[Federal Register Volume 65, Number 228 (Monday, November 27, 2000)]
[Notices]
[Pages 70764-70767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30154]



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Part II





Department of the Treasury





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Community Development Financial Institutions Fund



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Notice of Funds Availability (NOFA) Inviting Applications for the 
Community Development Financial Institutions Program--Small and 
Emerging CDFI Assistance (SECA) Component; Notice

  Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / 
Notices  

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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 Program--Small and 
Emerging CDFI Assistance (SECA) 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'') of the 
U.S. Department of the Treasury to select and provide financial and 
technical assistance to eligible applicants under the Community 
Development Financial Institutions (``CDFI'') Program. The interim rule 
(12 CFR part 1805), most recently revised and published in the Federal 
Register on August 14, 2000, provides guidance on the contents of the 
necessary 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 funding availability, 
the Fund intends to award up to $10 million in appropriated funds under 
this NOFA and expects to issue approximately 70 to 100 awards. The Fund 
reserves the right to award in excess of $10 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 SECA Component of the 
CDFI Program. The SECA Component provides direct assistance to CDFIs 
and entities that propose to become CDFIs in order to enhance their 
capacity to serve their respective Target Markets. The SECA Component 
includes direct assistance in the form of technical assistance (TA) and 
financial assistance (FA). The SECA Component replaces the TA Component 
of the CDFI Program, administered by the Fund in 1998, 1999 and 2000, 
through which the Fund provided TA to CDFIs and entities proposing to 
becoming CDFIs.

DATES: Applications may be submitted on and following November 27, 2000 
up to the application deadline. The deadline for receipt of an 
application is 6 p.m. EST, March 27, 2001. 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 electronically or by facsimile will not be accepted.

FOR FURTHER INFORMATION CONTACT: If you have any questions about 
programmatic requirements, contact the SECA Program Manager. Should you 
wish to request an application package or have questions regarding 
application procedures, contact the Awards Manager. The SECA 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 (these are not toll free numbers), or by mail at CDFI 
Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 20005. 
Allow at least one to two weeks from the date the Fund receives an 
application request for receipt of the application package. Application 
materials and other information regarding the Fund and its programs may 
be downloaded from the Fund's web site at http://www.treas.gov/cdfi.

SUPPLEMENTARY INFORMATION:

I. Background

    Credit and investment capital are essential ingredients for 
developing affordable housing, starting or expanding businesses, 
creating and retaining jobs from these businesses, revitalizing 
neighborhoods, and empowering people. Access to financial services is 
critical to help bring more Americans into the economic mainstream. As 
a key urban and rural policy initiative, the CDFI Program funds and 
supports a national network of financial institutions that is 
specifically dedicated to funding and supporting community development. 
This strategy builds strong institutions that make loans and 
investments and provide services to economically distressed investment 
areas and in economically disadvantaged targeted populations. The Act 
authorizes the Fund to select entities to receive FA and TA. This NOFA 
invites applications from eligible organizations for TA or for a 
combination of TA and FA for the purpose of promoting community 
development activities.
    The program connected with this NOFA constitutes the SECA Component 
of the CDFI Program, involving direct FA and/or TA to CDFIs that 
provide loans, investments and other activities to their target 
markets. Under this SECA Component NOFA, the Fund anticipates making a 
maximum TA award in the amount of $50,000 to any one applicant seeking 
TA only. However, the Fund, in its sole discretion, reserves the right 
to award amounts in excess of the anticipated maximum amount of TA if 
the Fund deems it appropriate. Also, under the SECA Component, the Fund 
anticipates making a maximum FA award in the amount of $150,000. 
Together with the $50,000 maximum TA award, the maximum award available 
to any one applicant seeking FA and TA will be $200,000. Under the SECA 
Component, applicants seeking FA must also request TA.
    Previous awardees of FA under the CDFI Program (i.e., those that 
were selected by the Fund prior to submission of the SECA Component 
application to receive FA) are eligible to apply for TA only under this 
NOFA. Any previous awardee of TA only under the CDFI Program, any 
entity not previously selected for an award under the CDFI Program, or 
any previous awardee under another Fund program is eligible to apply 
for TA, or a combination of FA and TA, under this NOFA, provided it 
also meets the definition of a ``small and emerging'' CDFI, as defined 
in this NOFA. Previous Fund awardees must be aware that success in a 
previous funding round should not be considered indicative of success 
under this NOFA. In addition, organizations will not be penalized for 
having previously received awards from the Fund, except as mentioned 
above and to the following extent:
    (1) The Fund is generally prohibited from obligating more than $5 
million in assistance, in the aggregate, under the CDFI Program, to any 
one organization and/or its subsidiaries and affiliates during any 
three year period; and
    (2) The Fund reserves the right not to make an award to a previous 
CDFI Program awardee that has failed to meet its performance goals, 
financial soundness covenants (if applicable), and/or certain other 
terms, conditions or requirements contained in previously executed 
assistance agreement(s).

