Bank Enterprise Award Program, 52741-52750 [2016-18694]

Agencies

• Community Development Financial Institutions Fund
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 81, Number 154 (Wednesday, August 10, 2016)]
[Rules and Regulations]
[Pages 52741-52750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18694]



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Rules and Regulations
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Federal Register / Vol. 81, No. 154 / Wednesday, August 10, 2016 / 
Rules and Regulations

[[Page 52741]]



DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund

12 CFR Part 1806

RIN 1505-AA91


Bank Enterprise Award Program

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

ACTION: Interim rule with request for public comment.

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SUMMARY: The Department of the Treasury is issuing a revised interim 
rule implementing the Bank Enterprise Award Program (BEA Program), 
administered by the Community Development Financial Institutions Fund 
(CDFI Fund). This revised interim rule reflects the CDFI Fund's 
programmatic decision to create two subcategories within the Distressed 
Community Financing Activities category of Qualified Activities in 
order to differentiate between: Consumer Loans and Commercial Loans and 
Investments. This revised interim rule includes revisions necessary to 
implement this modification to the Distressed Community Financing 
Activities category, as well as to make certain technical corrections 
and other updates to the current rule.

DATES: Effective date: August 10, 2016. All comments must be written 
and must be received in the offices of the CDFI Fund on or before 
October 11, 2016.

ADDRESSES: You may submit comments concerning this revised interim rule 
via the Federal e-Rulemaking Portal at https://www.regulations.gov 
(please follow the instructions for submitting comments). All 
submissions received must include the agency name and Regulatory 
Information Number (RIN) for this rulemaking. Other information 
regarding the CDFI Fund and its programs may be obtained through the 
CDFI Fund's Web site at https://www.cdfifund.gov.

FOR FURTHER INFORMATION CONTACT: Robert Ibanez, BEA Program Manager, 
Community Development Financial Institutions Fund, at 
bea@cdfi.treas.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    The CDFI Fund, Department of the Treasury, was authorized by the 
Community Development Banking and Financial Institutions Act of 1994, 
as amended (12 U.S.C. 4701 et seq.) (the Act). The mission of the CDFI 
Fund is to expand economic opportunity for underserved people and 
communities by supporting the growth and capacity of a national network 
of community development lenders, investors, and financial service 
providers. Its vision is an America in which all people and communities 
have access to the investment capital and financial services they need 
to prosper. The BEA Program provides awards to depository institutions, 
insured by the Federal Deposit Insurance Corporation (FDIC), that 
demonstrate an increase in their activities in the form of loans, 
investments, services, and Technical Assistance, in Distressed 
Communities and provide financial assistance to Community Development 
Financial Institutions (CDFIs) through grants, stock purchases, loans, 
deposits, and other forms of financial and technical assistance.
    Through the BEA Program, the CDFI Fund seeks to: strengthen and 
expand the financial and organizational capacity of CDFIs; provide 
monetary awards to insured depository institutions that increase their 
lending and financial services in Distressed Communities; and increase 
the flow of private capital into Low- and Moderate-Income areas. 
Applicants participate in the BEA Program through a competitive 
application process in which the CDFI Fund evaluates Applicants based 
on the value of their increases in certain Qualified Activities. BEA 
Program award Recipients receive award proceeds in the form of a grant 
after successful completion of specified Qualified Activities.
    The CDFI Fund has determined that, under the current rule, 
Applicants may be disproportionately incentivized to engage in 
commercial lending activities under the Distressed Community Financing 
Activity category. Increases in lending for commercial purposes have 
consistently been reported at higher levels in BEA Program applications 
than lending to residents of Distressed Communities, likely due to the 
larger average size of commercial versus consumer transactions, which 
makes Applicants potentially eligible for larger BEA Program awards. 
Currently, the Distressed Community Financing Activity category of 
Qualified Activities consists of seven individual activity-types 
(Affordable Housing Loans, Small Dollar Consumer Loans, Home 
Improvement Loans, Education Loans, Affordable Housing Development 
Loans, Small Business Loans, and Commercial Real Estate Loans). Under 
the current rule, Applicants report at the activity-type level for 
Distressed Community Financing Activities, and may choose to report 
lending for only those activity types within the category that had an 
increase. This disaggregated method of reporting often does not provide 
a complete and accurate reflection of the Applicant's net increase in 
lending to businesses and residents in Distressed Communities, as 
intended by the Act, because an Applicant's lending typically reflects 
multiple activity types. This revised interim rule creates two 
subcategories within the Distressed Community Financing Activities 
category in order to differentiate between: (1) Consumer Loans and (2) 
Commercial Loans and Investments. Consumer Loans consist of: Affordable 
Housing Loans, Small Dollar Consumer Loans, Home Improvement Loans, and 
Education Loans. Commercial Loans and Investments consist of: 
Affordable Housing Development Loans, Small Business Loans, and 
Commercial Real Estate Loans. Applicants will be required to aggregate 
Baseline Period and Assessment Period amounts at the subcategory 
levels. In order to substantiate the aggregate amounts reported, 
Applicants will continue to be required to submit individual 
transactions at the activity-type level. This regulatory change seeks 
to increase incentives for Applicants' lending to consumers in 
Distressed Communities and to ensure that Applicants provide complete 
and accurate information regarding their Distressed Community Financing 
Activities.

