Bank Enterprise Award (BEA) Program; Programmatic and Administrative Aspects; Public Comment Request, 64598-64600 [2013-25622]
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64598
Federal Register / Vol. 78, No. 209 / Tuesday, October 29, 2013 / Notices
This transaction is related to a
verified notice of exemption filed in
Mule Sidetracks, L.L.C.—Acquisition
Exemption—Columbiana County Port
Authority, FD 35773, by which MSLLC
seeks an exemption to acquire from
CCPA the Line as well as assignment of
CCPA’s agreements and operating rights
to the three miles of connecting track
east of milepost 0.0.
The transaction may be consummated
on or after November 12, 2013, the
effective date of the exemption.2
Y&SR certifies that its projected
annual revenues as a result of this
transaction will not exceed $5 million
annually and will not result in Y&SR
becoming a Class I or Class II carrier.
If the verified notice contains false or
misleading information, the exemption
is void ab initio. Petitions to revoke the
exemption under 49 U.S.C. 10502(d)
may be filed at any time. The filing of
a petition to revoke will not
automatically stay the effectiveness of
the exemption. Petitions to stay must be
filed no later than November 5, 2013 (at
least seven days before the exemption
becomes effective).
An original and 10 copies of all
pleadings, referring to Docket No. FD
35774, must be filed with the Surface
Transportation Board, 395 E Street SW.,
Washington, DC 20423–0001. In
addition, a copy of each pleading must
be served on John D. Heffner,
Strasburger & Price, LLP, 1700 K Street
NW., Suite 640, Washington, DC 20006.
Board decisions and notices are
available on our Web site at
‘‘WWW.STB.DOT.GOV’’.
mstockstill on DSK4VPTVN1PROD with NOTICES
Decided: October 24, 2013.
Interline Service Agreement, effective October 5,
2004, between CQPA and NSR, to which CCPA is
successor; (6) Easements granted by Allied Erecting
& Dismantling Company, Inc. to The Pittsburgh and
Lake Erie Railroad Company by agreements dated
June 3, 1992, and November 10, 1993, and
easements retained by PLE in deeds dated June 3,
1992, and November 10, 1993, from PLE to Allied
(Allied Easements), which Allied Easements were
conveyed by Youngstown and Southern Railway
Company to Railroad Ventures, Inc. (RVI) by deed
dated November 8, 1996, and by RVI to CCPA by
deed dated January 23, 2001, and were included in
the rights granted to CQPA by CCPA, including
rights over the C.P. Graham Interlocking, and which
collective rights were also conferred on CCPA by
order of the Bankruptcy Court dated March 28,
2002, in In re: Pittsburgh & Lake Erie Properties,
Inc., Case No. 96–406, and to which CCPA is
successor; and (7) Operating Rights Agreement
between Matteson Equipment Company (Matteson)
and CQPA; and Operating Rights Agreement
between Eastern States Railroad, LLC (ESR) and
Matteson dated July 14, 2006, to which CCPA is
successor.
2 This notice was scheduled to be published in
the Federal Register during the time that the agency
was closed due to a lapse in appropriations.
Because publication of this notice has been delayed,
the effective date of the exemption will also be
delayed to provide adequate notice to the public.
VerDate Mar<15>2010
18:15 Oct 28, 2013
Jkt 232001
By the Board, Rachel D. Campbell,
Director, Office of Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2013–25565 Filed 10–28–13; 8:45 am]
BILLING CODE 4915–01–P
DEPARTMENT OF THE TREASURY
Community Development Financial
Institutions Fund
Bank Enterprise Award (BEA)
Program; Programmatic and
Administrative Aspects; Public
Comment Request
Community Development
Financial Institutions Fund, Department
of the Treasury.
ACTION: Request for public comment.
AGENCY:
This notice invites comments
from the public on certain programmatic
and administrative aspects of the
Community Development Financial
Institutions Fund’s (CDFI Fund) Bank
Enterprise Award (BEA) Program,
pursuant to the BEA Program
regulations set forth at 12 CFR part 1806
(the Interim Rule). All materials
submitted will be available for public
inspection and copying.
DATES: All comments and submissions
must be received by December 30, 2013.
ADDRESSES: Comments should be sent
by mail to: CDFI Fund, BEA Program
Office, U.S. Department of the Treasury,
1500 Pennsylvania Ave., NW.,
Washington, DC 20220; by email to
bea@cdfi.treas.gov; or by facsimile at
(202) 508–0089. This is not a toll free
number.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Information regarding the CDFI Fund
and its programs may be downloaded
from the CDFI Fund’s Web site at
https://www.cdfifund.gov.
