[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Rules and Regulations]
[Pages 65151-65153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25872]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund

12 CFR Part 1805


Modification of Financial Reporting Requirements for Non-Profit 
Organizations

AGENCY: Community Development Financial Institutions Fund (CDFI Fund), 
Department of the Treasury.

ACTION: Interim rule.

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SUMMARY: The mission of the Community Development Financial 
Institutions Fund (CDFI Fund) is to increase economic opportunity and 
promote community development investments for underserved populations 
in distressed communities in the United States. Its long-term vision is 
to economically empower America's underserved and distressed 
communities. The purpose of the Community Development Financial 
Institutions Program (CDFI Program) is to promote economic 
revitalization and community development through investment in and 
assistance to Community Development Financial Institutions (CDFIs). 
Under the CDFI Program, the CDFI Fund provides financial assistance in 
the form of grants, loans, equity investments and deposits to CDFIs 
selected through a merit-based application process. The CDFI Fund 
provides financial assistance to CDFIs to enhance their ability to make 
loans and investments, and to provide related services for the benefit 
of designated investment areas, targeted populations, or both. In 
addition, through the CDFI Program, the CDFI Fund provides technical 
assistance grants to CDFIs and entities that propose to become CDFIs, 
for the purpose of increasing their capacity to serve their target 
markets.
    The CDFI Fund is amending its regulations regarding the financial 
reporting requirements for non-profit organizations. The regulatory 
change requires CDFI Program awardees that are non-profit organizations 
to provide audited financial statements within 180 days after the end 
of the awardee's fiscal year end. This regulatory action conforms to 
the financial reporting requirements for non-profit awardees to the 
statutory provisions governing the CDFI Program.

DATES: Effective date: October 31, 2013. Comment due date: December 30, 
2013.

ADDRESSES: All comments concerning this interim rule should be 
addressed to the CDFI Program Manager, Community Development Financial 
Institutions Fund, Department of the Treasury, 1500 Pennsylvania Avenue 
NW., Washington DC 20220; by email to; by email to 
[email protected]; or by facsimile at (202) 453-2466.
    Electronic Submission of Comments: Interested persons are 
encouraged to submit comments electronically through the Federal 
eRulemaking Portal at http://www.regulations.gov. Electronic submission 
of comments allows the commenter maximum time to prepare and submit a 
comment, ensures timely receipt, and enables the Department to make 
them available to the public. Comments submitted electronically through 
the http://www.regulations.gov Web site can be viewed by other 
commenters and interested members of the public. Commenters should 
follow the instructions provided on that site to submit comments 
electronically.
    All properly submitted comments will be available for inspection 
and downloading at http://www.regulations.gov. In general, comments 
received, including attachments and other supporting materials, are 
part of the public record and are available to the public. Do not 
submit any information in your comment or supporting materials that you 
consider confidential or inappropriate for public disclosure.

FOR FURTHER INFORMATION CONTACT: Adam Martinez, Program Manager, CDFI 
Program, by mail to the CDFI Fund, Department of the Treasury, 1500 
Pennsylvania Avenue NW., Washington DC 20220; by email to 
[email protected]; or by facsimile at (202) 453-2466 (This is not 
a toll free number).

SUPPLEMENTARY INFORMATION:

Background

    The CDFI Fund was established as a wholly owned government 
corporation by the Community Development Banking and Financial 
Institutions Act of 1994, as amended (12 U.S.C. 4701 et seq.) (the 
Act). Subsequent legislation placed the CDFI Fund within the Department 
of the Treasury and gave the Secretary of the Treasury all powers and 
rights of the Administrator of the CDFI Fund as set forth in the Act.
    The CDFI Fund's programs are designed to facilitate the flow of 
lending and investment capital to distressed communities and to 
individuals who have been unable to take full advantage of the 
financial services industry. Access to credit, investment capital, and 
financial services are essential ingredients for creating and retaining 
jobs, developing affordable housing,

[[Page 65152]]

revitalizing neighborhoods, unleashing the economic potential of small 
businesses, and empowering people.
    The CDFI Fund was established to promote economic revitalization 
and community development through, among other things, investment in 
and assistance to CDFIs, which specialize in serving underserved 
markets and the people who live there. CDFIs--while highly effective--
are typically small in scale and often have difficulty raising the 
capital needed to meet the demands for their products and services. 
Through the CDFI Program, the CDFI Fund provides CDFIs with financial 
assistance in the form of grants, loans, equity investments, and 
deposits in order to enhance their ability to make loans and 
investments, and provide services for the benefit of designated 
investment areas, targeted populations or both. Additionally, many 
CDFIs are in formation or in the early stages of development in many 
markets underserved by traditional financial institutions, including 
rural and Native American communities. The CDFI Program assists such 
entities--as well as established CDFIs--by providing grants through 
which they may acquire technical assistance to build their capacity to 
serve their target markets. Applicants participate in the CDFI Program 
through a merit-based qualitative application and selection process in 
which the CDFI Fund makes funding decisions based on pre-established 
evaluation criteria. An entity generally receives financial assistance 
monies from the CDFI Fund only after being certified as a CDFI and 
entering into an assistance agreement with the CDFI Fund. These 
assistance agreements include performance goals, matching funds 
requirements and reporting requirements.
    On December 13, 2005, the CDFI Fund published in the Federal 
Register a revised interim rule (70 FR 73887) implementing the CDFI 
Program (the current rule).

