability of 
appropriated funds. Under this NOFA, the Fund anticipates a maximum 
award amount of $2.5 million per applicant. However, the Fund reserves 
the right to award amounts in excess of the anticipated maximum award 
amount, if the Fund deems it appropriate.

DATES: Applications may be submitted at any time on or after September 
5, 2000. The deadline for receipt of an application is 6 p.m. Eastern 
Standard Time on Tuesday, November 21, 2000. 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 purpose of the BEA 
Program is strongly encouraged to submit the Application Form for 
Certification (the contents of which are described in 12 CFR 
1805.201(b)(1) through (7)), by Tuesday, November 21, 2000. If an 
entity fails to submit such application by this deadline, the Fund may 
not have sufficient time to timely complete a certification review for 
the purpose 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 1805.201(b)(1) 
through (7). If the entity seeking certification does not respond to 
such requests in a timely manner, the Fund may not have sufficient time 
to timely 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: 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 
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 telephone at (202) 622-8662, by 
facsimile at (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

    As part of a national strategy to facilitate revitalization and 
increase the availability of credit, investment capital and financial 
services 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. 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 
BEA Program. Pre-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.
    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, from 1 p.m. to 4 p.m. 
EST. Pre-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,

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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 http://ww.treas.gov/cdfi. If you do not have Internet 
access, you may register by calling the Fund at (202) 622-8662.

III. Eligibility

    The Act specifies that eligible Applicants must be insured 
depository institutions as defined in 12 U.S.C. 1813(c)(2).

IV. 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 that are eligible to be designated as Distressed Communities. 
Specifically, the Fund will provide such information through the CDFI 
Fund Help Desk website (the ``Help Desk''). The Help Desk is found at 
http://www.treas.gov/cdfi. The Fund requires all Applicants to use the 
Help Desk to produce the Distressed Community worksheets and 
corresponding maps. The Help Desk provides easy step-by-step 
instructions on how to designate a Distressed Community and allows an 
Applicant to create and print instantly a Distressed Community 
designation worksheet(s) and corresponding map(s).

V. Designation Factors

    The BEA Program Regulations describe the Fund's processes for 
rating and selecting Applicants to receive assistance and for 
determining award amounts. The BEA Program rating and selection process 
gives 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 
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.
    For Applicants pursuing Development and Service Activities, a 
multiple step procedure is outlined in the BEA Program Regulations that 
will be used to calculate the estimated award amounts. 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 multiple 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 multiple step 
procedure. When ranking and funding Applicants in each category, the 
Fund will apply criteria contained in the BEA Program Regulations. 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 Applicant if the Fund deems it appropriate.

VI. 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 
Period beginning January 1, 2000 and ending June 30, 2000. An Applicant 
shall also project the Qualified Activities that it expects to carry 
out during the 6-month Assessment Period beginning January 1, 2001 and 
ending June 30, 2001. Applicants participating 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 
Thursday, August 2, 2001. 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.

VII. Targeted Financial Services

    The lack of availability of Financial Services (as defined 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. For the purpose of this NOFA, the Fund provides 
the following guidance to Applicants regarding three specific types of 
targeted Financial Services: (1) Electronic Transfer Accounts 
(``ETAs''); (2) Individual Development Accounts (``IDAs''); and (3) 
First Accounts, which are bank accounts designed to bring Low- and 
Moderate-Income people, whether they never have had an account or 
previously had an account, into the financial services system (``First 
Accounts'').