[[Page 52742]]

    On May 5, 2015, the CDFI Fund published in the Federal Register an 
interim rule (80 FR 25581) implementing the BEA Program. The deadline 
for submission of comments was July 3, 2015.

II. Comments on the May 5, 2015, Interim Rule

    As of the close of the July 3, 2015 comment period, the CDFI Fund 
received no comments on the current rule.

III. Summary of Changes

    A. Subpart A: In subpart A, Sec.  1806.103, Definitions, various 
changes and updates were made to the defined terms in the rule. 
Throughout the revised interim rule, the defined term ``Qualified 
Activity'' has been replaced by ``Eligible Activity'' in those 
instances where the intention is to define authorized uses of BEA 
Program awards by Recipients as opposed to defining Qualified 
Activities that are completed and reported by Applicants seeking to 
receive awards. This change will provide greater clarity to Applicants 
regarding the requirements to receive and use BEA Program awards.
    The term ``CDFI Support Activity'' is revised in Sec.  1806.103 to 
remove the specific criteria for ``deposits'' as such criteria will now 
be specified in the applicable NOFA. This will allow the CDFI Fund 
greater flexibility in adapting these criteria to market changes. New 
definitions have been added in Sec.  1806.103 for ``Commercial Loans 
and Investments'' and ``Consumer Loans,'' the two new subcategories 
under the Distressed Community Financing Activities category. The term 
``Community Services'' has been revised to allow the CDFI Fund the 
discretion to specify activities that are comparable to Community 
Services in the applicable NOFA. This will allow the CDFI Fund greater 
flexibility to adapt this listing to reflect developments in banking 
community activities. The term ``Development Service Activities'' has 
been revised to allow the CDFI Fund the discretion to specify any 
activities that are comparable to Development Service Activities in the 
applicable NOFA, again providing greater flexibility for the CDFI Fund 
to adapt to market developments.
    In order to better align the defined individual beneficiaries of 
various Qualified and Eligible Activities with BEA Program goals, the 
CDFI Fund in this revised interim rule has clarified where such 
beneficiaries must be Eligible Residents and where they must be 
Eligible Residents that also meet BEA Program Low- and Moderate-Income 
requirements. ``Education Loan'' is revised in Sec.  1806.103 to ensure 
that the borrower is an Eligible Resident who meets Low- and Moderate-
Income requirements. ``Financial Services'' is revised in Sec.  
1806.103 to remove the requirement that an Eligible Resident receiving 
such services must also meet Low- and Moderate-Income requirements. 
``Individual Development Account'' has been revised in Sec.  1806.103 
to clarify that holders of such accounts must be Eligible Residents who 
meet Low- and Moderate-Income requirements. The term ``Small Dollar 
Consumer Loan'' has been revised in Sec.  1806.103 to ensure that the 
borrower is an Eligible Resident who meets Low- and Moderate-Income 
requirements. The term ``Targeted Financial Services'' is revised in 
Sec.  1806.103 to remove the requirement that an Eligible Resident 
receiving such services must also meet Low- and Moderate-Income 
requirements. ``Targeted Retail Savings/Investment Products'' has been 
revised in Sec.  1806.103 to remove the requirement that such products 
be targeted to an Eligible Resident who also meets Low- and Moderate-
Income requirements. ``Low- and Moderate-Income'' is revised in Sec.  
1806.103 to better align with the CDFI Fund's definition of the term 
across its other programs. The term ``Priority Factor'' has been 
revised in Sec.  1806.103 to incorporate the newly-designated 
subcategories under Distressed Community Financing Activities.
    B. Subpart C: The title of subpart C has been revised to ``Use of 
Funds/Eligible Activities.''
    C. Subpart D: In subpart D, Sec.  1806.401(a), minor revisions have 
been made in order to clarify that the section references Qualified 
Activities conducted by an Applicant prior to award rather than future 
activities proposed by an Applicant. Section 1806.402(b) has been 
revised to implement the two new subcategories under the Distressed 
Community Financing Activities category--Consumer Loans or Commercial 
Loans and Investments. Under the revised language, if an Applicant 
chooses to report transactions on any single activity type in either 
subcategory, the Applicant must report its overall increase on all 
activity types within that subcategory. Section 1806.402(c) has been 
revised to remove the requirement that when activities serving a 
Distressed Community are provided to an Eligible Resident, the resident 
must also meet Low- and Moderate-Income requirements. Section 
1806.403(c) has been revised to provide a basic formula for calculating 
the estimated award amount for Qualified Activities.
    Section 1806.405(b) has been revised to reflect the transition from 
paper to electronic submission of certain application components. This 
section has also been revised in 1806.405(b)(6)(ii) to remove a 
redundant reference to ``Eligible Residents that resided in a 
Distressed Community,'' where the definition of Eligible Residents 
already requires that they reside in a Distressed Community.

