[Federal Register Volume 78, Number 115 (Friday, June 14, 2013)]
[Notices]
[Pages 36029-36034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14157]



[[Page 36029]]

-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


CDFI Bond Guarantee Program

AGENCY: Community Development Financial Institutions Fund, U.S. 
Department of the Treasury.

ACTION: Notice of Request for Proposals for Master Servicer/Trustee.

-----------------------------------------------------------------------

SUMMARY: The Community Development Financial Institutions (CDFI) Fund, 
a wholly owned government corporation within the U.S. Department of the 
Treasury, is seeking proposals from entities interested in serving as 
the Master Servicer/Trustee for the CDFI Bond Guarantee Program, which 
was authorized under the Small Business Jobs Act of 2010 (Pub. L. 111-
240; 12 U.S.C. 4713a) (the Act). This Notice of Request for Proposals 
describes the duties of the Master Servicer/Trustee, the criteria to be 
used to select the Master Servicer/Trustee, the selection process, and 
how to submit proposals.

DATES: Proposals to become the Master Servicer/Trustee must be received 
by the CDFI Fund no later than 5:00 p.m. ET on July 1, 2013.

FOR FURTHER INFORMATION CONTACT: Lisa M. Jones, Program Manager, CDFI 
Bond Guarantee Program, by mail to the CDFI Fund, U.S. Department of 
the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220; by 
email to [email protected]; or by facsimile at (202) 508-0090 (this is 
not a toll free number). Information regarding the CDFI Fund and the 
CDFI Bond Guarantee Program may be downloaded from the CDFI Fund's Web 
site at http://www.cdfifund.gov.

SUPPLEMENTARY INFORMATION:

I. General

A. CDFI Bond Guarantee Program

    1. Purpose; program summary. The purpose of the CDFI Bond Guarantee 
Program is to support CDFI lending by providing Guarantees for Bonds 
issued for Eligible Community or Economic Development Purposes, as 
authorized by section 1134 of the Act. Pursuant to the Act, the 
Guarantor will provide a Guarantee for the repayment of the full amount 
of the Verifiable Principal, Interest, and Call Premium of the Bonds 
issued by Qualified Issuers as part of a Bond Issue. Bonds will be used 
to finance Bond Loans to Eligible CDFIs for Eligible Purposes for a 
period not to exceed 30 years. The Bonds will support CDFI lending in 
Investment Areas by providing a source of low-cost, long-term capital 
to CDFIs.
    2. Additional reference documents. In addition to this Notice, the 
CDFI Fund encourages interested parties to review the following 
documents, which can be found on the CDFI Bond Guarantee Program page 
of the CDFI Fund's Web site at http://www.cdfifund.gov:
    (a) CDFI Bond Guarantee Program Regulations. The interim rule that 
governs the CDFI Bond Guarantee Program was published on February 5, 
2013 (78 FR 8296; 12 CFR part 1808) (the Regulations) and provides the 
regulatory requirements and parameters for the CDFI Bond Guarantee 
Program including, among others, general provisions, eligibility, 
eligible activities, applications for Guarantee and Qualified Issuer, 
evaluation and selection, and terms and conditions of Guarantee. In 
addition to the Regulations, the CDFI Fund has provided a document that 
summarizes certain program terms and conditions, which may be found on 
the CDFI Fund's Web site at http://www.cdfifund.gov.
    (b) Bond Trust Indenture. The CDFI Fund will publish on its Web 
site, either simultaneously with this Notice or shortly thereafter, a 
template for the Bond Trust Indenture, the agreement that will govern 
the relationship between the Master Servicer/Trustee and the respective 
Qualified Issuer. The Bond Trust Indenture sets forth the roles, 
responsibilities and functions of the Master Servicer/Trustee under the 
CDFI Bond Guarantee Program. This form document may be updated 
periodically, as needed, and will be tailored to the Master Service/
Trustee and Qualified Issuer at the time of Bond closing. Accordingly, 
this form document should not be relied on, but instead is provided for 
illustrative purposes.
    (c) Notice of Guarantee Availability (NOGA). The CDFI Fund will 
publish the NOGA for FY 2013 Guarantee authority, notifying the public 
that: (i) Parties interested in being approved as Qualified Issuers can 
submit Qualified Issuer Applications and (ii) Qualified Issuers can 
submit Guarantee Applications to be approved for a Guarantee. The NOGA 
explains application submission and evaluation requirements and 
processes, certain Guarantee administration information and agency 
contacts.
    (d) Federal credit documents. Interested parties should review the 
Office of Management and Budget (OMB) Circular A-129 (Policies for 
Federal Credit Programs and Non-Tax Receivables) in order to fully 
understand credit review requirements that pertain to the CDFI Bond 
Guarantee Program. In addition, interested parties should review the 
Federal Credit Supplement, published annually by OMB.
    (e) Program materials. Interested parties should review the 
Qualified Issuer Application and Guarantee Application, found on the 
CDFI Fund's Web site.
    (f) Legal documents. Interested parties should review CDFI Bond 
Guarantee Program template documents including, but not limited to, the 
Agreement to Guarantee and the Bond Loan Agreement, which will be 
posted on the CDFI Fund's Web site. These form documents may be updated 
periodically, as needed, and will be tailored, as appropriate, to the 
particular terms and conditions of a Guarantee. Accordingly, these form 
documents should not be relied on, but instead are provided for 
illustrative purposes.
    (g) Frequently Asked Questions. The CDFI Fund will periodically 
post on its Web site responses to questions that have been asked by 
parties interested in learning more about the CDFI Bond Guarantee 
Program.
    3. Definitions. Capitalized terms used herein and not defined 
elsewhere are defined in section 1808.102 of the Regulations.