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 (``EFT Rule''), implementing the mandatory electronic funds 
transfer (``EFT'') requirements of the Debt Collection Improvement Act 
of 1996. 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 (64 FR 38510), setting forth the characteristics of ETAs.
    For the purpose 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 federally 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, while an Applicant is not limited to

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offering ETAs only to Low- and Moderate-Income people, only those ETA 
products that are provided to Low- and Moderate-Income individuals at 
locations in Distressed Communities, as required by 12 CFR 1806.103(u), 
are eligible for purposes of receiving a BEA Program award.
    As provided at 12 CFR 1806.202(c)(3), all Financial Service 
activities must be valued ``based on the administrative costs of 
providing such services.'' For the purpose 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 Program award for ETA 
activities does not need to submit documentation of administrative 
expenses incurred in delivering its product. Instead, the Applicant 
must indicate the number of ETAs opened by Low- and Moderate-Income 
individuals at locations in the Distressed Community, which shall be 
multiplied by $50.00 to yield the respective Baseline Period and 
Assessment Period levels of ETA activity. The resulting number shall be 
reported as the value of total eligible ETA activities for the purpose 
of calculating award amounts.
    For the purpose 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 ETAs opened by Low- and Moderate Income 
individuals at locations in Distressed Communities.
    An Applicant may calculate the number of ETAs opened by Low- and 
Moderate-Income individuals by either: (1) Collecting income data on 
its ETA customers; (2) certifying that the Applicant reasonably 
believes that ETA holders are Low- and Moderate-Income individuals and 
providing a brief analytical narrative with information describing how 
the Applicant made this determination; or (3) using the Fund's 
methodology described below.
    The Fund has developed a methodology for estimating the number of 
Low- and Moderate-Income ETA holders in lieu of requiring Applicants to 
collect data on the actual income levels of account holders. For both 
the Baseline Period and the Assessment Period, the value of ETAs shall 
be derived based on the total number of new accounts multiplied by the 
per unit value of $50.00. This number shall be multiplied by the total 
percentage of Low- and Moderate-Income individuals who are residents of 
the census tract where the ETA was opened (e.g., bank branch). Such 
census tract must be part of a Distressed Community. The Help Desk 
includes a new component that will provide the needed census data and 
make the calculations for Applicants.
    The Fund is aware that Treasury's Financial Management Service will 
provide insured depository institutions that offer ETAs compensation 
equal to $12.60 per ETA to offset the set-up costs of opening an ETA. 
The ETA award amount provided through this NOFA is intended to assist 
insured depository institutions to cover other costs associated with 
offering ETAs.
    If an Applicant seeks a BEA Program award 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).
    Applicants may wish to know that the Federal Financial Institutions 
Examination Council (FFIEC) has issued interpretive guidance under the 
Community Reinvestment Act on ETAs and other financial services, which 
may be obtained from the FFIEC website.

B. Individual Development Accounts

    On December 14, 1999, the Office of Community Services of the 
Administration for Children and Families (``OCS'') of the U.S. 
Department of Health and Human Services published Program Announcement 
OCS-2000-04 (``IDA Program Announcement'') in the Federal Register (64 
FR 69824) to implement the second year of the Assets for Independence 
Demonstration Program (``IDA Program'') authorized pursuant to the 
Assets for Independence Act, 42 U.S.C. 604. The IDA Program 
Announcement stated that OCS expected up to $5.4 million in FY 2000 
funds to be available for funding commitments to approximately 25 
projects, not to exceed $500,000 per project and averaging $200,000 for 
the five-year project and budget periods. 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 
through the promotion of savings for postsecondary education, 
homeownership and microenterprise development. This NOFA provides 
guidance to BEA Program Applicants on how IDAs may be used, under the 
BEA Program, to serve Low- and Moderate-Income individuals at locations 
in Distressed Communities.
    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 support services; and (4) may be provided by 
non-profit organizations collaborating with financial institutions 
(which includes insured depository institutions) that may be acting as 
Trustees, Custodians or in some other capacity.
    Interested parties are instructed to refer to the IDA Program 
Announcement for further IDA Program information. Such information may 
be found at http://www.acf.dhhs.gov/programs/ocs/ under ``Funding 
Opportunities'' or through a link at the Fund's main website at http://www.treas.gov/cdfi. While an Applicant is not required to be a 
participant in the IDA Program to receive a BEA Program award for its 
IDA activities, IDAs established under an IDA Program grant must meet 
the requirements set forth in the IDA Program Announcement (including 
part II, sections G(4) and (5)).
    For the purpose 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 IDA Program Announcement.
    For the purpose of this NOFA, the Fund will presume that IDAs 
established for Project Participants by financial institutions, as 
discussed in the IDA Program Announcement (including part II, section 
G(3)), benefit Low- and Moderate-Income individuals based on the 
requirements for Eligible Individuals described under part II, G(3) (a) 
of the IDA Program Announcement, which states that ``Eligibility 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, which 
establishes the eligibility for the Earned Income Tax Credit (EITC) 
(taking into account the size of the household), and whose net worth as 
of the end of the calendar year 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.''

