[Federal Register Volume 85, Number 63 (Wednesday, April 1, 2020)]
[Notices]
[Pages 18282-18285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-06714]


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

NATIONAL CREDIT UNION ADMINISTRATION


Community Development Revolving Loan Fund Access for Credit 
Unions

ACTION: Notice of funding opportunity.

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

FUNDING OPPORTUNITY TITLE: Community Development Revolving Loan Fund 
(CDRLF) Loans

CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) NUMBER: 44.002.

SUMMARY: The National Credit Union Administration (NCUA) is issuing 
this Notice of Funding Opportunity (NOFO) to announce the availability 
of loans (awards) for low-income designated credit unions (LICUs) 
through the CDRLF. The CDRLF serves as a source of financial support in 
the form of loans and technical assistance grants that better enable 
LICUs to support the communities in which they operate. All awards made 
under this NOFO are subject to funds availability and are at the NCUA's 
discretion.

Table of Contents

A. Program Description
B. 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

    The purpose of the CDRLF is to assist LICUs in providing basic 
financial services to their members to stimulate economic activities in 
their communities. The CDRLF consists of Congressional appropriations 
that are administered by the NCUA. Through the CDRLF, the NCUA provides 
financial support in the form of awards to LICUs. These funds help 
improve and expand the availability of financial services to these 
members. The NCUA accepts loan applications on a continuous basis 
subject to funding availability.

[[Page 18283]]

    Since its inception, Congress has appropriated approximately $13.4 
million for revolving loans through the CDRLF. The CDRLF's revolving 
loan component received its last appropriation in fiscal year 2005 for 
$200,000. Approximately $7 million will be available for loans under 
this NOFO as of March 27, 2020.

1. Permissible Uses of Loan Funds

    The NCUA may consider requests for loan funds for various uses. A 
non-exhaustive list of examples of permissible uses or projects is 
defined in 12 CFR 705.4. The NCUA may consider other proposed uses of 
loan funds that are not listed if it determines the Proposal to be 
consistent with the purpose of the CDRLF. The list includes the 
following:
    i. Development of new products or services for members, including 
new or expanded share draft or credit card programs;
    ii. Partnership arrangements with community-based service 
organizations or government agencies;
    iii. Loan programs, including, but not limited to, microbusiness 
loans, payday loan alternatives, education loans, and real estate 
loans;
    iv. Acquisition, expansion, or improvement of office space or 
equipment, including branch facilities, ATMs, and electronic banking 
facilities;
    v. Operational programs such as security and disaster recovery; and
    vi. Responding to emergencies such as pandemics, natural disasters, 
economic downturns, etc. The NCUA recognizes that these emergencies 
will impact the credit union industry to varying degrees. The NCUA 
intends to support the efforts of LICUs through emergency funding 
needed to respond to unexpected and unplanned events. Specific details 
will be defined and provided in the applicable guidelines and posted on 
NCUA's website.

2. Authority and Regulations

    i. Authority: 12 U.S.C. 1772c-1, 1756, 1757(5)(D), and (7)(I), 
1766, 1782, 1784, 1785 and 1786;
    ii. Regulations: The regulation governing the CDRLF is found at 12 
CFR part 705. In general, this regulation is used by the NCUA to govern 
the CDRLF and set forth the program requirements. Additional 
regulations related to the low-income designation are found at 12 CFR 
parts 701.34 and 741.204. For the purposes of this NOFO, an 
``Applicant'' is a Participating Credit Union that submits a complete 
application to the NCUA under the CDRLF. The NCUA encourages Applicants 
to review the regulations, this NOFO, and other program materials for a 
complete understanding of the program.

B. Award Information

    The NCUA expects to award as many qualified credit unions as 
possible through this NOFO, subject to funding availability. CDRLF 
loans are typically made at lower than market interest rates.
    Approximately $7 million, derived from prior-year appropriated and 
earned funds, will be available for qualified credit unions beginning 
March 27, 2020. The amount of funding available for CDRLF loans 
fluctuate whenever previously scheduled loans are fully amortized and/
or if Congress makes an appropriation to the CDRLF revolving loan 
component. 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.
    The specific terms and conditions governing a CDRLF award will be 
established in the loan documents that each Participating Credit Union 
must sign prior to disbursement of funds. The rest of this section 
contains general award information regarding loans made through the 
CDRLF.

1. 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. CDRLF loan awards typically range from 
$250,000 to $500,000. The amount of the loan will be based on the 
following factors:
    i. Funds availability:
    ii. Credit worthiness of the credit union;
    iii. Financial need;
    iv. Demonstrated capability of the credit union to provide 
financial and related services to its members; and
    v. Concurrence from the credit union's NCUA regional office and/or 
the applicable the State Supervisory Authority (SSA) for qualifying 
state-chartered credit unions.

2. Maturity

    CDRLF loans will generally mature in five years. The loan period 
may be shorter at the NCUA's discretion or at the request of the credit 
union, but in no case will the term exceed five years.