II. Roles and Responsibilities of Master Servicer/Trustee

A. General

    1. There will be one Master Servicer/Trustee for the CDFI Bond 
Guarantee Program.
    2. The Master Servicer/Trustee will be a third-party trust company 
or financial institution that is in the business of servicing bonds and 
loans that are similar to the Bonds and Bond Loans, has been deemed 
acceptable by the CDFI Fund, and whose duties will include, among 
others, exercising fiduciary powers to enforce the terms of the Bonds 
and Bond Loans pursuant to the Bond Trust Indenture entered into by and 
between the Master Servicer/Trustee and the respective Qualified 
Issuer, overseeing the activities of the Servicer, and facilitating 
Bond principal and interest payments to the Federal Financing Bank, as 
Bond Purchaser.
    3. Accordingly, the duties of the Master Servicer/Trustee will 
include loan administration, servicing, and monitoring of the Bond 
Issue and the corresponding Bonds and Bond Loans with respect to the 
Qualified Issuer's repayment obligations to the Bond Purchaser and the 
terms of the Agreement to Guarantee and the Bond Loan Agreement.
    4. The Master Servicer/Trustee will also be charged with all 
customary

[[Page 36030]]

duties required of a Paying Agent, Collateral Agent, and Custodian (as 
those terms are customarily used and which duties may be enumerated in 
the Bond Trust Indenture).
    5. When necessary, the Master Servicer/Trustee will act as Special 
Servicer, performing certain administrative duties related to the 
restructuring of Bond Loans that are in or about to enter into an event 
of default (i.e., distressed asset management or resolution), as well 
as initiating foreclosure action, appointing a receiver, and enforcing 
deficiency judgments. As described below, the Department of the 
Treasury will have certain decision-making authority with respect to 
the Qualified Issuer's instructions to the Master Servicer/Trustee as 
to the best course of action when multiple remedies or options are 
available (i.e., the decision as to whether to restructure a Bond Loan 
or initiate foreclosure actions).
    6. The Master Servicer/Trustee's administrative fees and expenses 
will be paid by each Eligible CDFI in accordance with the Bond Trust 
Indenture and related documents.
    7. The Master Servicer/Trustee's roles and responsibilities will be 
enumerated and governed by the Bond Trust Indenture entered into with 
each Qualified Issuer that receives a Guarantee through the CDFI Bond 
Guarantee Program.
    8. The Master Servicer/Trustee will not be considered to have 
entered into a contract or binding agreement with the Federal 
Government under the Federal Acquisition Regulations or otherwise. The 
Master Servicer/Trustee will not be an agent of the Federal Government. 
Instead, its contractual relationships will be with each Qualified 
Issuer that receives a Guarantee under the CDFI Bond Guarantee Program. 
Each Qualified Issuer that receives a Guarantee will have entered into 
an Agreement to Guarantee with the Secretary of the Treasury, which 
describes terms and conditions that must be met in order to receive the 
Guarantee; a condition of such Agreement to Guarantee will be that the 
Qualified Issuer must enter into the Bond Trust Indenture with the 
Master Servicer/Trustee to undertake certain responsibilities under the 
CDFI Bond Guarantee Program.
    9. Accordingly, no Federal funds will be appropriated, obligated or 
made available by the U.S. Department of the Treasury under this Notice 
or the Bond Trust Indenture. The Department of the Treasury will have 
no legal liability for any payment purposes under this Notice or the 
Bond Trust Indenture.