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    As provided at 12 CFR 1806.202(c)(3), all Financial Service 
activities must be valued ``based on the administrative costs of 
providing such services.'' For the purpose of this NOFA, the Fund will 
value the administrative cost of providing an IDA at $100.00 per 
account. Thus, an Applicant seeking a BEA Program award for IDA 
activities does not need to submit documentation of administrative 
expenses incurred in delivering its product. Instead, the Applicant 
must indicate the number of IDAs opened by Low- and Moderate-Income 
individuals at a location in a Distressed Community, which shall be 
multiplied by $100.00 to yield the respective Baseline Period and 
Assessment Period levels of IDA activities.
    For the purpose 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 IDAs opened by Low- and Moderate-Income 
individuals at locations in Distressed Communities.
    For institutions not providing IDAs in collaboration with a Project 
Grantee under the IDA Program, an Applicant may calculate the number of 
IDAs opened by Low- and Moderate-Income individuals by either: (1) 
Collecting income data on its IDA customers; (2) certifying that the 
Applicant reasonably believes that IDA holders are Low- and Moderate-
Income individuals and providing a brief analytical narrative with 
information describing how the Applicant made this determination; or 
(3) using the Fund's methodology described below.
    The Fund has developed a methodology for estimating the number of 
Low- and Moderate-Income IDA holders in lieu of requiring Applicants to 
collect data on the actual income levels of IDA holders. For both the 
Baseline Period and the Assessment Period, the value of IDA activities 
may be derived based on the total number of new IDAs opened multiplied 
by the per unit value of $100.00. This number shall then be multiplied 
by the total percentage of Low- and Moderate-Income individuals who are 
residents of the census tract where the IDA was opened (e.g., bank 
branch). Such census tract must be part of a Distressed Community. The 
Help Desk includes a new component that will provide the needed census 
tract data and make the calculations for Applicants. The Help Desk can 
be found at http://www.cdfifundhelp.gov or http://www.treas.gov/cdfi.
    If an Applicant seeks a BEA Program award for providing financial 
literacy classes, related training, one-on-one technical assistance, or 
supportive services 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 Program award for providing 
matching fund grants directly to IDA Program Project Participants' 
accounts or to IDA Program 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.
    Applicants may wish to know that the Federal Financial Institutions 
Examination Council (FFIEC) has issued interpretive guidance under the 
Community Reinvestment Act on IDAs and other financial services, which 
may be obtained from the FFIEC website.