Current Financial Reporting Requirements for Non-Profit Organizations

    Part 1805 of the CDFI Fund regulations (12 CFR part 1805) sets 
forth the requirements under the Act for Data Collection and Reporting 
by CDFI Program awardees. Section 1805.804(e)(1) (12 CFR 
1805.804(e)(1)) states that all non-profit organizations must submit to 
the CDFI Fund financial statements that have been reviewed by an 
independent certified public accountant in accordance with standards 
issued by the American Institute of Certified Public Accountants, no 
later than 180 days after the end of the Awardee's fiscal year; and 
that audited financial statements can be provided by the due date in 
lieu of reviewed statements, if available.
Statutory Financial Reporting Requirements for CDFI Program Awardees
    The Act requires the CDFI Fund to ensure that each CDFI Program 
awardee (other than an insured CDFI or depository institution holding 
company) submit, not less than once during each 18-month period, a 
statement of financial condition audited by an independent certified 
public accountant as part of the awardee's annual report to the CDFI 
Fund required by section 4714(e)(1) of the Act.
Conforming CDFI Program Regulations to the Act
    The CDFI Program Regulations currently permit non-profit CDFI 
awardees to submit financial statements that are reviewed but not 
audited by independent certified public accounts as part of their 
annual report to the CDFI Fund. This was done in part out of a 
recognition of the cost and time constraints non-profit awardees face 
in obtaining audited financial statements within the allotted 180-day 
period following the end of their fiscal year. The CDFI Fund is issuing 
this interim rule to conform the regulatory reporting requirements to 
the requirements of the Act.

Regulatory Analysis and Notices

Executive Order 12866

    It has been determined that this final rule is not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required under the 
Administrative Procedure Act (5 U.S.C. 553) or any other law, the 
Regulatory Flexibility Act does not apply.

Paperwork Reduction Act

    The collections of information contained in this interim rule have 
been previously reviewed and approved by the Office of Management and 
Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 and 
assigned OMB Control Numbers 1559-0006, 1559-0021, and 1559-0022. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a valid 
control number assigned by OMB. This document restates the collections 
of information without substantive change.

National Environmental Policy Act

    This interim rule has been reviewed in accordance with 12 CFR part 
1815. The CDFI Fund's Environmental Regulations under the National 
Environmental Protection Act of 1969 (NEPA) require that the CDFI Fund 
adequately consider the cumulative impact proposed activities have upon 
the human environment. It is the determination of the CDFI Fund that 
the interim rule does not constitute a major federal action 
significantly affecting the quality of the human environment and, in 
accordance with the NEPA and the CDFI Fund Environmental Quality 
Regulations, 12 CFR part 1815, neither an Environmental Assessment nor 
an Environmental Impact Statement is required.

Administrative Procedure Act

    Because this interim rule relates to loans and grants, notice and 
public procedure and a delayed effective date are not required pursuant 
to the Administrative Procedure Act, 5 U.S.C. 553(a)(2).

Catalogue of Federal Domestic Assistance Number

    Community Development Financial Institutions Program--21.020.

List of Subjects in 12 CFR Part 1805

    Community development, Grant programs--housing and community 
development, Loan programs--housing and community development, 
Reporting and recordkeeping requirements, Small businesses.

Amendment to the Regulations

    For the reasons discussed in the preamble, the CDFI Fund is 
amending 12 CFR part 1805 as follows:

PART 1805--COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS PROGRAM

0
1. The authority citation for part 1805 continues to read as follows:

    Authority: 12 U.S.C. 4703, 4703 note, 4710, 4717; and 31 U.S.C. 
321.


0
2. In Sec.  1805.804, paragraph (e)(1)(i) is revised to read as 
follows:


Sec.  1805.804  Data collection and reporting.

* * * * *
    (e) * * *
    (1) * * *
    (i) All non-profit organizations (excluding Insured CDFIs and 
State-Insured Credit Unions) must submit to

[[Page 65153]]

the CDFI Fund financial statements that have been audited by an 
independent certified public accountant in accordance with generally 
accepted auditing standards as promulgated by the American Institute of 
Certified Public Accountants, no later than 180 days after the end of 
the Awardee's fiscal year. Non-profit organizations (excluding Insured 
CDFIs and State-Insured Credit Unions) that are required to have their 
financial statements audited pursuant to OMB Circular A-133 Audits of 
States, Local Governments and Non-Profit Organizations, must also 
submit their A-133 audited financial statements to the CDFI Fund no 
later than 270 days after the end of the Awardee's fiscal year. Non-
profit organizations (excluding Insured CDFIs and State-Insured Credit 
Unions) that are not required to have financial statements audited 
pursuant to OMB Circular A-133, Audits of States, Local Governments and 
Non-Profit Organizations, must submit to the CDFI Fund a statement 
signed by the Awardee's Authorized Representative or certified public 
accountant, asserting that the Awardee is not required to have a single 
audit pursuant OMB Circular A-133.
* * * * *

    Dated: October 24, 2013.
Donna J. Gambrell,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2013-25872 Filed 10-30-13; 8:45 am]
BILLING CODE 4810-70-P