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II. Eligibility

    The Act and the interim rule specify the eligibility requirements 
that each applicant must meet in order to be eligible to apply for 
assistance under this SECA 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. Also, an entity must 
meet, or propose to meet, CDFI certification eligibility requirements.
    If the applicant does not meet the CDFI eligibility requirements, 
the application shall include a realistic plan for the applicant to 
meet the CDFI certification criteria by March 27, 2003 (the deadline 
may be extended at the sole discretion of the Fund). In no event will 
the Fund disburse FA to the applicant until the applicant is certified 
as a CDFI. The Fund, in its sole discretion, may disburse TA to an 
applicant prior to its certification as a CDFI in circumstances when, 
in the judgment of the fund, said TA will help the applicant meet a 
certification requirement(s). Further details regarding eligibility and 
other program requirements are found in the application packet.
    In general, to be certified, a CDFI and its affiliates must 
collectively have a primary mission of promoting community development. 
In addition, the applicant organization must: provide loans 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 and its affiliates must collectively meet all 
eligibility requirements. If an applicant is a subsidiary of an insured 
depository institution, the insured depository institution and all of 
its subsidiaries must collectively meet all of the eligibility 
requirements.
    In addition to the above, there are other eligibility factors for 
applicants seeking FA (and TA) under the SECA Component. Applicants for 
FA and TA (as opposed to TA only under the SECA Component) must be 
``small and emerging'' entities. With respect to an entity that is not 
a Depository Institution Holding Company or an Insured Depository 
Institution, a ``small and emerging'' entity is one that (i) possesses 
total assets of $5 million or less as of the last day of its most 
recent fiscal year that ended prior to March 1, 2001 and (ii) prior to 
the date of application for SECA Component funds, has never been 
selected to receive FA under the CDFI Program.
    An applicant that is a Depository Institution Holding Company or an 
Insured Depository Institution will be considered a ``small and 
emerging'' entity if it (i) prior to the date of application for SECA 
Component funds, has never been selected to receive FA under the CDFI 
Program and (ii) received its original charter from the appropriate 
regulatory agency no more than three years prior to the date of this 
NOFA. For purposes of this NOFA, the Fund will not consider the asset 
size of a Depository Institution Holding Company or Insured Depository 
Institution in evaluating whether such an entity is ``small and 
emerging.''

III. Types of Assistance

    An applicant under this NOFA may submit an application for a TA 
grant or for both FA and TA. FA may be provided in the form of an 
equity investment (including, in the case of certain insured credit 
unions, secondary capital accounts), grant, loan, deposit, credit union 
shares, or any combination thereof. Applicants for FA shall indicate 
the dollar amount, form, and 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 TA or both FA 
and TA, must submit the materials described in the application form.

V. Matching Funds

    Applicants seeking FA under 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 FA provided by the Fund (matching 
funds are not required for TA). Matching funds must be at least 
comparable in form and value to the FA provided by the Fund. Non-
Federal funds obtained or legally committed on or after January 1, 
1999, and before December 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 December 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 aforementioned matching funds requirement.

VI. Evaluation

    Applications received 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 applications according to the criteria, 
and use the procedure described, in this NOFA.