C. First Accounts

    The President's FY 2001 budget request includes $30 million for 
Treasury to implement an initiative that aims to increase access to 
mainstream financial institutions and services for individuals and 
families who currently do not have a banking relationship with a 
mainstream financial institution. The need for such an initiative is 
illustrated by a 1998 Survey of Consumer Finances conducted by the 
Federal Reserve Board, which found that 22 percent of Low- and 
Moderate-Income families--approximately 8.4 million families--do not 
have any kind of bank account. Some of these families receive Federal 
benefits and thus are eligible to open an ETA at a participating 
financial institution. Approximately half, however, may not be eligible 
for an ETA, may lack access to an affordable transaction account at a 
mainstream financial institution, or may not understand the benefits of 
account ownership. The First Accounts initiative would permit Treasury 
to work with insured depository institutions, community organizations 
and electronic banking networks to increase ownership of low-cost bank 
accounts (``First Accounts'') by people who currently do not hold 
transaction accounts at mainstream financial institutions, to place new 
ATMs in safe, secure locations in communities that lack access to these 
services, and to provide financial literacy education to lower-income 
families.
    As a complement to that initiative, to stimulate the provision of 
low-cost financial services for people who currently do not hold 
transaction accounts at mainstream financial institutions, and to help 
inform Treasury which strategies are most successful for reaching this 
population, this NOFA will consider the provision of First Accounts and 
related financial literacy education as Qualified Activities.
    This NOFA sets forth a minimum set of attributes of a First 
Account. For the purpose of this NOFA, a First Account shares certain 
basic features with an ETA. A First Account: (1) Is an individually 
owned account at a Federally-insured financial institution; (2) permits 
a minimum of four cash withdrawals and four balance inquiries per 
month, which are included in the monthly fee, through any combination 
of automated teller machine (ATM) transactions and/or over-the-counter 
transactions; (3) allows access to the insured depository institution's 
on-line point-of-sale network (if any); (4) requires no minimum balance 
except as required by Federal or state law; (5) provides a monthly 
statement; and (6) provides the same consumer protections that are 
available to other account holders at the financial institution. (Note 
that the ``ETA'' product may only be offered to Federal benefit 
recipients. Applicants wishing to use the same product design as the 
ETA for First Accounts must market the product under a name other than 
``ETA'' or ``Electronic Transfer Account.'')
    The principal distinctions between ETAs and First Accounts are that 
ETAs: (1) Can only be offered to individuals receiving Federal benefit, 
wage, salary or retirement payments; (2) allow set-off only for fees 
directly related to the account; and (3) are subject to a maximum 
monthly account-servicing fee of $3.00. For the purpose of this NOFA, 
while First Accounts do not require these features, First Accounts must 
have, at a minimum, the features set forth in the immediately preceding 
paragraph. Financial institutions may experiment with offering a 
variety of additional features and prices, so long as the accounts are 
targeted to Low- and Moderate-Income people in Distressed Communities. 
An Applicant wishing to receive BEA Program consideration for the 
provision of First Accounts shall submit documentation of its product 
features, including materials used to market it. The Fund will use such 
information to determine whether the product meets the requirements of 
a First Account.

[[Page 53876]]

    In designing a First Account product, the Fund encourages 
Applicants to consider how offering additional features as part of 
First Accounts could reduce costs, increase utility to consumers, and 
increase demand for these low-cost account products. Additional 
guidance on the design of First Accounts, prepared by Treasury's Office 
of Community Development Policy, may be found at http://www.treas.gov/cdfi.
    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.'' In order to 
reduce Applicants' paperwork and administrative burden, the Fund will 
value the administrative cost of providing a First Account at $280.00 
per account. This value is intended to compensate BEA Program awardees 
for the costs of First Accounts design, setting up each First Account, 
and marketing First Accounts to consumers currently lacking transaction 
accounts at mainstream financial institutions. Thus, an Applicant 
seeking a BEA Program award for First Account activities does not need 
to submit documentation of administrative expenses incurred in 
delivering its product. Instead, the Applicant must indicate the number 
of First Accounts opened by Low- and Moderate-Income individuals in a 
Distressed Community. This number shall be multiplied by $280.00 to 
yield the respective Baseline Period and Assessment Period levels of 
First Accounts activities. That number shall be reported as the value 
of eligible First Account activities for the purpose of calculating 
award amounts.
    For the purpose 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 First Accounts opened by Low- and 
Moderate-Income individuals in Distressed Communities.
    An Applicant may calculate the number of First Accounts opened by 
Low- and Moderate-Income individuals by either: (1) Collecting income 
data on its First Account customers; (2) certifying that the Applicant 
reasonably believes that First Account holders are Low- and Moderate-
Income individuals and providing a brief analytical narrative with 
information describing how the Applicant made this determination; or 
(3) using the Fund's methodology described below.
    The Fund has developed a methodology for estimating the number of 
Low- and Moderate-Income First Account holders in lieu of requiring 
Applicants to collect data on the actual income levels of First Account 
holders. For both the Baseline Period and the Assessment Period, the 
value of First Accounts shall be derived based on the total number of 
new First Accounts multiplied by a per unit value of $280.00. This 
number shall be multiplied by the total percentage of Low- and 
Moderate-Income individuals who are residents of the census tract where 
the First Account was opened (e.g., bank branch). Such census tract 
must be part of a Distressed Community. The Help Desk includes a new 
component that will provide the needed census data and make the 
calculations for Applicants. The Help Desk can be found at http://www.cdfifundhelp.gov or http://www.treas.gov/cdfi.
    Applicants seeking a BEA Program award for providing financial 
literacy classes or one-on-one technical assistance to First Accounts 
holders must submit documentation of the costs of providing such 
services and report such activities as Community Service Activities.