SUPPLEMENTARY INFORMATION: Through
the BEA Program, the CDFI Fund
encourages Insured Depository
Institutions to increase their activities in
the form of loans, investments, services,
and technical assistance provided
within Distressed Communities, as well
as investments in Community
Development Financial Institutions
(CDFIs) through grants, stock purchases,
loans, deposits, and other forms of
financial and technical assistance. The
increase in these activities is measured
from a Baseline Period to an Assessment
Period. Each capitalized term used in
this Request for Public Comments is
more fully defined either in the Interim
Rule or the Notice of Funds Availability
for the FY 2013 BEA Program award
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
round (Federal Register/Vol. 78,
No.109) (the NOFA). Through this
notice, the CDFI Fund is seeking
comments from the public regarding
certain programmatic and
administrative aspects of the CDFI
Fund’s BEA Program. Commentators are
encouraged to consider, at a minimum,
the following topics:
I. Eligibility
A. CRA Rating: The Community
Reinvestment Act (CRA) encourages and
examines efforts to service the banking
needs of low- and moderate-income
communities. The CDFI Fund considers
a financial institution’s CRA rating a key
indicator of its efforts to serve the
communities that it does business in
and the effectiveness of those efforts in
providing access to financial products
and services to businesses and residents
of those communities, including lowand-moderate income communities.
As stated in Section VII ‘‘Application
Review Information’’ of the NOFA, the
CDFI Fund may choose not to approve
a BEA Program award at the time of
application if the Applicant and/or its
affiliates’ most recent overall CRA
assessment rating is below
‘‘Satisfactory.’’ This determination is
made during the review of the
application.
The CDFI Fund is considering making
this an ‘‘Eligibility’’ requirement
(Section III of the NOFA). If
implemented, Section III of the NOFA
would inform prospective Applicants
that a CRA rating of below
‘‘Satisfactory’’ during the Baseline
Period or the Assessment Period of the
applicable BEA Program award round
will result in ineligibility.
1. Should the CDFI Fund consider an
Applicant ineligible if the Applicant’s
CRA rating is below ‘‘Satisfactory’’ and
the CRA examination date was within
the applicable Baseline or Assessment
Period? If so, please indicate why. If not,
please provide a specific reason why
not.
2. Should the CDFI Fund consider an
Applicant ineligible if the Applicant’s
most recent CRA rating is below
‘‘Satisfactory’’ but the CRA examination
date was prior to the applicable Baseline
or Assessment Period? If so, please
indicate why. If not, please provide a
specific reason why not.
3. Should the CDFI Fund perform
additional due diligence to obtain an
update on the status or progress made
by the Applicant to improve its CRA
rating prior to making an eligibility
determination? If so, in which of the
two scenarios above should additional
due diligence be performed? Should
that information be self-reported by the
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Applicant, or provided directly by its
Appropriate Federal Banking Regulatory
Agency?
B. Financial Health: The BEA
Program requires award recipients to
deploy an amount equivalent to the
award received in additional Qualified
Activities in the calendar year following
the receipt of the award. This
requirement ensures that all BEA
Program award proceeds are directly
invested in distressed communities.
Award recipients must remain in
operation in order for their BEA
Program award proceeds to be
successfully deployed in Distressed
Communities. Therefore, the financial
health of an Applicant is an important
factor in making an award
determination. The CDFI Fund
considers an audit opinion a key
indicator of the financial health of an
Applicant.
As stated in Section VII ‘‘Application
Review Information’’ of the NOFA, the
CDFI Fund may choose not to approve
a BEA Program Award at the time of
application if the Applicant received a
going concern opinion on its most
recent audit. This determination is
made during the review of the
application.
The CDFI Fund is considering making
this an ‘‘Eligibility’’ requirement
(Section III of the NOFA). If
implemented, Section III of the NOFA
would inform prospective Applicants
that a going concern audit opinion
during the Baseline Period or the
Assessment Period of the applicable
BEA Program award round will result in
ineligibility.
1. Should the CDFI Fund consider an
Applicant ineligible to apply for a BEA
Program award if the Applicant received
a going concern on its most recent audit
report? If not, please provide a specific
reason why not.