B. Master Servicer/Trustee Duties

    1. Pursuant to the specific terms of the Bond Trust Indenture 
entered into with each Qualified Issuer that receives a Guarantee, the 
Master Servicer/Trustee will be responsible for performing duties 
including, but not limited to:
    (a) The fiduciary power to enforce the terms of Bonds and the Bond 
Loans pursuant to the Bond Trust Indenture;
    (b) Establishing and managing the funds and accounts set forth in 
the Regulations;
    (c) Providing such reports as required;
    (d) Overseeing the activities of Servicers and managing loan 
administration;
    (e) Servicing and monitoring of Bond Issues with respect to 
repayment obligations to the Bond Purchaser and the terms of the 
Agreement to Guarantee;
    (f) Tracking the movement of funds between the accounts of the 
Master Servicer/Trustee and all Servicers;
    (g) Ensuring orderly receipt of the monthly remittance and 
servicing reports of the Servicers;
    (h) Monitoring collection and foreclosure actions;
    (i) Aggregating the reporting and distribution of funds to the 
Qualified Issuer, the CDFI Fund, and the Bond Purchaser, as necessary;
    (j) Removing and replacing Servicers, as necessary;
    (k) Performing systematic and timely reporting of Bond Loan 
performance compiled from Servicers' reports, and providing such 
reports as required in the Regulations;
    (l) Ensuring proper distribution of funds to Eligible CDFIs, 
servicing the Bonds, and repayment to the Bondholder; and
    (m) All other duties and related services that are customarily 
expected of a Master Servicer/Trustee, and as may be required by the 
CDFI Fund.
    2. Other duties and related services. Other duties and related 
services that will be required of the Master Servicer/Trustee include, 
but are not limited to, loan administration and the roles of Special 
Servicer, Paying Agent, Collateral Agent, and Custodian (as those terms 
are customarily used and which duties may be enumerated in the Bond 
Trust Indenture), summarized as follows:
    (a) Loan administration. At the CDFI Fund's request, and to the 
extent permitted by the applicable transaction documents, the Master 
Servicer/Trustee shall:
    (1) Promptly report to the CDFI Fund: (A) Any failure by any 
Eligible CDFI to comply with its obligations or covenants, including 
those related to collateral; (B) to the extent a Secondary Loan is 
financed on a corporate finance basis (i.e., through a Credit 
Enhancement), any downgrade in the credit rating of the Eligible CDFI 
or any third-party guarantor by either Standard & Poor's Financial 
Services LLC, Moody's Investors Service or Fitch Ratings Ltd.; (C) any 
material change in the value of any project collateral, based on 
notices and updates provided by the Qualified Issuer or Eligible CDFIs; 
(D) problems or irregularities concerning any Secondary Loan, based on 
information obtained from the Qualified Issuers, Eligible CDFIs or in 
the course of any site visits conducted on behalf of the CDFI Fund; or 
(E) the inability of any Eligible CDFI to make payment on the Bond Loan 
or other debt obligation;
    (2) Provide executive level briefings and decision support on a 
quarterly basis or more frequently in special situations that may 
require CDFI Fund or Master Servicer/Trustee intervention;
    (3) Report findings of loan monitoring activities acceptable for 
utilization by the CDFI Fund for the purpose of credit subsidy re-
estimates for Bond Issues, including all necessary reporting under the 
Federal Credit Reform Act of 1990, as amended;
    (4) Maintain a comprehensive reporting format to track and report 
fees, extraordinary costs and expenses due and collected on individual 
projects (findings to be summarized in the monthly payment status and 
delinquency report);
    (5) Perform reviews of the reports provided by Eligible CDFIs or 
Qualified Issuers to ensure that such reports comply with standardized 
information reporting requirements for Eligible CDFIs and required 
affirmative or negative covenants and specific reporting requirements 
in any related loan agreements (summary of findings to be provided in 
the monthly servicing oversight report);
    (6) Promptly notify the CDFI Fund if it becomes aware of any 
reporting problems; and
    (7) Perform such other loan administration duties as set forth in 
the Bond Trust Indenture.
    (b) Special Servicer. The following Special Servicer duties (i.e., 
distressed asset management or resolution duties) shall be performed by 
the Master Servicer/Trustee in accordance with the Bond Trust 
Indenture:
    (1) Negotiate the restructuring of Bond Loans that are in or about 
to enter into an event of default;
    (2) Initiate foreclosure action and appointing a receiver;
    (3) Enforce deficiency judgments;

[[Page 36031]]