Phase One

    In Phase One of the substantive review, each Fund reader will 
evaluate applications on a 100-point scale, using the following 
criteria and allocation of points:
    (a) Comprehensive Business Plan: 60 point maximum; with a minimum 
score of 30 points required to advance to Phase Two review (TA only 
applicants); or 70 point maximum, with a minimum score of 35 points 
required to advance to Phase Two review (applicants seeking TA and FA 
combined). The score for the Comprehensive Business Plan is based on a 
composite assessment of an applicant's strength and weaknesses under 
five sub-criteria for TA only applicants and six sub-criteria for those 
applicants seeking TA and FA. Scoring of the sub-criteria is weighted 
to reflect whether the 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 three years or less, as of the 
date of this NOFA (meaning, for purposes of this NOFA, having incurred 
initial operating expenses on or after November 27, 1997).
    The sub-criteria are:
    (1) Community development tract record (established organizations 
only): 10 point maximum;
    (2) Financial and operational capacity: 10 point maximum 
(established organizations); 4 point maximum (start-ups);
    (3) Capacity, skills and experience of the management team: 14 
point maximum (established organizations); and 30 point maximum (start-
ups);
    (4) Market analysis, program design and implementation plan, and 
funding sources: 14 point maximum;

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    (5) Projected activities and community development impact: 12 point 
maximum; and
    (6) Financial projections and resources: 10 point maximum (TA only 
applicants will not be evaluated under this sub-criterion).
    In the case of an applicant that has previously received TA 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, improve the quality of its products and 
services, and/or increase the volume of its activities. 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 its existing 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.
    (b) Technical Assistance Proposal (TAP): 40 point maximum; with a 
minimum score of 20 points to advance to Phase Two review (TA only 
applicants); or 30 point maximum with a 15 point minimum to advance to 
Phase Two review (applicants seeking FA and TA combined). The TAP 
provides the applicant with an opportunity to address the 
organizational improvements needed to achieve the objectives of its 
comprehensive business plan. Such assessment is accompanied by a budget 
and a TA award request. In the TAP, the applicant should describe how 
improving its organization will translate to community development 
impact, particularly within its Target Market. The budget and 
accompanying narrative will be evaluated for the eligibility of 
proposed uses of the TA award. Eligible types of TA award uses include, 
but are not limited to, the following: (1) acquiring consulting 
services; (2) paying staff salary for the limited purposes of 
completing tasks and/or fulfilling functions that are otherwise 
eligible TA award uses under this NOFA; (3) acquiring/enhancing 
technology items; and (4) acquiring training for staff or management. 
The Fund will not consider requests under this NOFA for expenses that, 
in the determination of the Fund, are deemed to be ongoing operating 
expenses rather than non-recurring expenses. The Fund will consider 
requests for use of TA to pay for staff salary only when the applicant 
demonstrates and represents that: the proposed staff time to be paid 
for by the TA will be used for, generally speaking, a non-recurring 
activity that will build the applicant's capacity to achieve its 
objectives as set forth in its Comprehensive Business Plan; the 
proposed capacity-building activity would otherwise be contracted to a 
consultant or not be undertaken; and the staff person assigned to the 
proposed task has the competence to successfully complete the activity.
    This limited use of TA may cover only that portion of a staff 
person(s) salary that represents the time that staff person(s) spends 
on the identified capacity-building activities, but must not exceed 50% 
of said salary for a period not to exceed 24 months. For example, it 
may be an eligible use of a TA grant to pay the salary of staff 
assigned the task of updating a market analysis or designing 
underwriting criteria for a new loan product, when the market analysis 
or the loan product is critical to achieving the objectives of the 
Comprehensive Business Plan. A TA award may not be used to assist an 
awardee to prepare an application for funding to the Fund or any other 
source.