2. Is there additional financial health
information that the CDFI Fund should
consider in making eligibility
determinations? If so, please describe.
II. Additional Program Considerations
A. Integrally Involved Certified-CDFIs:
The Interim Rule defines CDFI Support
Activity as assistance provided by an
Applicant or its Subsidiary to a certified
CDFI that meets criteria set forth by the
CDFI Fund in the applicable NOFA, that
is Integrally Involved in a Distressed
Community. The NOFA defines
Integrally Involved as having provided:
(i) At least 10 percent of financial
transactions or dollars transacted (e.g.,
loans or Equity Investments as defined
in 12 CFR 1805.104(t)), or 10 percent of
Development Service activities (as
defined in 12 CFR 1805.104(s)), in the
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18:15 Oct 28, 2013
Jkt 232001
Distressed Community identified by the
Applicant or the CDFI Partner, as
applicable, in each of the three calendar
years preceding the date of the
applicable NOFA, (ii) having transacted
at least 25 percent of financial
transactions (e.g., loans or Equity
Investments) in said Distressed
Community in at least one of the three
calendar years preceding the date of the
applicable NOFA, or (iii) demonstrated
that it has attained at least 10 percent of
market share for a particular product in
said Distressed Community (such as at
least 10 percent of home mortgages
originated in said Distressed
Community) in at least one of the three
calendar years preceding the date of the
applicable NOFA.
1. Should the current definition of
Integrally Involved be revised or
replaced? If so, how should the CDFI
Fund define Integrally Involved?
2. What other factors should the CDFI
Fund consider when determining an
updated definition of Integrally
Involved?
B. Updating the Types of BEA
Qualified Activities: The CDFI Fund is
considering updating the types of
activities eligible for BEA Program
awards. This includes the specific types
of activities currently considered
eligible in the CDFI-Related, Distressed
Community Financing, and Service
Activity categories. The following
activities are eligible CDFI-Related
Activities: Equity-Like Loans (ELL),
Grants (CG), Loans (LNS), CDFI
Deposits/Shares (DS), and Technical
Assistance (TA). The following
activities are eligible Distressed
Community Financing Activities:
Affordable Home Mortgage Loans
(AHM), Affordable Housing
Development Loans and Project
Investments (AHD), Home Improvement
Loans (HIL), Education Loans (EDU),
and Commercial Real Estate Loans and
Project Investments (CRE). The
following activities are eligible Service
Activities: Deposits (D), Community
Services (CS), Financial Services (FS),
Targeted Financial Services (TFS), and
Targeted Retail Savings/Investment
Products (TSP).
1. Should the CDFI Fund revise,
replace, or add to the existing types of
CDFI-Related, Distressed Community
Financing or Service Activities to
include financial products or services
relevant to the current economic
environment? If so, please indicate the
specific type of activity that should be
considered, the reasons why it should
be considered, and to the extent
possible, the benefits of the activity to
residents of Distressed Communities. If
the suggestion is that a particular
PO 00000
Frm 00133
Fmt 4703
Sfmt 4703
64599
activity type be revised or replaced,
please explain why.
C. Pay for Success: The CDFI Fund
has received recent inquiries about
broadening BEA Qualified Activities to
include ‘‘Pay for Success’’ activities.
The objective of the Pay for Success
initiative is to improve social outcomes
while more effectively allocating public
resources, paying for services only when
the desired results of social outcomes
are achieved. Examples of social
outcomes include: academic programs
for disadvantaged youth that accelerate
academic gains; programs that reduce
recidivism rates; and elderly care
services that reduce the number of
elderly individuals placed in costly
nursing home facilities. Pay for Success
has been part of the President’s annual
budget since FY 2012. Pay for Success
activities are typically structured
through contracts between state
agencies and social service providers. A
financial institution can participate in
Pay for Success activities by providing
the funding component. The financial
institution would be reimbursed by the
federal government only if the agreedupon outcomes are achieved and
verified by an external evaluator. Since
the anticipated social outcomes are
achieved over a number of years, Pay for
Success contracts are typically multipleyear commitments.