    (4) Assist and advise CDFI Fund in connection with the exercise of 
any of its remedies (e.g., restructuring of Bonds and collateral terms 
and conditions, continued operation of the project, foreclosure and the 
liquidation of the collateral), including intervening in payment 
reconciliation efforts, assisting in appraisal and liquidation of 
collateral, identifying potential buyers of the assets and analyzing 
bids;
    (5) Oversee the collection and monitoring by Qualified Issuers of 
all scheduled and actual payment activities of each Bond (findings to 
be reported to CDFI Fund in the payment status and delinquency sub-
report contained in the monthly servicing oversight report, such sub-
report shall provide information as to past principal and interest 
payments, the timing of future principal and interest payments, and 
current loan balances for each project);
    (6) With CDFI Fund direction, file any claims or take any action or 
institute any proceedings that the Master Servicer/Trustee may deem 
necessary or desirable for the collection of any of the collateral or 
otherwise to accomplish the purposes of any Bond documents;
    (7) Exercise, in respect of the collateral, in addition to any 
other rights or remedies available to it and to the extent not in 
violation of applicable law, all the rights and remedies of a secured 
party under the Uniform Commercial Code (UCC);
    (8) If requested by the CDFI Fund, assist and advise the CDFI Fund 
in connection with the liquidation of the collateral or any part 
thereof, including selecting specialists to assist in appraisal and 
liquidation of collateral, recommending liquidation strategies, 
identifying potential buyers of the assets and analyzing bids; ask for, 
demand, collect, sue for, recover; receive and give acquittance and 
receipts for moneys due and to become due under or in respect of any 
collateral;
    (9) Occupy any premises where the collateral or any part thereof is 
assembled or located;
    (10) Receive, endorse and collect any drafts or other instruments, 
documents and chattel paper in connection with the preceding clauses;
    (11) Appear at hearings related to any bankruptcy proceedings as 
requested by CDFI Fund and provide testimony as necessary; and
    (12) Perform such other Special Servicer duties as may be set forth 
in the Bond Trust Indenture.
    (c) Paying Agent. The Master Servicer/Trustee shall perform or 
contract to perform duties customarily expected of a Paying Agent as 
such term is customarily used and which duties are enumerated in the 
Bond Trust Indenture.
    (d) Collateral Agent. Any Eligible CDFI receiving a Bond Loan must 
grant a security interest in each Eligible CDFI's collateral on behalf 
of the Guarantor. The Master Servicer/Trustee, as a secured party under 
the UCC and other associated security documents, shall take all 
necessary administrative and enforcement actions with respect to the 
collateral on behalf of the Guarantor, if applicable, including, among 
others:
    (1) Holding and managing, as appropriate, all accounts established 
by the Eligible CDFI for cash reserves and other cash receipts pursuant 
to the terms of the Bond Documents and Bond Loans documents;
    (2) Monitoring Eligible CDFI compliance with covenants and 
agreements relating to collateral;
    (3) Monitoring collateral-related regulatory and UCC filings to 
ensure that continuation statements, extensions or renewals, as 
applicable, are timely filed;
    (4) Ensuring that collateral provided as security for any Bond Loan 
is properly maintained for the benefit of the Guarantor, if applicable, 
as the secured parties;
    (5) Overseeing the Qualified Issuers' obligations to undertake 
those actions necessary to perfect and maintain liens, as applicable, 
on assets that are pledged as collateral for Bond Loans; and
    (6) Performing such other Collateral Agent duties as may be set 
forth in the Bond Trust Indenture.

III. Submission of Proposals

    A. Any organization wishing to propose to serve as the Master 
Servicer/Trustee (an Offeror) must submit a proposal to the CDFI Fund 
in the following format: No more than 40 single-sided pages; double 
spaced; 12 font size; Arial, Calibri, or Times New Roman font. The 
Offeror may choose how to allocate the 40 pages of narrative to address 
the evaluation criteria listed below. Organizations may also submit an 
appendix of no more than 25 pages of resumes, charts, graphs, and other 
illustrative materials. Organizations must submit: One (1) electronic 
copy of the proposal materials in Microsoft Word or Adobe PDF format by 
email to [email protected] and (ii) five (5) printed, color copies of 
the proposal materials either: (i) By mail to the CDFI Fund, U.S. 
Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, 
DC 20220, or (ii) by commercial carrier to the attention of Lisa Jones, 
Program Manager, CDFI Bond Guarantee Program, CDFI Fund, 1801 L Street 
NW., 6th Floor, Washington, DC 20035.
    B. The last day to contact the CDFI Fund with questions about this 
Notice is 5:00 p.m. ET on June 28, 2013.
    C. If sent by mail, proposals must be postmarked no later than July 
1, 2013. If delivered by commercial carrier, proposals must be received 
by the CDFI Fund by no later than 5:00 p.m. ET on July 1, 2013.
    D. The CDFI Fund will not accept a proposal, or any portion of a 
proposal, delivered after the deadline.
    E. The CDFI Fund will not grant exceptions or waivers to the 
requirements of this Notice.
    F. Any proposal that is deemed ineligible or rejected will not be 
returned to the Offeror.
    G. Proposals should be organized to respond to the criteria for 
completeness, minimum requirements, and substantive review indicated in 
section IV.B., directly below titled ``Minimum requirements (proposal 
outline).''

