[Federal Register Volume 68, Number 154 (Monday, August 11, 2003)]
[Notices]
[Pages 47635-47636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20337]


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DEPARTMENT OF THE TREASURY


Community Development Financial Institutions Fund; Comment 
Request on Performance Rating System

ACTION: Notice and request for comments.

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SUMMARY: Currently, the Community Development Financial Institutions 
Fund (the ``Fund''), within the Department of the Treasury, is 
soliciting comments on the indicators it will use to measure a 
community development financial institutions' performance in four 
areas: Community development impact, financial strength, portfolio 
quality, and management.

DATES: Written comments should be received on or before October 10, 
2003, to be assured of consideration.

ADDRESSES: Address all comments to: Donna Fabiani, Manager for 
Financial Strategies and Research, Community Development Financial 
Institutions Fund, U.S. Department of the Treasury, 601 13th Street, 
NW., Suite 200 South, Washington, DC 20005, [email protected], 
or fax (202) 622-3569.

FOR FURTHER INFORMATION CONTACT: Donna Fabiani, Manager for Financial 
Strategies and Research, Community Development Financial Institutions 
Fund, U.S. Department of the Treasury, 601 13th Street, NW., Suite 200 
South, Washington, DC 20005, [email protected], or fax (202) 
622-3569.

SUPPLEMENTARY INFORMATION: 
    Title: PLUM: CDFI Performance Rating System.
    Abstract: The Fund's mission is to expand the capacity of financial 
institutions to provide credit, capital and financial services to 
underserved populations and communities in the U.S. The Fund's 
strategic goal is to improve the economic conditions of underserved 
communities by providing capital and technical assistance to community 
development financial institutions (``CDFIs''), capital to insured 
depository institutions, and tax credit allocations to community 
development entities (``CDEs''), which provide credit, capital, 
financial services, and development services to these markets. The Fund 
certifies entities as CDFIs and CDEs.
    The Fund has over three hundred CDFIs in its CDFI Program 
investment portfolio. To better manage this portfolio and to better 
target its limited resources, the Fund is developing a performance 
rating system that will rank CDFIs according to their overall financial 
strength and their potential for creating community development impact. 
The PLUM rating system will assess a CDFI's performance relative to 
that of its peers. Each CDFI will be scored in four components: 
Performance effectiveness (i.e., community development impact); 
Leverage, liquidity and solvency; Underwriting; and Management. These 
four component scores will then be aggregated into a single PLUM 
rating.
    The Fund plans to use PLUM to monitor the Fund's portfolio of CDFI 
awardees, recognize and communicate best practices for community 
development finance, underwrite CDFIs, and target the Fund's technical 
resources to CDFIs that need to improve their performance. PLUM can be 
a valuable tool for CDFIs. CDFIs can use PLUM to conduct self-
assessments and improve their performance, compare their performance to 
their peers and industry standards, and identify best practices to 
strive for over time.
    The Fund is making major investments in technology to collect and 
store the data needed for PLUM analyses. PLUM analyses for non-
regulated institutions will be based on data collected through the 
Community Investment Intelligence System (CIIS), the Fund's new data 
collection system. PLUM analyses for regulated institutions will be 
based on their CAMEL rating for the ``L,'' ``U,'' and ``M'' components 
(provided the Fund has access to the CAMEL rating), as well as 
community development impact data collected through CIIS. CIIS will 
collect and store CDFIs' transaction-level and institution-level data. 
The system is being designed to communicate, where possible, with the 
technology CDFIs currently use, thereby facilitating the transfer of 
large volumes of data to the Fund. The Fund's contractor, E F Kearney, 
will work with CDFIs in the system design phase with the goal of 
developing a sophisticated yet user-friendly web-based data 
transmission process. The Fund expects to implement CIIS in December 
2003.
    To view the proposed PLUM indicators, visit the Fund's Web site at 
www.cdfifund.gov and click on ``CDFI Fund seeking comments on PLUM.''
    Request for Comments: Comments submitted in response to this notice 
will

[[Page 47636]]

become a matter of public record. Comments are invited on all aspects 
of PLUM, but commentators may wish to focus particular attention on: 
(a) The appropriateness of the indicators for measuring a CDFI's 
community development impact, financial condition, portfolio quality, 
and management capacity; (b) other indicators that may better measure 
CDFI performance; (c) the Fund's use of PLUM to monitor its portfolio 
of CDFI awardees; (d) the Fund's use of PLUM in underwriting; (e) the 
ability of the Fund to access CAMEL ratings for regulated institutions; 
(f) the number of peer groups needed to have meaningful peer analysis 
in the diverse community development field; (g) the number of years of 
data needed for reliable peer group analysis; (h) awardee and external 
audience's access to PLUM scores (i.e., should the Fund publicly share 
PLUM scores); and (i) the frequency with which the Fund should 
calculate PLUM scores for each CDFI.

    Authority: 12 U.S.C. 4703, 4703 note, 4707, 4710, 4714, 4717; 31 
U.S.C. 321; and 12 CFR part 1805.


    Dated: August 1, 2003.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 03-20337 Filed 8-8-03; 8:45 am]
BILLING CODE 4810-70-P