If a BEA applicant funds a certified
CDFI that administers or supports a Pay
for Success activity, the activity could
qualify as a CDFI-related activity under
the current Interim Rule. The CDFI
Fund is considering revising the
Distressed Community Financing
Activities category to include the
funding component of Pay for Success
activities by FDIC-insured financial
institutions as a qualified activity. An
example of a Pay for Success activity
which could qualify in the Distressed
Community Financing Activities
category, is a loan or investment made
by an FDIC-insured financial institution
to an organization that funds a Pay for
Success activity located in a BEA
Distressed Community. The Applicant
would still need to be a FDIC-insured
financial institution, and the borrower
would still need to be located in a BEA
Distressed Community in order for the
transaction to qualify. Disbursement of
a Pay for Success award would be
contingent upon verification that the
agreed upon social outcomes for which
the award determination was based
have been achieved.
1. Should the CDFI Fund add Pay for
Success activities as an eligible
Distressed Community Financing
Activity? If so, please indicate why. If
not, please indicate why not.
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2. If Pay for Success activities are
added, should the CDFI Fund cap the
amount of BEA Program awards related
to these activities? If so, explain why
and be specific regarding the amount in
award dollars and/or percentage.
3. Would the addition of Pay for
Success activities as an eligible
Distressed Community Financing
Activity incentivize financial
institutions to increase the funding of
Pay for Success activities?
4. Do financial institutions currently
fund Pay for Success activities? If so,
what are the attributes of the financial
institutions? For example, are they
predominately certified-CDFIs,
community banks, minority depository
institutions, small banks, large banks,
etc.?
D. Limitations on Loans or
Investments to Certain Types of
Businesses: The CDFI Fund is
considering prohibiting loans or
investments to certain types of
businesses that otherwise meet other
eligibility criteria from qualifying for the
BEA Program.
1. Should the CDFI Fund prohibit
loans or investments to certain types of
businesses that otherwise meet other
BEA Program eligibility requirements
from qualifying for the BEA Program?
For example, should the CDFI Fund
consider a loan to a liquor store,
gambling facility, etc. that otherwise
meets other BEA Program eligibility
requirements, an ineligible activity? If
so, to which types of businesses should
loans or investments be considered
ineligible? If not, please provide a
specific reason why not. Also, please
discuss the positive or negative impact
that loans or investments to these types
of businesses may have on a Distressed
Community.
E. Award Size: The CDFI Fund has
received feedback regarding the
continued reduction in the maximum
BEA Program award size. Over the past
three years, appropriated funds for the
BEA Program have decreased from $25
million in FY 2010 to approximately
$17.1 million in FY 2013. The CDFI
Fund has continued to make an effort to
award as many Applicants as possible
with available appropriations. In order
to do so, the CDFI Fund has lowered the
award cap in the last three BEA Program
award rounds, reducing the maximum
award amount an individual Applicant
can receive. For example, in FY 2010
the BEA Program was appropriated $25
million and the award cap was
$600,000. In FY 2011, the BEA Program
was appropriated $22 million and the
award cap was $500,000. In FY 2012,
the BEA Program was appropriated $18
million and the award cap was
VerDate Mar<15>2010
18:15 Oct 28, 2013
Jkt 232001
$415,000. The CDFI Fund is particularly
interested in knowing how impactful
BEA Program awards are to: community
banks, certified CDFIs, minority
depository institutions, and Small
Banks based on CRA Asset Size
Classification (assets of less than $296
million as of 12/31/2012).
1. How impactful are BEA Program
awards to the recipient financial
institutions?
2. Should the CDFI Fund consider
making fewer, significantly larger
awards? For example, with an
appropriation of $18 million, the CDFI
Fund could make 18 awards of $1
million each.
3. What other factors should the CDFI
Fund consider regarding the size of BEA
Program awards?
1. Should the CDFI Fund require
Applicants to provide supporting
documentation for loans or investments
of less than $250,000? If so, what type
of supporting documentation should be
required?
2. Would lowering the threshold
amount for requiring supporting
documentation requirements
significantly increase the burden on
Applicants or result in any potential
issues that the CDFI Fund may not have
considered?
3. Should the supporting
documentation requirements apply to
every transaction, to only certain
specific transaction types, or to
transactions of a certain amount?
III. Reporting and Supporting
Documentation
A. Worksheet 2: BEA Report of
Transactions: The CDFI Fund requires
BEA Applicants to complete and submit
Worksheet 2: BEA Report of
Transactions as part of the BEA
application. Worksheet 2: BEA Report of
Transactions captures the transaction
data for the transactions an Applicant
included in its application. The data
currently captured is: (1) Name of
Borrower/Investee/Service Provider; (2)
Total Dollar Value or Amount of
Transactions; (3) Amount Disbursed to
Date; (4) Street Address; (5) City; (6)
State; (7) Zip; (8) Census Tract; (9) Date
of Execution; (10) Date of Initial
Disbursement; (11) Date of Final
Disbursement; (12) Type of Activity;
and (13) Impact.