VIII. Reporting Financial Service Activities

    Under the BEA Program Regulations at 12 CFR 1806.202(c)(3), 
Applicants are required to report Financial Service Activities based on 
the ``administrative costs'' of delivering such services. Further, at 
12 CFR 1806.103(u), eligible Financial Service activities are limited 
to those services provided to ``Low- and Moderate-Income persons in the 
Distressed Community or enterprises integrally involved with the 
Distressed Community.'' Many Applicants have found it difficult to 
disaggregate the administrative costs of providing specific products 
and services from other administrative costs, as well as determine 
whether the Financial Services were provided to Low- and Moderate-
Income individuals in a Distressed Community.
    In an effort to simplify the reporting requirements and reduce 
paperwork burden, the Fund is providing a new method for reporting such 
Financial Service activities. Similar to the methodology described 
above under Targeted Financial Services, the Fund will value the 
administrative cost of providing certain Financial Services at 
specified per unit values. The per unit values of specific types of 
Financial Services are as follows: (a) $25.00 per account for non-ETA, 
non-IDA and non-First Account savings accounts (translating into an 
award of $2.50 and $7.50 per account increase for non-CDFIs and CDFIs, 
respectively); (b) $40.00 per account for checking accounts 
(translating into an award of $4.00 and $12.00 per account increase for 
non-CDFIs and CDFIs, respectively); (c) $5.00 per check cashing 
transaction times the total number of check cashing transactions 
(translating into an award of $.50 and $1.50 per transaction increase 
for non-CDFIs and CDFIs, respectively); (d) $25,000 per new ATM 
installed at a location in a Distressed Community (translating into an 
award of $2,500 and $7,500 per new ATM installed for non-CDFIs and 
CDFIs, respectively); (e) $2,500 per ATM operated at a location in a 
Distressed Community (translating into an award of $250 and $750, for 
non-CDFIs and CDFIs, respectively,); (f) $250,000 per new retail bank 
branch office opened in a Distressed Community (translating into an 
award of $25,000 and $75,000 per new branch opened for non-CDFIs and 
CDFIs, respectively); and (g) in the case of Applicants engaging in 
Financial Service activities not described above, the Fund will 
determine the account or unit value of such services. In the case of 
opening a new retail bank branch office, the Applicant must certify 
that it has not operated a retail branch in the same census tract in 
which the new retail branch office is being opened in the past three 
years, and that such new branch will remain in operation for at least 
the next five years.

