[Federal Register Volume 83, Number 105 (Thursday, May 31, 2018)]
[Notices]
[Pages 25056-25060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11689]


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NATIONAL CREDIT UNION ADMINISTRATION

[Catalog of Federal Domestic Assistance (CFDA) Number: 44.002]


Community Development Revolving Loan Fund

ACTION: Notice of Funding Opportunity (NOFO).

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SUMMARY: The National Credit Union Administration (NCUA) is issuing 
this notice to announce the availability of funding for Low-Income 
Designated Credit Unions (LICUs) Applications for loans and technical 
assistance grants under the Community Development Revolving Loan Fund 
(CDRLF) program. The CDRLF program serves as a source of financial 
support in the form of loans and technical assistance grants that 
better enables LICUs to support the communities in which they operate. 
All loans and technical assistance grants from multi-year funds made 
under this NOFO are subject to funds availability and are at the NCUA's 
discretion.

DATES: 

            Table 1--FY 2018 CDRLF Program Application Dates
------------------------------------------------------------------------
                                      Application
           Initiative                   periods            Deadline
------------------------------------------------------------------------
General Grant Round.............  July 1-August 18..  11:59 p.m. Eastern
                                                       Time (ET).
Loan............................  Until Funds are     N/A.
                                   Exhausted.
------------------------------------------------------------------------

Table of Contents

A. Program Description
B. Federal Award Information
C. Eligibility Information
D. Application and Submission Information
E. Application Review Information
F. Federal Award Administration
G. Federal Awarding Agency

A. Program Description

1. Purpose

    The purpose of the CDRLF program is to assist LICUs in providing 
basic financial services to their members to stimulate economic 
activities in their communities. Through the CDRLF program, the NCUA 
provides financial support in the form of loans and technical 
assistance grants to LICUs serving predominantly low-income members. 
These funds help improve and expand the availability of financial 
services to these members. The CDRLF program consists of Congressional 
appropriations that are administered by the NCUA.
    The NCUA will accept applications from LICUs for the initiatives 
referenced in Table 2. The financial awards may be used for projects 
that support the efforts of credit unions providing basic financial and 
related services to residents in their communities; enhancing their 
capacity to better serve their members and the communities in which 
they operate.

               Table 2--FY 2018 CDRLF Program Initiatives
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Initiative Names:
    Digital Services and Security (General Grant Round).
    Leadership Development (General Grant Round).
    Underserved Outreach (General Grant Round).
    Low-Cost Loan.
------------------------------------------------------------------------

    More detailed information about the CDRLF program, including the 
types of initiatives for the grant round, amount of funds available, 
funding priorities, permissible uses of funds, funding limits, 
deadlines and other pertinent details, are periodically published in

[[Page 25057]]

NCUA Letters to Credit Unions, in NCUA press releases and on the NCUA 
website at https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx.

2. Regulations and Authority

    Part 705 of the NCUA's regulations implements the CDRLF program. 12 
CFR 705. A revised Part 705 was published on November 25, 2016. 81 FR 
85112. Additional requirements are found at 12 CFR 701 and 741. 
Applicants should review these regulations in addition to this NOFO. 
Each capitalized term in this NOFO is more fully defined in the 
regulations, program guidelines, and other application materials. For 
the purposes of this NOFO, an Applicant is a Qualifying Credit Union 
that submits a complete Application to the NCUA under the CDRLF 
program. The NCUA will consider requests for funds consistent with the 
purpose of the CDRLF program. 12 CFR 705.1.

    Authority: 12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782, 
1784, 1785 and 1786; 12 CFR 705.

B. Federal Award Information

    The NCUA expects to award approximately $2 million in grants 
through this NOFO. Approximately $5.3 million will be available for 
loans under this NOFO, derived from prior-year appropriated and earned 
funds. Monies for additional loans come from scheduled loan 
amortizations. The NCUA reserves the right to: (i) Award more or less 
than the amounts cited above; (ii) fund, in whole or in part, any, all, 
or none of the applications submitted in response to this NOFO; and 
(iii) reallocate funds from the amount that is anticipated to be 
available under this NOFO to other programs, particularly if the NCUA 
determines that the number of awards made under this NOFO is fewer than 
projected.
    Table 3 includes specific information about the funding available, 
maximum award amounts, and application window for each CDRLF program 
initiative. The specific terms and conditions governing a CDRLF award 
will be established in the grant or loan agreement each Participating 
Credit Union must sign prior to disbursement of funds.