In addition to the information
currently captured, the CDFI Fund is
considering adding two columns to
Worksheet 2: BEA Report of
Transactions: (1) Description of
Business Financed; and (2) NAICS Code
of the Business Financed. These two
columns would only apply to loans or
investments provided to businesses.
1. Would the addition of these
columns significantly increase the
burden on Applicants or result in any
potential issues that the CDFI Fund may
not have considered?
2. Should the supporting
documentation requirements apply to
every transaction, to only certain
specific transaction types, or to
transactions of a certain amount?
B. Supporting Documentation
Provided by Applicants: The CDFI Fund
currently requires Applicants to provide
supporting documentation for
transactions greater than or equal to
$250,000. The CDFI Fund is considering
changing the supporting documentation
requirements.
A. General Feedback: The CDFI Fund
would also like to obtain general
feedback on the BEA Program and
recognizes that there are other topics
that may not have been addressed in the
questions above, but that are important
to consider. This information is
especially important given that the BEA
Program statute is over 12 years old and
the Program regulations are over three
years old. Please provide any general
feedback on any aspect of the BEA
Program, including but not limited to,
program design, direction, impacts,
performance measures, etc.
PO 00000
Frm 00134
Fmt 4703
Sfmt 4703
IV. Other
Authority: 12 U.S.C. 1834a, 4703, 4703
note, 4713, 4717; 31 U.S.C. 321; 12 CFR part
1806.
Dated: October 23, 2013.
Donna J. Gambrell,
Director, Community Development Financial
Institutions Fund.
[FR Doc. 2013–25622 Filed 10–28–13; 8:45 am]
BILLING CODE 4810–70–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
[Docket ID OCC–2013–0019]
Mutual Savings Association Advisory
Committee
Department of the Treasury,
Office of the Comptroller of the
Currency.
ACTION: Notice of Federal Advisory
Committee Meeting.
AGENCY:
The Office of the Comptroller
of the Currency (OCC) announces a
meeting of the Mutual Savings
Association Advisory Committee
(MSAAC).
SUMMARY:
A public meeting of the MSAAC
will be held on Monday, November 18,
DATES:
E:\FR\FM\29OCN1.SGM
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Agencies
[Federal Register Volume 78, Number 209 (Tuesday, October 29, 2013)]
[Notices]
[Pages 64598-64600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-25622]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Bank Enterprise Award (BEA) Program; Programmatic and
Administrative Aspects; Public Comment Request
AGENCY: Community Development Financial Institutions Fund, Department
of the Treasury.
ACTION: Request for public comment.
-----------------------------------------------------------------------
SUMMARY: This notice invites comments from the public on certain
programmatic and administrative aspects of the Community Development
Financial Institutions Fund's (CDFI Fund) Bank Enterprise Award (BEA)
Program, pursuant to the BEA Program regulations set forth at 12 CFR
part 1806 (the Interim Rule). All materials submitted will be available
for public inspection and copying.
DATES: All comments and submissions must be received by December 30,
2013.
ADDRESSES: Comments should be sent by mail to: CDFI Fund, BEA Program
Office, U.S. Department of the Treasury, 1500 Pennsylvania Ave., NW.,
Washington, DC 20220; by email to bea@cdfi.treas.gov; or by facsimile
at (202) 508-0089. This is not a toll free number.
FOR FURTHER INFORMATION CONTACT: Information regarding the CDFI Fund
and its programs may be downloaded from the CDFI Fund's Web site at
https://www.cdfifund.gov.
SUPPLEMENTARY INFORMATION: Through the BEA Program, the CDFI Fund
encourages Insured Depository Institutions to increase their activities
in the form of loans, investments, services, and technical assistance
provided within Distressed Communities, as well as investments in
Community Development Financial Institutions (CDFIs) through grants,
stock purchases, loans, deposits, and other forms of financial and
technical assistance. The increase in these activities is measured from
a Baseline Period to an Assessment Period. Each capitalized term used
in this Request for Public Comments is more fully defined either in the
Interim Rule or the Notice of Funds Availability for the FY 2013 BEA
Program award round (Federal Register/Vol. 78, No.109) (the NOFA).