IV. Evaluation

    A. Completeness and Minimum Requirements Review. The CDFI Fund will 
review each proposal to determine whether it is complete and the 
Offeror meets the minimum requirements described in this Notice. An 
incomplete proposal or one that does not meet minimum requirements will 
be rejected.
    B. Minimum requirements (proposal outline). The Offeror must meet 
or exceed the following minimum requirements in order to be considered 
for the role of Master Servicer/Trustee:
    1. The Offeror must demonstrate financial strength, stability, 
durability and liquidity as reflected in its corporate credit ratings 
and ratings history, as available. The Offeror must include its credit 
rating from a nationally recognized rating agency and net capital in 
its proposal. The Offeror must exhibit stability, durability, and 
adequate liquidity sufficient to withstand adverse market conditions 
for a multiyear period. The determination of financial condition shall 
be based on a review of audited financial statements, history of 
profitability and sources, levels and uses of capital and liquidity. If 
the Offeror is an affiliate or subsidiary of another entity, the 
assessment of financial condition should consider the financial 
strength of such affiliates. In cases where the Offeror exhibits 
financial weakness and is at risk of experiencing insolvency in the 
next two years, the Offeror will be deemed ineligible to perform Master 
Servicer/Trustee functions;
    2. The Offeror (and any participating affiliate or subcontractor) 
must maintain

[[Page 36032]]

a minimum Long Term Corporate Unsecured Debt rating of ``A'' or 
equivalent from any two (2) nationally recognized statistical rating 
agencies;
    3. The Offeror (and any participating affiliate or subcontractor) 
must have a capital surplus of $10 billion as of December 31, 2012;
    4. The Offeror's Statement of Standards for Attestation Engagements 
No. 16 (SSAE 16) must demonstrate that its established internal 
controls include multiple levels of quality control, regulatory 
compliance and risk management oversight;
    5. The Offeror must have insurance to cover risks inherent in 
managing a loan portfolio and in serving as a Collateral Agent for loan 
portfolio with at least 300 loans and a portfolio value of $10 billion;
    6. The Offeror (and any participating affiliate or subcontractor) 
must currently have computer-based loan servicing, collateral tracking 
and management systems with supporting loan servicing, tracking and 
management policies and procedures sufficient to meet the requirements 
of the proposed responsibilities in Section II (Roles and 
responsibilities of the Master Servicer/Trustee) of this Notice, 
including a loan tracking system;
    7. The Offeror must demonstrate prior experience as a master 
servicer for at least ten (10) bonds or debt securities with original 
principal balance of over $100 million each;
    8. The Offeror or participating affiliate must demonstrate a 
history of Sarbanes-Oxley Act compliance;
    9. The Offeror must demonstrate transactional restructuring 
experience as a Special Servicer with a minimum of 25 different 
restructuring transactions where the value of each transaction is a 
minimum of $10 million;
    10. The Offeror must demonstrate that it (and any participating 
affiliate or subcontractor) is a State or Federally chartered financial 
institution having deposit-taking capabilities including, without 
limitation, the ability to hold and segregate funds designated for 
project accounts; and
    11. The Offeror must demonstrate prior experience providing 
comparable services for a minimum of three (3) different governmental 
entities or financial stability programs.
    C. Substantive Review.
    1. If the Offeror has submitted a complete proposal that meets the 
minimum requirements, the CDFI Fund will conduct a substantive review 
in accordance with the criteria and procedures described in the 
Regulations and this Notice. The CDFI Fund reserves the right to 
contact the Offeror in person, or by telephone, email, or mail for the 
sole purpose of clarifying or confirming information. If contacted, the 
Offeror must respond within the CDFI Fund's time parameters or its 
proposal will be rejected. The CDFI Fund will consider the best value 
proposed by the Offeror through an equal consideration of technical 
capabilities, past performance, and proposed fees/cost structure.
    2. The CDFI Fund will rank the proposals quantitatively after 
giving each criterion a score of 1 to 10, with 1 being generally 
unfavorable and 10 being generally favorable. Highest ranking proposals 
will be considered in the context of past performance and the pricing 
proposal. When selecting the Master Servicer/Trustee, the CDFI Fund 
shall give equal consideration to the pricing proposal and technical 
qualifications of the proposing organization.
    3. The highest ranking proposals will be contacted for oral 
interviews during a time period that is selected by the CDFI Fund. 
Offerors that are contacted for interviews must ensure that their 
authorized representatives and lead management personnel who would be 
responsible for providing Master Servicer/Trustee services pursuant to 
this Notice are fully available to participate in such interviews.
    4. The CDFI Fund will make a final selection of the Master 
Servicer/Trustee upon consideration of a written record that includes 
the highest-ranking proposals and staff recommendations.
    5. The CDFI Fund expects to complete the selection process within 
approximately six (6) weeks of the date of this Notice. The table below 
demonstrates the approximate timeframe for the selection process so 
that respondents may plan their availability to respond to any 
additional communication to and with the CDFI Fund.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Proposal submission deadline............  July 1, 2013.
Review of minimum requirements..........  July 15, 2013.
Substantive review of proposals.........  July 15, 2013.
Oral interviews.........................  July 19, 2013.
Final selection decision................  July 22, 2013.
Formal announcement and completed         July 26, 2013.
 process.
------------------------------------------------------------------------