----------------------------------------------------------------------------------------------------------------
                                                                           BEA program award
                                        Unit of                               amount per       BEA program award
        Type of activity              measurement       Per unit value       activity: Non        amount per
                                                                                 CDFIs          activity: CDFIs
----------------------------------------------------------------------------------------------------------------
Savings Accounts (other than      Per account opened  $25.00............  $2.50.............  $7.50
 ETAs, IDAs, First Accounts).
Checking Accounts (other than     Per account opened  40.00.............  4.00..............  12.00
 ETAs, IDAs, First Accounts).
Check Cashing...................  Per number of       5.00..............  0.50..............  1.50
                                   check cashing
                                   transactions.
ATM Installation................  Per ATM installed   25,000.00.........  2,500.00..........  7,500.00
                                   in a Distressed
                                   Community.

[[Page 53877]]

 
ATM Operation...................  Per ATM operated    2,500.00..........  250.00............  750.00
                                   in a Distressed
                                   Community.
Branch Opening..................  Per branch opened   250,000.00........  25,000.00.........  75,000.00
                                   in a Distressed
                                   Community.
ETAs............................  Per ETA opened....  50.00.............  5.00..............  15.00
IDAs............................  Per IDA opened....  100.00............  10.00.............  30.00
First Accounts..................  Per First Account   280.00............  28.00.............  84.00
                                   opened.
----------------------------------------------------------------------------------------------------------------

    For the purpose 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 Financial Services provided to Low- and 
Moderate-Income individuals in Distressed Communities.
    An Applicant may derive the total percentage of Low- and Moderate-
Income individuals who are recipients of Financial Services by either: 
(1) Collecting income data on its Financial Services customers; (2) 
certifying that the Applicant reasonably believes that such customers 
are Low- and Moderate-Income individuals and providing a brief 
analytical narrative with information describing how the Applicant made 
this determination; or (3) using the Fund's methodology described 
below.
    The Fund has developed a methodology for estimating the number of 
Low- and Moderate-Income Financial Service customers rather than 
requiring Applicants to collect data on the actual income levels of its 
Financial Service customers. For both the Baseline Period and the 
Assessment Period, the value of Financial Services shall be derived 
based on the total number of new accounts, transactions or other 
eligible service multiplied by a per unit value of such services. This 
number shall be multiplied by the total percentage of Low- and 
Moderate-Income individuals who are residents of the census tracts 
where the Financial Service was provided (e.g., bank branch, ATM 
location). Such census tract must be part of a Distressed Community. 
The Help Desk includes a new component that will provide the needed 
census tracts data and make the calculations for Applicants. The Help 
Desk can be found at http://www.cdfifundhelp.gov or http://www.treas.gov/cdfi.

IX. Information-Gathering Sessions

    The Fund recently convened information gathering sessions in four 
cities, Los Angeles (June 21, 2000), Dallas (June 23, 2000), New York 
(June 28, 2000), and Chicago (June 30, 2000), to discuss possible 
changes to the BEA Program Regulations, gather facts and information, 
and seek input from individual attendees on how to improve the BEA 
Program. The Fund published a Notice in the Federal Register on June 7, 
2000 to inform the general public about the meetings and mailed written 
notices to 1999 and 2000 BEA Program Applicants and currently certified 
CDFIs.
    Among the topics discussed by session participants were: (1) 
Whether the BEA Program should change the 6-month Baseline Period and 
Assessment Period to a 12-month Baseline Period and Assessment Period; 
(2) whether the Fund should conduct a ``pre-selection'' process whereby 
it would select program participants prior to the beginning of an 
Assessment Period, with the Fund issuing a commitment letter to such 
participants, subject to successful completion of the activities 
discussed in BEA Program applications; (3) whether the Fund should give 
additional consideration in the form of higher selection priority and/
or greater award amounts to Applicants that provide debt financing to 
CDFIs with, relatively speaking, more favorable terms (e.g., being 
lower priced or more flexible); (4) whether the Fund should give 
additional consideration in the form of higher selection priority and/
or greater award amounts to Applicants that carry out Development and 
Service Activities that are targeted to serve Low- and Moderate-Income 
Residents of a Distressed Community or that create high community 
development impact in a Distressed Community; (5) whether the Fund 
should simplify the process for reporting Financial Service activities; 
and (6) what types of products, services or programs should be included 
in the definition of a First Account to attract customers who currently 
do not have a banking relationship with a mainstream financial 
institution.
    Participants expressed a wide variety of opinions on each of the 
topics and provided valuable feedback to the Fund. Some of the comments 
concerning how the Fund calculates provision of Financial Services and 
the establishment of First Accounts as Qualified Activities have been 
incorporated into this NOFA. The Fund is currently considering whether, 
in light of the views expressed, any additional proposed changes to the 
BEA Program should be included in a revised interim rule.