Through this notice, the CDFI Fund is seeking comments from the public
regarding certain programmatic and administrative aspects of the CDFI
Fund's BEA Program. Commentators are encouraged to consider, at a
minimum, the following topics:
I. Eligibility
A. CRA Rating: The Community Reinvestment Act (CRA) encourages and
examines efforts to service the banking needs of low- and moderate-
income communities. The CDFI Fund considers a financial institution's
CRA rating a key indicator of its efforts to serve the communities that
it does business in and the effectiveness of those efforts in providing
access to financial products and services to businesses and residents
of those communities, including low-and-moderate income communities.
As stated in Section VII ``Application Review Information'' of the
NOFA, the CDFI Fund may choose not to approve a BEA Program award at
the time of application if the Applicant and/or its affiliates' most
recent overall CRA assessment rating is below ``Satisfactory.'' This
determination is made during the review of the application.
The CDFI Fund is considering making this an ``Eligibility''
requirement (Section III of the NOFA). If implemented, Section III of
the NOFA would inform prospective Applicants that a CRA rating of below
``Satisfactory'' during the Baseline Period or the Assessment Period of
the applicable BEA Program award round will result in ineligibility.
1. Should the CDFI Fund consider an Applicant ineligible if the
Applicant's CRA rating is below ``Satisfactory'' and the CRA
examination date was within the applicable Baseline or Assessment
Period? If so, please indicate why. If not, please provide a specific
reason why not.
2. Should the CDFI Fund consider an Applicant ineligible if the
Applicant's most recent CRA rating is below ``Satisfactory'' but the
CRA examination date was prior to the applicable Baseline or Assessment
Period? If so, please indicate why. If not, please provide a specific
reason why not.
3. Should the CDFI Fund perform additional due diligence to obtain
an update on the status or progress made by the Applicant to improve
its CRA rating prior to making an eligibility determination? If so, in
which of the two scenarios above should additional due diligence be
performed? Should that information be self-reported by the
[[Page 64599]]
Applicant, or provided directly by its Appropriate Federal Banking
Regulatory Agency?
B. Financial Health: The BEA Program requires award recipients to
deploy an amount equivalent to the award received in additional
Qualified Activities in the calendar year following the receipt of the
award. This requirement ensures that all BEA Program award proceeds are
directly invested in distressed communities. Award recipients must
remain in operation in order for their BEA Program award proceeds to be
successfully deployed in Distressed Communities. Therefore, the
financial health of an Applicant is an important factor in making an
award determination. The CDFI Fund considers an audit opinion a key
indicator of the financial health of an Applicant.
As stated in Section VII ``Application Review Information'' of the
NOFA, the CDFI Fund may choose not to approve a BEA Program Award at
the time of application if the Applicant received a going concern
opinion on its most recent audit. This determination is made during the
review of the application.
The CDFI Fund is considering making this an ``Eligibility''
requirement (Section III of the NOFA). If implemented, Section III of
the NOFA would inform prospective Applicants that a going concern audit
opinion during the Baseline Period or the Assessment Period of the
applicable BEA Program award round will result in ineligibility.
1. Should the CDFI Fund consider an Applicant ineligible to apply
for a BEA Program award if the Applicant received a going concern on
its most recent audit report? If not, please provide a specific reason
why not.
2. Is there additional financial health information that the CDFI
Fund should consider in making eligibility determinations? If so,
please describe.
II. Additional Program Considerations
A. Integrally Involved Certified-CDFIs: The Interim Rule defines
CDFI Support Activity as assistance provided by an Applicant or its
Subsidiary to a certified CDFI that meets criteria set forth by the
CDFI Fund in the applicable NOFA, that is Integrally Involved in a
Distressed Community. The NOFA defines Integrally Involved as having
provided: (i) At least 10 percent of financial transactions or dollars
transacted (e.g., loans or Equity Investments as defined in 12 CFR
1805.104(t)), or 10 percent of Development Service activities (as
defined in 12 CFR 1805.104(s)), in the Distressed Community identified
by the Applicant or the CDFI Partner, as applicable, in each of the
three calendar years preceding the date of the applicable NOFA, (ii)
having transacted at least 25 percent of financial transactions (e.g.,
loans or Equity Investments) in said Distressed Community in at least
one of the three calendar years preceding the date of the applicable
NOFA, or (iii) demonstrated that it has attained at least 10 percent of
market share for a particular product in said Distressed Community
(such as at least 10 percent of home mortgages originated in said
Distressed Community) in at least one of the three calendar years
preceding the date of the applicable NOFA.