    D. Evaluation criteria. The CDFI Fund will use the following 
criteria to evaluate Offeror proposals which are eligible for 
substantive review and meet the completeness and minimum requirements:
    1. Technical Capabilities.
    (a) Administration, servicing, and monitoring of loans that are 
similar to Bond Loans. The Offeror must demonstrate organizational 
capacity and previous experience in administration, servicing, and 
monitoring of loans. Capacity and previous experience working with 
CDFIs and similar community development organizations will be viewed 
particularly favorably.
    (b) Financial strength and capacity. The Offeror must demonstrate 
appropriate levels of total assets, net assets (or equivalent), debt/
equity ratios, and other factors that indicate the financial 
wherewithal to perform the role of the Master Servicer/Trustee.
    (c) Managing regional or national intake, processing, or servicing 
operational systems and infrastructure of loans that are similar to 
Bond Loans. The Offeror must demonstrate regional or national capacity 
and the ability to effectively integrate activities across a wide 
geographic footprint, including both rural and urban areas.
    (d) Managing regional or national originator communication systems 
and infrastructure. The Offeror must demonstrate systems and 
infrastructure to support activities across a wide geographic 
footprint, including both rural and urban areas.
    (e) Developing and implementing training and other risk management 
strategies on a regional or national basis. The Offeror must 
demonstrate an ongoing commitment to training to ensure staff knowledge 
of company procedures, industry techniques, and regulatory 
requirements.
    (f) Organization and staffing. The Offeror must demonstrate low 
levels of employee turnover relative to industry peers, and 
organization that supports effective reporting that provides 
accountability and process efficiencies.
    (g) Restructuring, recovery, and foreclosure of loans that are 
similar to Bond Loans. The Offeror must demonstrate organizational 
capacity and previous experience in restructuring, recovery, and 
foreclosure activities. Previous experience working with CDFIs and 
similar community development organizations will be viewed particularly 
favorably.
    (h) Compliance monitoring and reporting. The Offeror must 
demonstrate systems that are efficiently integrated to avoid manual re-
handling of data and the ability to satisfy reporting requirements 
under applicable OMB Circulars.
    (i) Internal controls. The Offeror must demonstrate established 
internal controls that include multiple levels of quality control, 
regulatory compliance and risk management oversight.

[[Page 36033]]