3. Interest Rate

    The interest rate on CDRLF loans is governed by the CDRLF Loan 
Interest Rate Policy. The policy can be found on the NCUA's website at 
https://www.ncua.gov/support-services/credit-union-resources-expansion/grants-loans/loans. CDRLF loans are generally offered at a fixed rate 
for the full term. The NCUA reserves the right to reduce the interest 
rate when it benefits the objectives of CDRLF priorities and/or 
initiatives.
    The NCUA may decide to lower the interest rate and change the loan 
terms during emergency conditions as described under Section A 
Permissible Use of Loan Funds of this document.

4. Repayment

    All loans must be repaid to the NCUA regardless of how they are 
accounted for by the Participating Credit Union.
    i. Principal: The entire principal is due at maturity.
    ii. Interest: Interest is due in semi-annual payments beginning six 
months after the initial distribution of the loan.
    iii. 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 eligibility 
requirements defined in 12 CFR part 705. A credit union must have a 
low-income designation obtained in accordance with 12 CFR 701.34 or 
741.204 in order to participate in the CDRLF.
    i. 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 12 CFR 705.7(b)(3) and in the application.
    a. 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 award agreement of the 
Participating Credit Union.

2. Matching Funds (if Applicable)

    At its discretion, the NCUA may require the Applicant to submit a 
functional plan to meet the matching funds requirement depending on the 
financial condition of the Applicant. The NCUA anticipates that most 
Applicants will not be required to

[[Page 18284]]

obtain matching funds. 12 CFR 705.5(g) of the NCUA's regulations 
describe the overall requirements for matching funds.
    i. 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.
    a. The amount of matching funds required must generally be in an 
amount equal to the loan amount.
    b. Matching funds must be from non-governmental member or nonmember 
share deposits.
    c. Any loan monies matched by nonmember share deposits are not 
subject to the 20% limitation on nonmember deposits defined in 12 CFR 
701.32.
    d. 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 requirements defined in 
defined in 12 CFR 701.32.
    ii. Criteria for 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.

a. CAMEL Composite Rating
b. CAMEL Management Rating
c. CAMEL Asset Quality Rating
d. Regional Director Concurrence
e. Net Worth Ratio

    iii. 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. Data Universal Numbering System (DUNS) Number

    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. Registering for a DUNS number is FREE. Applicants can obtain 
a DUNS number by visiting the Dun & Bradstreet (D&B) website or calling 
1-866-705-5711. 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.

4. 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.

5. 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. An active SAM account status and CAGE number is required to 
apply for a CDRLF award. Credit unions that have an existing 
registration with SAM must recertify and maintain an active status 
annually. The SAM registration and recertification process is FREE. 
First-time SAM users can register by following the instructions in the 
Quick Start Guide for New Registrations. Existing users can recertify 
or renew their SAM account status by following the instructions in the 
Quick Start Guide for Renewing Registrations. 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.

6. Other Eligibility Requirements

    i. 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 defined in 12 
CFR 705.7(c).
    ii. 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.
    a. 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.
    b. If an Applicant is a prior Participating Credit Union under the 
CDRLF and has unused awards as of the date of application, the NCUA may 
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

    Under this NOFO, all applications must be submitted online in the 
NCUA's web-based application system, CyberGrants, in order to be 
considered. Applications must be submitted online at https://www.cybergrants.com/ncua/applications. The application and related 
documents are also located on the NCUA's website at https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx.

2. Minimum Application Content

    At a minimum, the application will require credit unions to provide 
information about the following core application contents: (i) Project 
title; (ii) loan amount requested; (iii) total cost of the proposed 
project; (iv) project activity or objective; and (v) proposed use of 
the loan funds.

3. Submission Dates and Times

    i. COVID-19 Emergency Support Loan: The NCUA will accept 
applications beginning March 27, 2020, at 9:00 a.m. eastern time (ET) 
for this initiative. Applications must be submitted by May 22, 2020, at 
11:59 p.m. ET.
    ii. All Other Loans: The NCUA accepts applications on a continuous 
basis subject to funding availability.

E. Application Review Information

1. 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, program guidelines, and in this NOFO. An 
incomplete

[[Page 18285]]

application or one that does not meet the eligibility requirements will 
be declined without further consideration.

2. Evaluation Criteria

    The evaluation criteria is fully described in 12 CFR 705.7(c). The 
NCUA will evaluate each application on accordance with the criteria 
described in the regulation, this NOFO and program guidelines: 
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.

3. Application Review

    The purpose of the application review is to determine whether the 
NCUA should support and fund the loan request. During this phase of the 
review, the NCUA reviews the credit union's prior financial and 
operational performance, the collateral offered to securitize the loan 
(if applicable), and its longevity in operation. 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.

4. 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.

5. 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.

F. Federal Award Administration

1. Federal Award Notice

    The NCUA will notify each Applicant of its funding decision by 
email. 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

    i. Loan Agreement: Each Participating Credit Union under this NOFO 
must enter into an 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.
    ii. 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.
    iii. 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

    The reporting requirements are more fully described in 12 CFR 
705.9. 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.
    i. 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.

G. Federal Awarding Agency

1. Methods of Contact

    Further information can be found at https://www.ncua.gov/services/Pages/resources-expansion/grants-loans.aspx. For questions related to 
the CDRLF, email the NCUA's 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 March 26, 
2020.
Gerard Poliquin,
Secretary of the Board.
[FR Doc. 2020-06714 Filed 3-31-20; 8:45 am]
 BILLING CODE 7535-01-P