IV. Rulemaking Analysis

A. Executive Order (E.O.) 12866

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

B. 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.

C. Paperwork Reduction Act

    The collections of information contained in this revised interim 
rule have been previously reviewed and approved by OMB in accordance 
with the Paperwork Reduction Act of 1995 and assigned the applicable 
OMB Control Number associated with the CDFI Fund under 1559. 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. The revised interim rule imposes collections of new 
information, for which the CDFI Fund has OMB approval.

D. National Environmental Policy Act

    The revised interim rule has been reviewed in accordance with the 
CDFI Fund's Environmental Quality regulations (12 CFR part 1815), 
promulgated pursuant to the National Environmental Protection Act of 
1969 (NEPA), which requires that the CDFI Fund adequately consider the 
cumulative impact that proposed activities have upon the human 
environment. It is the determination of the CDFI Fund that the revised 
interim rules 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, neither 
an Environmental Assessment nor an Environmental Impact Statement is 
required.

E. Administrative Procedure Act

    Because the revisions to this revised interim rule relate to 
grants, notice and

[[Page 52743]]

public procedure and a delayed effective date are not required pursuant 
to the Administrative Procedure Act found at 5 U.S.C. 553(a)(2).

F. Comment

    Public comment is solicited on all aspects of this interim rule. 
The CDFI Fund will consider all comments made on the substance of this 
interim rule, but it does not intend to hold hearings.

G. Catalog of Federal Domestic Assistance Number

    Bank Enterprise Award Program--21.021.

List of Subjects in 12 CFR Part 1806

    Banks, banking, Community development, Grant programs--housing and 
community development, Reporting and recordkeeping requirements, 
Savings associations.

    For the reasons set forth in the preamble, 12 CFR part 1806 is 
revised to read as follows:

PART 1806--BANK ENTERPRISE AWARD PROGRAM

Subpart A--General Provisions
1806.100 Purpose.
1806.101 Summary.
1806.102 Relationship to other CDFI Fund programs.
1806.103 Definitions.
1806.104 Uniform Administrative Requirements; waiver authority.
1806.105 OMB control number.
Subpart B--Eligibility
1806.200 Applicant eligibility.
Subpart C--Use of Funds/Eligible Activities
1806.300 Eligible Activities.
1806.301 Restrictions on use of award.
Subpart D--Award Determinations
1806.400 General.
1806.401 Community eligibility and designation.
1806.402 Measuring and reporting Qualified Activities.
1806.403 Estimated award amounts.
1806.404 Selection process; actual award amounts.
1806.405 Applications for BEA Program Awards.
Subpart E--Terms and Conditions of Assistance
1806.500 Award Agreement; sanctions.
1806.501 Compliance with government requirements.
1806.502 Fraud, waste, and abuse.
1806.503 Books of account, records, and government access.
1806.504 Retention of records.

    Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713, 4717; 31 
U.S.C. 321.

Subpart A--General Provisions


Sec.  1806.100  Purpose.

    The purpose of the Bank Enterprise Award (BEA) Program is to 
provide grants to Insured Depository Institutions that provide 
financial and technical assistance to Community Development Financial 
Institutions and increase their activities in Distressed Communities.


Sec.  1806.101  Summary.