X. Waivers

    First, for the purpose of streamlining the application process and 
reducing burdens on Applicants, and pursuant to 12 CFR 1806.104, the 
Fund hereby waives the regulatory requirement that Applicants submit 
the items described at 12 CFR 1806.206(b)(1), (4) and (7). 
Specifically, for the purpose of this NOFA, an Applicant is not 
required to submit: (1) copies of its certificate of insurance issued 
by the Federal Deposit Insurance Corporation, articles of 
incorporation, Federal or state-issued bank or thrift charter, by-laws 
and other establishing documents for the purpose of establishing 
eligibility for an award; (2) a copy of its most recent Report of 
Condition or Thrift Financial Report; or (3) a copy of its most recent 
annual report. The Fund has waived the requirement that these items be 
submitted with the application because the Federal Deposit Insurance 
Corporation will conduct a verification of eligibility for the Fund 
based on information it has collected from insured depository 
institutions. Further, each Applicant's total asset size will be 
obtained by the Fund through other publicly available data sources 
(specifically, the Fund will use data reported through the Federal 
Deposit Insurance Corporation's website).
    Second, for the purpose of this NOFA and the NOFA published in the 
Federal Register on September 1, 1999 (64 FR 48062), the Fund is 
waiving two of the requirements set forth in 12 CFR 1806.103(m) of the 
BEA Program Regulations. Section 1806.103(m) provides that an Applicant 
may receive an award under the BEA Program for assistance provided to 
an uncertified CDFI that, at the time of the Qualified Activity, does 
not meet the CDFI

[[Page 53878]]

eligibility requirements if: (1) The Applicant requires the uncertified 
CDFI to refrain from using the assistance provided until the entity is 
certified; (2) the uncertified CDFI is certified by the end of the 
applicable Assessment Period; and (3) the Applicant retains the option 
of recapturing said assistance in the event the uncertified CDFI is not 
certified by the end of the applicable Assessment Period.
    The Fund believes that waiving the first requirement will further 
the purposes of the Act. Specifically, the Conference Report underlying 
the Act provides that Congress intended the BEA Program to affect 
immediately economically distressed communities through infusion of 
private dollars as loans, services, and technical assistance to, and 
equity investments in, CDFIs. The Fund believes the requirement that an 
uncertified CDFI refrain from using the assistance would defeat the 
purposes of the Act by delaying the uncertified CDFI's ability to use 
such capital for projects that are intended to catalyze urban and rural 
economic revitalization.
    The Fund also believes that there is good cause to waive the third 
requirement. First, requiring an Applicant to retain the option of 
recapturing assistance in the event the uncertified CDFI is not 
certified by the end of the applicable Assessment Period is a matter of 
business judgment best left to the Applicants themselves. Second, it 
potentially imposes added paperwork burdens on Applicants that use 
standardized loan or investment agreements.
    As a result, if an Applicant provides assistance to an uncertified 
CDFI during the applicable Assessment Period, such assistance may be 
eligible for an award under the BEA Program if the Fund certifies the 
entity by the end of the applicable Assessment Period.

Catalog of Federal Domestic Assistance: 21.021

    Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713; 12 CFR part 
1806.

    Dated: August 29, 2000.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development 
Financial Institutions Fund.
[FR Doc. 00-22513 Filed 8-1-00; 8:45 am]
BILLING CODE 4810-7-P