                             Table 3--FY 2018 CDRLF Program Initiatives and Amounts
----------------------------------------------------------------------------------------------------------------
                                                                                                   Total funding
            Initiative               Maximum award    Application start     Application end date     available
                                        amount               date                                    (million)
----------------------------------------------------------------------------------------------------------------
General Grant Round:
    1. Digital Services and                $10,000  July 1, 2018, 9:00     August 18, 2018,                   $2
     Security.                                       a.m. ET.               11:59 p.m. ET.
    2. Leadership Development.....          10,000
    3. Underserved Outreach.......          20,000
                                                   ----------------------------------------------
Loan..............................         500,000         Open until funds are exhausted                    5.3
----------------------------------------------------------------------------------------------------------------

1. Additional Loan Initiative Information

    The following are the general loan terms under the CDRLF program.
    a. Maximum Loan Amount: The NCUA makes loans based on the financial 
condition of the credit union. The applicable regulation does not 
provide a maximum limit on loan applications for consideration, but in 
practice the NCUA discourages loan applications of higher than $500,000 
to mitigate risk. There is no minimum loan amount. The amount of the 
loan will be based on the following factors:
     Funds availability;
     Credit worthiness of the credit union;
     Financial need;
     Demonstrated capability of credit union to provide 
financial and related services to its members; and
     Concurrence from the NCUA Regional Office and if 
applicable, the State Supervisory Authority (SSA)
    b. Maturity: Loans will generally mature in five years. A credit 
union may request a shorter loan period, but in no case will the term 
exceed five years.
    c. Interest: The interest rate on loans is governed by the Loan 
Interest Rate Policy, which can be found on the NCUA's website at 
https://www.ncua.gov/services/Documents/interest-rate-policy.pdf. CDRLF 
loans are generally offered at a fixed rate for the full term.
    d. Repayment: All loans must be repaid to the NCUA regardless of 
how they are accounted for by the Participating Credit Union.
    1. Principal: The entire principal is due at maturity.
    2. Interest: Interest is due in semi-annual payments beginning six 
months after the initial distribution of the loan.
    3. Principal Prepayment: There is no penalty for principal 
prepayment. Principal prepayments may be made as often as monthly.

C. Eligibility Information

1. Eligible Applicants

    This NOFO is open to credit unions that meet the compliance 
requirements specified in 12 CFR 705. A credit union must have a Low-
Income Credit Union (LICU) designation, or equivalent in the case of a 
Qualifying State-chartered Credit Union, in order to participate in the 
CDRLF program. Requirements for obtaining the designation are found at 
12 CFR 701.34.

2. Matching Funds (Only Applicable to Loan Applicants)

    Part 705.5(g) of the NCUA's regulations describe the overall 
requirements for matching funds. The NCUA, in its sole discretion, may 
require matching funds of an Applicant, on a case-by-case basis 
depending on the financial condition of the Applicant. The NCUA 
anticipates that most Applicants will not be required to obtain 
matching funds. However, each Applicant should address in the 
Application its strategy for raising matching funds if the NCUA 
determines matching funds are required (see 12 CFR 705 and the 
Application for additional information).
    a. Matching Funds Requirements: The specific terms and covenants 
pertaining to any matching funds requirement will be provided in the 
loan agreement of the Participating Credit Union. Following, are 
general matching fund requirements. The NCUA, in its sole discretion, 
may amend these requirements depending upon its evaluation of the 
Applicant, but in no case will the amended requirements be greater than 
the conditions listed below.

[[Page 25058]]

    i. The amount of matching funds required must generally be in an 
amount equal to the loan amount.
    ii. Matching funds must be from non-governmental member or 
nonmember share deposits.
    iii. Any loan monies matched by nonmember share deposits are not 
subject to the 20% limitation on nonmember deposits under Sec.  701.32 
of the NCUA's regulations.
    iv. Participating Credit Unions must maintain the outstanding loan 
amount in the total amount of share deposits for the duration of the 
loan. Once the loan is repaid, nonmember share deposits accepted to 
meet the matching requirement are subject to Sec.  701.32 of the NCUA's 
regulations.
    b. Criteria for Requiring Matching Funds: The NCUA will use the 
following criteria to determine whether to require an Applicant to have 
matching funds as a condition of its loan.
     CAMEL Composite Rating
     CAMEL Management Rating
     CAMEL Asset Quality Rating
     Regional Director Concurrence
     Net Worth Ratio
    c. Documentation of Matching Funds: The NCUA may contact the 
matching funds source to discuss the matching funds and the 
documentation that the Applicant has provided. If the NCUA determines 
that any portion of the Applicant's matching funds is ineligible under 
this NOFO, the NCUA, in its sole discretion, may permit the Applicant 
to offer alternative matching funds as a substitute for the ineligible 
matching funds. In this case, the Applicant must provide acceptable 
alternative matching funds documentation within 10 business days of the 
NCUA's request.