    Through the BEA Program, the CDFI Fund will provide monetary awards 
in the form of grants to Applicants selected by the CDFI Fund that 
increase their investments in or provide other support of CDFIs, 
increase their lending and investment activities in Distressed 
Communities, or increase their provision of certain services and 
assistance. Distressed Communities must meet minimum geographic, 
poverty, and unemployment criteria. Applicants are selected to receive 
BEA Program Awards through a merit-based, competitive application 
process. The amount of a BEA Program Award is based on the increase in 
Qualified Activities that are carried out by the Applicant during the 
Assessment Period. BEA Program Awards are disbursed by the CDFI Fund 
after the Recipient has successfully completed projected Qualified 
Activities. Each Recipient will enter into an Award Agreement, which 
will require it to abide by terms and conditions pertinent to any 
assistance received under this part, including the requirement that BEA 
Program Award proceeds must be used for Eligible Activities, and in 
accordance with the Uniform Administrative Requirements, as applicable. 
All BEA Program Awards are made subject to funding availability.


Sec.  1806.102  Relationship to other CDFI Fund programs.

    (a) Restrictions using BEA Program Award in conjunction with other 
awards. (1) Restrictions are in place on applying for, receiving, and 
using BEA Program Awards in conjunction with awards under other 
programs administered by the CDFI Fund.
    (2) Other programs include, but not limited to, the Capital Magnet 
Fund, the CDFI Program, the CDFI Bond Guarantee Program, the Native 
American CDFI Assistance Program, and the New Markets Tax Credit 
Program, are as set forth in the applicable notice of funding 
opportunity or Notice of Allocation Availability.
    (b) Prohibition against double funding. (1) Qualified Activities 
may not include transactions funded in whole or in part with award 
proceeds from another CDFI Fund program or Federal program.
    (2) An Applicant that is a CDFI may not receive a BEA Program 
Award, either directly or through a community partnership if it has:
    (i) Received a CDFI Program award within the preceding 12-month 
period, or has a CDFI Program application pending; or
    (ii) Ever received a CDFI Program award based on the same activity 
during the same semiannual period for which the institution seeks a BEA 
Program Award.


Sec.  1806.103   Definitions.

    For purposes of this part, the following terms shall have the 
following definitions:
    Act means the Community Development Banking and Financial 
Institutions Act of 1994, as amended (12 U.S.C. 4701 et seq.);
    Affordable Housing Development Loan means origination of a loan to 
finance the acquisition, construction, and/or development of single- or 
multi-family residential real property, where at least 60 percent of 
the units in such property are affordable, as may be defined in the 
applicable NOFA, to Eligible Residents who meet Low- and Moderate-
Income requirements;
    Affordable Housing Loan means origination of a loan to finance the 
purchase or improvement of the borrower's primary residence, and that 
is secured by such property, where such borrower is an Eligible 
Resident who meets Low- and Moderate-Income requirements. Affordable 
Housing Loan may also refer to second (or otherwise subordinated) liens 
or ``soft second'' mortgages and other similar types of down payment 
assistance loans, but may not necessarily be secured by such property 
originated for the purpose of facilitating the purchase or improvement 
of the borrower's primary residence, where such borrower is an Eligible 
Resident who meets Low- and Moderate-Income requirements;
    Applicant means any insured depository institution (as defined in 
section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813)) 
that is applying for a Bank Enterprise Award;
    Appropriate Federal Banking Agency has the same meaning as in 
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
    Assessment Period means an annual or semi-annual period specified 
in the applicable NOFA in which an Applicant will carry out, or has 
carried out, Qualified Activities;

[[Page 52744]]