    (j) The capacity and previous experience of the Offeror. The 
Offeror must demonstrate the ability to perform the duties listed 
directly below. Previous experience working with CDFIs and similar 
community development organizations will be viewed particularly 
favorably. The Offeror must demonstrate previous experience performing 
the following duties:
    (1) The fiduciary power to enforce the terms of Bonds and the Bond 
Loans pursuant to the Bond Trust Indenture;
    (2) Establishing and managing the funds and accounts set forth in 
the Regulations;
    (3) Providing such reports as required;
    (4) Overseeing the activities of Servicers and managing loan 
administration;
    (5) Servicing and monitoring of Bond Issues with respect to 
repayment obligations to the Bondholder and the terms of the Agreement 
to Guarantee;
    (6) Tracking the movement of funds between the accounts of the 
Master Servicer/Trustee and all Servicers;
    (7) Ensuring orderly receipt of the monthly remittance and 
servicing reports of the Servicers;
    (8) Monitoring collection and foreclosure actions;
    (9) Aggregating the reporting and distribution of funds to the 
Qualified Issuer, the CDFI Fund, and the Bondholder, as necessary;
    (10) Removing and replacing Servicers, as necessary;
    (11) Performing systematic and timely reporting of Bond Loan 
performance compiled from Servicers' reports, and providing such 
reports as required in the Regulations;
    (12) Ensuring proper distribution of funds to Eligible CDFIs, 
servicing the Bonds, and repayment to the Bondholder; and
    (13) All other duties and related services that are customarily 
expected of a Master Servicer/Trustee, and as may be required by the 
CDFI Fund.
    2. Other Proposal Content. In addition to each of the selection 
criteria described, the Offerer's proposal must include the following 
information:
    (a) A statement that the Offeror has the legal corporate authority 
to perform all of the services required of the Master Servicer/Trustee 
by the Bond Trust Indenture, the Regulations, and the Act;
    (b) Assurances that no conflicts of interest exist as of the date 
of proposal submission with regards to carrying out the 
responsibilities of the Master Servicer/Trustee, and a description of 
the review and analysis that the Offeror conducted to reach this 
conclusion; and
    (c) A description of the Offeror's approach to performing each of 
the Master Servicer/Trustee's responsibilities, which must reflect its 
review and understanding of the CDFI Bond Guarantee Program's documents 
and processes. Innovative proposals will convey the Offeror's 
understanding of Master Servicer/Trustee duties and responsibilities 
and will be favorably viewed, especially with regards to unique 
requirements of working with CDFIs or similar community development 
organizations.
    3. Past Performance. In addition to the criteria enumerated above, 
the CDFI Fund will consider the quantity and quality of demonstrated 
past performance related to the role of Master Servicer/Trustee. Past 
experience working with CDFIs or similar community development 
organizations will be viewed particularly favorably. The determination 
of appropriate past performance shall be the sole discretion of the 
CDFI Fund, which will consider the materials provided by the Offeror as 
well as any external market research performed to verify the past 
performance described in the Proposal. The CDFI Fund will also evaluate 
past performance based on the information contained in the Federal 
Awardee Performance and Integrity Information System (FAPIIS) for up to 
thirty-six (36) months preceding the issuance of this Notice. Offerors 
will receive a pass, fail or neutral rating for past performance.
    4. Pricing Proposal.
    (a) The CDFI Fund will consider the Offeror's proposed fees and 
cost structure that will be paid by Eligible CDFIs. The Master 
Servicer/Trustee cannot charge fees that exceed those set forth in its 
Proposal, unless specifically authorized by the CDFI Fund.
    (b) Offerors should propose a single combined fee for performing 
all of the duties listed in this Notice on a monthly basis. The all-in 
fee may be presented according to a methodology chosen by the Offeror, 
but the entity selected to serve as the Master Servicer/Trustee will be 
prohibited from increasing the monthly fee in excess of the methodology 
in the proposal. The proposed all-in fee and methodology must be 
appropriate to cover the costs of performing the duties entailed in 
this Notice, including those of the Special Servicer (i.e., distressed 
asset management or resolution).
    (c) The following table is an example of a possible methodology to 
present the fee in terms of a basis point percentage of the outstanding 
principle balance of each Bond Loan, starting at 1.25 basis points 
(.0125%) and subject to a maximum increase of 1/100th of a basis point 
per month.

----------------------------------------------------------------------------------------------------------------
                                                                                    Outstanding
                                                      Monthly basis points           principle       Starting
                                                                                      balance       monthly fee
----------------------------------------------------------------------------------------------------------------
Example: Month 1..............................  1.25 bps........................    $100,000,000         $12,500
Month 100.....................................  2.25 bps........................      63,000,000          14,175
----------------------------------------------------------------------------------------------------------------

V. Approval

    The CDFI Fund will make a final selection of the Master Servicer/
Trustee upon consideration of the Offeror's proposal and a written 
record that includes the highest-ranking proposals and staff 
recommendations. The CDFI Fund will notify the entity that is selected 
of such selection; however, the selection of the Master Servicer/
Trustee will not become effective until the date of the Bond Trust 
Indenture entered into with each Qualified Issuer that is receives a 
Guarantee under the CDFI Bond Guarantee Program.