3. Other Eligibility Requirements

    a. Financial Viability: Applicants must meet the underwriting 
standards established by the NCUA, including those pertaining to 
financial viability, as set forth in the application and found in 12 
CFR 705.7(c).
    b. Compliance With Past Agreements: In evaluating funding requests 
under this NOFO, the NCUA will consider an Applicant's record of 
compliance with past agreements. The NCUA, in its sole discretion, will 
determine whether to consider an Application from an Applicant with a 
past record of noncompliance, including any deobligation (i.e. removal 
of unused awards) of funds.
    i. Default Status: If an Applicant is in default of a previously 
executed agreement with the NCUA, the NCUA will not consider an 
Application for funding under this NOFO.
    ii. Undisbursed Funds: If an Applicant is a prior awardee under the 
CDRLF program and has unused grant awards as of the date of 
Application, the NCUA will request a narrative from the Applicant that 
addresses the reason for its record of noncompliance. The NCUA, in its 
sole discretion, will determine whether the reason is sufficient to 
proceed with the review of the Application.

D. Application and Submission Information

1. Application Form

    The application and related documents can be found on the NCUA's 
website at https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx.

2. Minimum Application Content

    A complete Application will consist of similar components for each 
CDRLF program initiative. At a minimum, each initiative requires a 
narrative response that describes how the CDRLF award will be used by 
the Applicant. The NCUA reserves the right to waive this requirement 
for initiatives deemed to be satisfactory without a written 
description. If an initiative does not require a narrative response, 
the NCUA will explain this in the program guidelines.
    a. Data Universal Numbering System: The Data Universal Numbering 
System (DUNS) number is a unique nine-character number used to identify 
your organization. The federal government uses the DUNS number to track 
how federal money is allocated. Applicants can obtain a DUNS number by 
visiting the Dun & Bradstreet (D&B) website or calling 1-866-705-5711 
to register or search for a DUNS number. Registering for a DUNS number 
is FREE. The NCUA will not consider an Application that does not 
include a valid DUNS number issued by Dun and Bradstreet (D&B). Such an 
Application will be deemed incomplete and will be declined.
    b. System for Award Management: All Applicants are required by 
federal law to have an active registration with the federal 
government's System for Award Management (SAM) prior to applying for 
funding. SAM is a web-based, government-wide application that collects, 
validates, stores, and disseminates business information about the 
Federal Government's trading partners in support of the contract 
awards, grants, and electronic payment processes. Applicants can 
register by visiting www.sam.gov. An active SAM account status and CAGE 
number is required to apply for the NCUA's CDRLF programs. The SAM 
registration process is FREE. Applicants that have an existing 
registration with SAM must recertify and maintain an active status 
annually. The NCUA will not consider an Applicant that does not have an 
active SAM status. Such an Application will be deemed incomplete and 
will be declined.
    c. Employer Identification Number: Each Application must include a 
valid and current Employer Identification Number (EIN) issued by the 
U.S. Internal Revenue Service (IRS). The NCUA will not consider an 
Application that does not include a valid and current EIN. Such an 
Application will be deemed incomplete and will be declined. Information 
on how to obtain an EIN may be found on the IRS's website at 
www.irs.gov.
    d. Large Loans: An Applicant requesting a loan in excess of 
$300,000 is required to complete an online application form that 
contains additional narrative comments to support the request. In 
addition, the NCUA may also require a business plan.
    i. The business plan must: Describe the community's need for 
financial products and services and the Applicant's need for funding; 
summarize the services, financial products, and services provided by 
the Applicant; describe the Applicant's involvement with other 
entities; describe the credit union's marketing strategy to reach 
members and the community; and include financial projections.
    e. Non-Federally Insured Applicants: Each Applicant that is a non-
federally insured, state-chartered credit union must submit additional 
application materials. These additional materials are more fully 
described in Sec.  705.7(b) (3) of the NCUA's regulations and in the 
Application.
    i. Examination by the NCUA: Non-federally insured, state-chartered 
credit unions must agree to be examined by the NCUA. The specific terms 
and covenants pertaining to this condition will be provided in the loan 
or grant agreement of the Participating Credit Union.

3. Submission Dates and Times

    The application period for each CDRLF program initiative is 
highlighted in Table 4. Applications must be submitted online in the 
NCUA's web-based application system, CyberGrants, by the deadline in 
order to be considered. Late Applications will not be considered under 
any circumstance.