1. Should the current definition of Integrally Involved be revised
or replaced? If so, how should the CDFI Fund define Integrally
Involved?
2. What other factors should the CDFI Fund consider when
determining an updated definition of Integrally Involved?
B. Updating the Types of BEA Qualified Activities: The CDFI Fund is
considering updating the types of activities eligible for BEA Program
awards. This includes the specific types of activities currently
considered eligible in the CDFI-Related, Distressed Community
Financing, and Service Activity categories. The following activities
are eligible CDFI-Related Activities: Equity-Like Loans (ELL), Grants
(CG), Loans (LNS), CDFI Deposits/Shares (DS), and Technical Assistance
(TA). The following activities are eligible Distressed Community
Financing Activities: Affordable Home Mortgage Loans (AHM), Affordable
Housing Development Loans and Project Investments (AHD), Home
Improvement Loans (HIL), Education Loans (EDU), and Commercial Real
Estate Loans and Project Investments (CRE). The following activities
are eligible Service Activities: Deposits (D), Community Services (CS),
Financial Services (FS), Targeted Financial Services (TFS), and
Targeted Retail Savings/Investment Products (TSP).
1. Should the CDFI Fund revise, replace, or add to the existing
types of CDFI-Related, Distressed Community Financing or Service
Activities to include financial products or services relevant to the
current economic environment? If so, please indicate the specific type
of activity that should be considered, the reasons why it should be
considered, and to the extent possible, the benefits of the activity to
residents of Distressed Communities. If the suggestion is that a
particular activity type be revised or replaced, please explain why.
C. Pay for Success: The CDFI Fund has received recent inquiries
about broadening BEA Qualified Activities to include ``Pay for
Success'' activities. The objective of the Pay for Success initiative
is to improve social outcomes while more effectively allocating public
resources, paying for services only when the desired results of social
outcomes are achieved. Examples of social outcomes include: academic
programs for disadvantaged youth that accelerate academic gains;
programs that reduce recidivism rates; and elderly care services that
reduce the number of elderly individuals placed in costly nursing home
facilities. Pay for Success has been part of the President's annual
budget since FY 2012. Pay for Success activities are typically
structured through contracts between state agencies and social service
providers. A financial institution can participate in Pay for Success
activities by providing the funding component. The financial
institution would be reimbursed by the federal government only if the
agreed-upon outcomes are achieved and verified by an external
evaluator. Since the anticipated social outcomes are achieved over a
number of years, Pay for Success contracts are typically multiple-year
commitments.
If a BEA applicant funds a certified CDFI that administers or
supports a Pay for Success activity, the activity could qualify as a
CDFI-related activity under the current Interim Rule. The CDFI Fund is
considering revising the Distressed Community Financing Activities
category to include the funding component of Pay for Success activities
by FDIC-insured financial institutions as a qualified activity. An
example of a Pay for Success activity which could qualify in the
Distressed Community Financing Activities category, is a loan or
investment made by an FDIC-insured financial institution to an
organization that funds a Pay for Success activity located in a BEA
Distressed Community. The Applicant would still need to be a FDIC-
insured financial institution, and the borrower would still need to be
located in a BEA Distressed Community in order for the transaction to
qualify. Disbursement of a Pay for Success award would be contingent
upon verification that the agreed upon social outcomes for which the
award determination was based have been achieved.
1. Should the CDFI Fund add Pay for Success activities as an
eligible Distressed Community Financing Activity? If so, please
indicate why. If not, please indicate why not.
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2. If Pay for Success activities are added, should the CDFI Fund
cap the amount of BEA Program awards related to these activities? If
so, explain why and be specific regarding the amount in award dollars
and/or percentage.
3. Would the addition of Pay for Success activities as an eligible
Distressed Community Financing Activity incentivize financial
institutions to increase the funding of Pay for Success activities?
4. Do financial institutions currently fund Pay for Success
activities? If so, what are the attributes of the financial
institutions? For example, are they predominately certified-CDFIs,
community banks, minority depository institutions, small banks, large
banks, etc.?
D. Limitations on Loans or Investments to Certain Types of
Businesses: The CDFI Fund is considering prohibiting loans or
investments to certain types of businesses that otherwise meet other
eligibility criteria from qualifying for the BEA Program.