VI. Rejection

    The CDFI Fund reserves the right to reject any proposal if 
information (including administrative errors) comes to the CDFI Fund's 
attention that either adversely affects the Offeror's eligibility or 
indicates fraud or mismanagement on its part. If the CDFI Fund 
determines any portion of the Offeror's proposal is incorrect in a 
material respect, the CDFI Fund reserves the right, in its sole 
discretion, to reject the proposal. The CDFI Fund reserves the right to 
change its eligibility and evaluation criteria and procedures, if the 
CDFI Fund deems it appropriate. If the changes materially affect the 
CDFI Fund's decision, the CDFI Fund will provide information about the 
changes through the CDFI Fund's Web site. The CDFI Fund's decisions are 
final: There is no right to appeal the decisions.

[[Page 36034]]

VII. Additional requirements

    A. The Bond Trust Indenture shall be subject to review by the CDFI 
Fund for the purposes of assuring that CDFI Fund is not in any way 
liable for the payment of any fees and expenses specified and for 
conformity with other applicable guidelines. The CDFI Fund or any 
appointed representative may perform inspection and acceptance of 
services to be provided under the Bond Trust Indenture.
    B. The services performed by the Master Servicer/Trustee shall be 
of the professional level and reflect expertise commensurate with 
standard commercial or industrial practice for activities of those 
required under a Bond Trust Indenture and shall be suitable for their 
intended purpose.
    C. Through its powers under the Agreement to Guarantee, the CDFI 
Fund reserves the right to inspect and test all services and 
deliverables called for, to the extent practicable at all times and 
places, during the term of the Bond Trust Indenture.
    D. In the event of rejection of any routine or ad hoc report, the 
Master Servicer/Trustee shall be notified in writing and shall have ten 
(10) working days, unless otherwise specified by CDFI Fund, from the 
date of issuance of such notification to correct the deficiencies and 
resubmit the report/deliverable. When the defects in services cannot be 
corrected by the Master Servicer/Trustee performance of resubmitting 
the report/deliverable, the CDFI Fund may require and force, through 
its powers under the Agreement to Guarantee, the Qualified Issuer to 
utilize its powers under the Bond Trust Indenture, that include taking 
the necessary action to ensure that future performance conforms to CDFI 
Fund requirements.
    E. It is understood and agreed that the Master Servicer/Trustee and 
its employees, subcontractors, and consultants:
    (1) Shall perform the services specified in the Bond Trust 
Indenture as independent contractors, not as employees or agents of the 
Federal Government;
    (2) Shall be responsible for their own management and 
administration of the work required, and bear sole responsibility for 
complying with all technical, schedule, or financial requirements or 
constraints attendant to the performance of the Bond Trust Indenture;
    (3) Shall be free from any direct or indirect supervision or 
control by any Federal Government employee; and
    (4) Shall, pursuant to the Bond Trust Indenture, comply with such 
general direction of authorized Federal Government employees as is 
necessary and appropriate to ensure accomplishment of the enumerated 
requirements and objectives.

IX. Agency Contact

    A. The CDFI Fund will respond to questions concerning this Notice 
between the hours of 9:00 a.m. and 5:00 p.m. ET, starting on the date 
that the Notice is published through one (1) business day prior to the 
proposal deadline. During the one (1) business day prior to the 
proposal deadline, the CDFI Fund will not respond to questions from 
prospective Offerors until after the proposal deadline. Applications 
and other information regarding the CDFI Fund and the CDFI Bond 
Guarantee Program may be obtained from the CDFI Fund's Web site at 
http://www.cdfifund.gov. In its discretion, the CDFI Fund may post on 
its Web site responses to questions of general applicability regarding 
this Notice.
    B. Interested parties may contact the CDFI Bond Guarantee Program 
by calling (202) 622-6355 or emailing [email protected].
    C. The CDFI Fund will use the contact information set forth in the 
Offeror's proposal to communicate. It is important, therefore, that the 
Offeror provides accurate contact information in its proposal, 
including contact names, addresses, email addresses, fax and telephone 
numbers.

X. Information Sessions and Outreach

    The CDFI Fund may conduct webinars or host information sessions for 
organizations that are considering applying to serve in the role of 
Master Servicer/Trustee. For further information, please visit the CDFI 
Fund's Web site at http://www.cdfifund.gov.

    Authority: Pub. L. 111-240, 12 U.S.C. 4713a, 12 CFR part 1808.

    Dated: June 10, 2013.
Dennis Nolan,
Deputy Director, Community Development Financial Institutions Fund.
[FR Doc. 2013-14157 Filed 6-13-13; 8:45 am]
BILLING CODE 4810-70-P