Phase Two

    Once the initial substantive evaluation process is complete, the 
Fund will determine which applications will receive further 
consideration for funding. The Fund will make that determination 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(s) 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 may be required 
to submit additional clarifying information about their application in 
order to assist the Fund with its final evaluation. After conducting 
such site visit(s) and/or telephone interview(s), the Fund reviewer 
will evaluate applications in accordance with the criteria outlined 
above and will prepare a recommendation memorandum regarding the type, 
uses and amount, if any, of assistance that should be provided to the 
applicant.
    The Fund reserves the right, in its sole discretion, to use a 
review panel comprised of Fund staff to consider each Fund reviewer's 
recommendation memorandum and make a final recommendation to the Fund's 
selecting official. The Fund's selecting official will consider the 
panel's recommendation, if applicable, and the reviewer's 
recommendation memorandum in order to make the final funding decision. 
In making the funding decision, the Fund's selecting official also may 
consider the institutional diversity and geographic diversity of 
applicants (e.g., selecting 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 several awards).
    Further, the Fund's selecting official will make a final funding 
determination based on the applicant's file, including, without 
limitation, recommendations of the Phase One reader(s), the Phase Two 
reviewer, the panel, if applicable, 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. In the case of recommendations for TA awards over $50,000, 
the Fund will seek to ensure that there is a likelihood of significant 
community development impact resulting from such awards.
    The Fund reserves the right to change these evaluation procedures 
if the Fund deems it appropriate.

V. Waiver

    The CDFI Program Regulations at 12 CFR Secs. 1805.504(d)(4)(i)(A) 
and 1805.504(d)(4)(i)(B) provide that an applicant that is an Insured 
Credit Union proposing to meet all or a portion of its matching funds 
requirements by using retained earnings that have been accumulated 
since its inception must increase its member and/or non-member shares 
by an amount that is at least equal to four times the amount of 
retained earnings that is committed as matching funds within 24 months 
from September 30 of the calendar year in which the applicable 
application deadline falls. For purposes of this NOFA, the Fund is 
waiving said four-fold requirement and will instead require that such 
an Insured Credit Union applicant must increase its member and/or non-
member shares by an amount that is at least equal to two times the 
amount of retained earnings that is being used as matching funds by 
September 30, 2003. The Fund believes that changing this requirement, 
for purposes of the SECA Component NOFA, from a four-fold to a two-fold 
requirement is an appropriate accommodation for entities that are 
``small and emerging.''

VI. Information Sessions

    In connection with this NOFA, the Fund will conduct Information 
Sessions to disseminate information to organizations contemplating 
applying for, and other organizations interested in learning about, the 
SECA Component of the CDFI Program. Registration is

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required. The Fund will conduct 13 in-person Information Sessions, 
beginning January 4, 2001, as follows: Baltimore, MD, January 4, 2001; 
Manchester, NH, January 5, 2001; Seattle, WA, January 8, 2001; Casper, 
WY, January 9, 2001; Chicago, IL, January 10, 2001; Los Angeles, CA, 
January 9, 2001; Nashville, TN, January 11, 2001; Reno, NV, January 11, 
2001; Phoenix, AZ, January 12, 2001; Kansas City, MO, January 16, 2001; 
Dallas, TX, January 17, 2001; Jacksonville, FL, January 18, 2001; and 
Jersey City, NJ (New York City), January 19, 2001.
    In addition to the in-person sessions listed above, the Fund will 
broadcast an Information Session using interactive video-
teleconferencing technology on January 23, 2001 from 1 p.m. to 4 p.m. 
EST. Registration is required. 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 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/St. Paul, MN; Nashville, TN; New Orleans, 
LA; New York, NY; Newark, NJ; Oklahoma City, OK; Omaha, NE; Orlando, 
FL; Philadelphia, PA; Phonix, 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.
    Additional information sessions targeting specific locations and/or 
populations may be added to this list; please visit the Fund's web site 
for further information.
    For more information, or to register for an Information Session, 
please contact the Fund at (202) 622-8662 or visit the Fund's web site 
at http://www.treas.gov/cdfi.

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

    Dated: November 21, 2000.
Maurice A. Jones,
Director, Community Development Financial Institutions Fund.
[FR Doc. 00-30154 Filed 11-24-00; 8:45 am]
BILLING CODE 4810-70-7