1. Should the CDFI Fund prohibit loans or investments to certain
types of businesses that otherwise meet other BEA Program eligibility
requirements from qualifying for the BEA Program? For example, should
the CDFI Fund consider a loan to a liquor store, gambling facility,
etc. that otherwise meets other BEA Program eligibility requirements,
an ineligible activity? If so, to which types of businesses should
loans or investments be considered ineligible? If not, please provide a
specific reason why not. Also, please discuss the positive or negative
impact that loans or investments to these types of businesses may have
on a Distressed Community.
E. Award Size: The CDFI Fund has received feedback regarding the
continued reduction in the maximum BEA Program award size. Over the
past three years, appropriated funds for the BEA Program have decreased
from $25 million in FY 2010 to approximately $17.1 million in FY 2013.
The CDFI Fund has continued to make an effort to award as many
Applicants as possible with available appropriations. In order to do
so, the CDFI Fund has lowered the award cap in the last three BEA
Program award rounds, reducing the maximum award amount an individual
Applicant can receive. For example, in FY 2010 the BEA Program was
appropriated $25 million and the award cap was $600,000. In FY 2011,
the BEA Program was appropriated $22 million and the award cap was
$500,000. In FY 2012, the BEA Program was appropriated $18 million and
the award cap was $415,000. The CDFI Fund is particularly interested in
knowing how impactful BEA Program awards are to: community banks,
certified CDFIs, minority depository institutions, and Small Banks
based on CRA Asset Size Classification (assets of less than $296
million as of 12/31/2012).
1. How impactful are BEA Program awards to the recipient financial
institutions?
2. Should the CDFI Fund consider making fewer, significantly larger
awards? For example, with an appropriation of $18 million, the CDFI
Fund could make 18 awards of $1 million each.
3. What other factors should the CDFI Fund consider regarding the
size of BEA Program awards?
III. Reporting and Supporting Documentation
A. Worksheet 2: BEA Report of Transactions: The CDFI Fund requires
BEA Applicants to complete and submit Worksheet 2: BEA Report of
Transactions as part of the BEA application. Worksheet 2: BEA Report of
Transactions captures the transaction data for the transactions an
Applicant included in its application. The data currently captured is:
(1) Name of Borrower/Investee/Service Provider; (2) Total Dollar Value
or Amount of Transactions; (3) Amount Disbursed to Date; (4) Street
Address; (5) City; (6) State; (7) Zip; (8) Census Tract; (9) Date of
Execution; (10) Date of Initial Disbursement; (11) Date of Final
Disbursement; (12) Type of Activity; and (13) Impact.
In addition to the information currently captured, the CDFI Fund is
considering adding two columns to Worksheet 2: BEA Report of
Transactions: (1) Description of Business Financed; and (2) NAICS Code
of the Business Financed. These two columns would only apply to loans
or investments provided to businesses.
1. Would the addition of these columns significantly increase the
burden on Applicants or result in any potential issues that the CDFI
Fund may not have considered?
2. Should the supporting documentation requirements apply to every
transaction, to only certain specific transaction types, or to
transactions of a certain amount?
B. Supporting Documentation Provided by Applicants: The CDFI Fund
currently requires Applicants to provide supporting documentation for
transactions greater than or equal to $250,000. The CDFI Fund is
considering changing the supporting documentation requirements.
1. Should the CDFI Fund require Applicants to provide supporting
documentation for loans or investments of less than $250,000? If so,
what type of supporting documentation should be required?
2. Would lowering the threshold amount for requiring supporting
documentation requirements significantly increase the burden on
Applicants or result in any potential issues that the CDFI Fund may not
have considered?
3. Should the supporting documentation requirements apply to every
transaction, to only certain specific transaction types, or to
transactions of a certain amount?
IV. Other
A. General Feedback: The CDFI Fund would also like to obtain
general feedback on the BEA Program and recognizes that there are other
topics that may not have been addressed in the questions above, but
that are important to consider. This information is especially
important given that the BEA Program statute is over 12 years old and
the Program regulations are over three years old. Please provide any
general feedback on any aspect of the BEA Program, including but not
limited to, program design, direction, impacts, performance measures,
etc.
Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713, 4717; 31
U.S.C. 321; 12 CFR part 1806.
Dated: October 23, 2013.
Donna J. Gambrell,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2013-25622 Filed 10-28-13; 8:45 am]
BILLING CODE 4810-70-P