[[Page 25059]]



             Table 4--Application Submission Dates and Times
------------------------------------------------------------------------
                                   Application start    Application end
           Initiative                    date                date
------------------------------------------------------------------------
Grant--Digital Services and       July 1, 2018, 9:00  August 18, 2018,
 Security.                         a.m. ET.            11:59 p.m. ET.
Grant--Leadership Development...
Grant--Underserved Outreach.....
                                 ---------------------------------------
Loan............................    Open All Year Round Until Funds are
                                                 Exhausted.
------------------------------------------------------------------------

4. Other Submission Requirements

    Under this NOFO, Applications must be submitted online at http://www.cybergrants.com/ncua/applications.

E. Application Review Information

1. Review and Selection Process for Loans

    a. Eligibility and Completeness Review: The NCUA will review each 
Application to determine whether it is complete and that the Applicant 
meets the eligibility requirements described in the Regulations and in 
this NOFO. An incomplete Application or one that does not meet the 
eligibility requirements will be declined without further 
consideration.
    b. Substantive Review: After an Applicant is determined eligible 
and its Application is determined complete, the NCUA will conduct a 
substantive review in accordance with the criteria and procedures 
described in the Regulations. The NCUA reserves the right to contact 
the Applicant during its review for the purpose of clarifying or 
confirming information contained in the Application. If so contacted, 
the Applicant must respond within the time specified by the NCUA or the 
NCUA, in its sole discretion, may decline the application without 
further consideration.
    c. Evaluation: The evaluation criteria are more fully described in 
Sec.  705.7(c) of the NCUA's regulations. The NCUA will evaluate each 
Application that receives a substantive review on the four criteria 
described in the regulation, this NOFO and the applicable guideline: 
Financial performance, compatibility, feasibility, and examination 
information and applicable concurrence. Each initiative, due to its 
structure and impact, have varying degrees of evaluation criteria 
assigned which are reflected in the guidelines for credit union's 
information. Overall, the evaluation strategy consists of the following 
which may be reduced or increased based on award amount, initiative 
and/or risk.
    i. Assessment of Impact: The Compatibility criteria will take into 
consideration the extent of community need and projected impact of the 
funding on the Applicant's members and community.
    ii. Effective Strategy: The Feasibility criteria will take into 
consideration the quality of the Applicant's strategy and its capacity 
to execute the strategy as demonstrated by its past performance, 
partnering relationships, and other relevant factors.
    iii. Evaluating Prior Award Performance: For prior participants of 
the CDRLF program, loans may not be awarded if the participant: (1) Is 
noncompliant with any active award; (2) failed to make timely loan 
payments to the NCUA during fiscal years prior to the date of 
Application; and (3) had an award deobligated (i.e. removal of unused 
awarded funds) during fiscal years prior to the date of Application.
    d. Examination Information and Applicable Concurrence: The NCUA 
will not approve an award to a credit union for which it's NCUA 
regional examining office or SSA, if applicable, indicates it has 
safety and soundness concerns. If the NCUA regional office or SSA 
identifies a safety and soundness concern, the NCUA, in conjunction 
with the regional office or SSA, will assess whether the condition of 
the Applicant is adequate to undertake the activities for which funding 
is requested, and the obligations of the loan and its conditions. The 
NCUA, in its sole discretion, may defer decision on funding an 
Application until the credit union's safety and soundness conditions 
improve.
    e. Funding Selection: The NCUA will make its funding selections 
based on a consistent scoring tier for each Applicant. The NCUA will 
consider the impact of the funding. In addition, the NCUA may consider 
the geographic diversity of the Applicants in its funding decisions. 
When loan demand is high, Applications will be ranked based on the 
aforementioned.

2. Review and Selection Process for Grants

    a. Eligibility and Completeness Review: The NCUA will review each 
Application to determine whether it is complete and that the Applicant 
meets the eligibility criteria described in the Regulations, this NOFO, 
and the grant guidelines. An incomplete Application or one that does 
not meet the eligibility criteria will be declined without further 
consideration.
    b. Substantive Review: After an Applicant is determined eligible 
and its Application is determined complete, the NCUA will conduct a 
substantive review in accordance with the criteria and procedures 
described in the Regulations, this NOFO, and the grant guidelines. The 
NCUA reserves the right to contact the Applicant during its review for 
the purpose of clarifying or confirming information contained in the 
Application. If so contacted, the Applicant must respond within the 
time specified by the NCUA or the NCUA, in its sole discretion, may 
decline the Application without further consideration.
    c. Evaluation and Scoring: The evaluation criteria for each 
initiative is fully described in the grant guidelines.
    d. Input from Examiners: The NCUA may not approve an award to a 
credit union for which it's NCUA regional examining office or State 
Supervisory Agency (SSA), if applicable, indicates it has safety and 
soundness concerns. If the NCUA regional office or SSA identifies a 
safety and soundness concern, CURE, in conjunction with the regional 
office or SSA, will assess whether the condition of the Applicant is 
adequate to undertake the activities for which funding is requested, 
and the obligations of the grant and its conditions. The NCUA, in its 
sole discretion, may defer decision on funding an Application until the 
credit union's safety and soundness conditions improve.
    e. Award Selection: The NCUA will make its award selections based 
on a consistent scoring system where each Applicant will receive a 
ranking position. The NCUA will also consider the impact of funding and 
rank Applications based on the factors listed in the grant guidelines.

F. Federal Award Administration

1. Federal Award Notices

    The NCUA will notify each Applicant of its funding decision by 
email. In addition, the NCUA will publish a press release and post on 
its website a list of

[[Page 25060]]

the successful awardees for grants. Additional instructions for post-
award activities will be provided by email and in other post-award 
materials. Applicants that are approved for funding will also receive 
instructions on how to proceed with disbursement of the award.

2. Administrative and National Policy Requirements

    The specific terms and conditions governing a CDRLF award will be 
established in the program guidelines for each initiative.
    a. Grant Agreement: Each Participating Credit Union under this NOFO 
must enter into agreement with the NCUA before the NCUA will disburse 
the grant funds. The Agreement will include the terms and conditions of 
funding, including but not limited to the: (i) Award amount; (ii) grant 
award details; (iii) roles and responsibilities; (iv) accounting 
treatment; (v) signature pages; and (vi) reporting requirements.
    b. Loan Agreement: Each Participating Credit Union under this NOFO 
must enter into agreement with the NCUA before the NCUA will disburse 
the award funds. The agreement documents include, for example, a 
promissory note, loan agreement, repayment schedule, and security 
agreement (if applicable). The Agreement will include the terms and 
conditions of funding, including but not limited to the: (i) Award 
amount; (ii) interest rate; (iii) repayment requirements; (iv) 
accounting treatment; (v) impact measures; and (vi) reporting 
requirements.
    c. Failure to Sign Agreement: The NCUA, in its sole discretion, may 
rescind an award if the Applicant fails to sign and return the 
agreement or any other requested documentation, within the time 
specified by the NCUA.
    d. Multiple Disbursements: The NCUA may determine, in its sole 
discretion, to fund a loan in multiple disbursements. In such cases, 
the process for disbursement will be specified by the NCUA in the Loan 
Agreement.

3. Reporting

    a. Loans: The reporting requirements are more fully described in 
Sec.  705.9 of the NCUA's regulations. Annually, each Participating 
Credit Union will submit a report to the NCUA. The report will address 
the Participating Credit Union's use of the loan funds; the impact of 
funding; and explanation of any failure to meet objectives for use of 
proceeds, outcome, or impact. The NCUA, in its sole discretion, may 
modify these requirements. However, such reporting requirements will be 
modified only after notice to affected credit unions.
    Report Form: Applicable credit unions will be notified regarding 
the submission of the report form. A Participating Credit Union is 
responsible for timely and complete submission of the report. The NCUA 
will use such information to monitor each Participating Credit Union's 
compliance with the requirements of its loan agreement and to assess 
the impact of the CDRLF loan.
    b. Grants: All successful Applicants are responsible for the timely 
and complete submission of the post-grant award activities. This 
includes, but it is not limited to, signing the grant agreement, 
submitting a project status update, and completing a reimbursement 
request.
    Successful Applicants must submit a reimbursement request in order 
to receive the awarded funds. The reimbursement requirements are 
specific to each initiative. In general, the reimbursement request will 
require evidence of expenses, project related documentation, a summary 
of project accomplishments and outcomes, and a certification form 
signed by a credit union official (e.g., CEO, manager, or Board 
Chairperson) authorized to request the reimbursement and make the 
certifications. The NCUA, in its sole discretion, may modify these 
requirements. In general, successful Applicants are required to submit 
the reimbursement request within the expiration date specified in the 
approval letter.

G. Agency Contacts

1. Methods of Contact

    Further information can be found at https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx. For questions email: 
National Credit Union Administration, Office of Credit Union Resources 
and Expansion at [email protected].

2. Information Technology Support

    People who have visual or mobility impairments that prevent them 
from using the NCUA's website should call (703) 518-6610 for guidance 
(this is not a toll free number).

    By the National Credit Union Administration Board on May 24, 
2018.
Gerard Poliquin,
Secretary of the Board.
[FR Doc. 2018-11689 Filed 5-30-18; 8:45 am]
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