    Award Agreement means a formal agreement between the CDFI Fund and 
a Recipient pursuant to Sec.  1806.500;
    Bank Enterprise Award (or BEA Program Award) means an award made to 
an Applicant pursuant to this part;
    Bank Enterprise Award Program (or BEA Program) means the program 
authorized by section 114 of the Act and implemented under this part;
    Baseline Period means an annual or a semi-annual period specified 
in the applicable NOFA, in which an Applicant has previously carried 
out Qualified Activities;
    CDFI Partner means a CDFI that has been provided assistance in the 
form of CDFI Related Activities by an unaffiliated Applicant;
    CDFI Related Activities means Equity Investments, Equity-Like Loans 
and CDFI Support Activities;
    CDFI Support Activity means assistance provided by an Applicant or 
its Subsidiary to a CDFI that meets criteria set forth by the CDFI Fund 
in the applicable NOFA and that is Integrally Involved in a Distressed 
Community, in the form of the origination of a loan, Technical 
Assistance, or deposits, as further specified in the applicable NOFA;
    Commercial Loans and Investments means the following lending 
activity types: Affordable Housing Development Loans and related 
Project Investments; Small Business Loans and related Project 
Investments; and Commercial Real Estate Loans and related Project 
Investments;
    Commercial Real Estate Loan means an origination of a loan (other 
than an Affordable Housing Development Loan or Affordable Housing Loan) 
that is secured by real estate and used to finance the acquisition or 
rehabilitation of a building in a Distressed Community, or the 
acquisition, construction and or development of property in a 
Distressed Community, used for commercial purposes;
    Community Development Financial Institution (or CDFI) means an 
entity that has been certified as a CDFI by the CDFI Fund as of the 
date specified in the applicable NOFA;
    Community Development Financial Institutions Fund (or CDFI Fund) 
means the Community Development Financial Institutions Fund established 
pursuant to section 104(a)(12 U.S.C. 4703(a)) of the Act;
    Community Services means the following forms of assistance provided 
by officers, employees or agents (contractual or otherwise) of the 
Applicant:
    (1) Provision of Technical Assistance and financial education to 
Eligible Residents regarding managing their personal finances;
    (2) Provision of Technical Assistance and consulting services to 
newly formed small businesses and nonprofit organizations located in 
the Distressed Community;
    (3) Provision of Technical Assistance and financial education to, 
or servicing the loans of, homeowners who are Eligible Residents and 
meet Low- and Moderate-Income requirements; and
    (4) Other services provided to Eligible Residents who meet Low- and 
Moderate-Income requirements or enterprises that are Integrally 
Involved in a Distressed Community, as deemed appropriate by the CDFI 
Fund, and other comparable services as may be specified by the CDFI 
Fund in the applicable NOFA;
    Consumer Loans means the following lending activity types: 
Affordable Housing Loans; Education Loans; Home Improvement Loans; and 
Small Dollar Consumer Loans;
    Deposit Liabilities means time or savings deposits or demand 
deposits. Any such deposit must be accepted from Eligible Residents at 
the offices of the Applicant or of the Subsidiary of the Applicant and 
located in the Distressed Community. Deposit Liabilities may only 
include deposits held by individuals in transaction accounts (e.g., 
demand deposits, negotiable order of withdrawal accounts, automated 
transfer service accounts, and telephone or preauthorized transfer 
accounts) or non-transaction accounts (e.g., money market deposit 
accounts, other savings deposits, and all time deposits), as defined by 
the Appropriate Federal Banking Agency;
    Development Service Activities means activities that promote 
community development and are integral to the Applicant's provision of 
financial products and Financial Services. Such services shall prepare 
or assist current or potential borrowers or investees to utilize the 
financial products or Financial Services of the Applicant. Development 
Service Activities include financial or credit counseling to 
individuals for the purpose of facilitating home ownership, promoting 
self-employment, or enhancing consumer financial management skills; or 
technical assistance to borrowers or investees for the purpose of 
enhancing business planning, marketing, management, financial 
management skills, and other comparable services as may be specified by 
the CDFI Fund in the applicable NOFA.
    Distressed Community means a geographically defined community that 
meets the minimum area eligibility requirements specified in Sec.  
1806.401 and such additional criteria as may be set forth in the 
applicable NOFA;
    Distressed Community Financing Activities means:
    (1) Consumer Loans; or
    (2) Commercial Loans and Investments;
    Education Loan means an advance of funds to a student who is an 
Eligible Resident who meets Low- and Moderate-Income requirements for 
the purpose of financing a college or vocational education;
    Electronic Transfer Account (or ETA) means an account that meets 
the following requirements, and with respect to which the Applicant has 
satisfied the requirements:
    (1) Be an individually owned account at a Federally insured 
financial institution;
    (2) Be available to any individual who receives a Federal benefit, 
wage, salary, or retirement payment;
    (3) Accept electronic Federal benefit, wage, salary, and retirement 
payments and such other deposits as a financial institution agrees to 
permit;
    (4) Be subject to a maximum price of $3.00 per month;
    (5) Have a minimum of four cash withdrawals and four balance 
inquiries per month, to be included in the monthly fee, through:
    (i) The financial institution's proprietary (on-us) automated 
teller machines (ATMs);
    (ii) Over-the-counter transactions at the main office or a branch 
of the financial institution; or
    (iii) Any combination of on-us ATM access and over-the-counter 
access at the option of the financial institution;
    (6) Provide the same consumer protections that are available to 
other account holders at the financial institution, including, for 
accounts that provide electronic access, Regulation E (12 CFR part 205) 
protections regarding disclosure, limitations on liability, procedures 
for reporting lost or stolen cards, and procedures for error 
resolution;
    (7) For financial institutions that are members of an on-line 
point-of-sale (POS) network, allow on-line POS purchases, cash 
withdrawals, and cash back with purchases at no additional charge by 
the financial institution offering the ETA;
    (8) Require no minimum balance, except as required by Federal or 
State law;
    (9) At the option of the financial institution, be either an 
interest-bearing or a non-interest-bearing account; and
    (10) Provide a monthly statement.
    Eligible Activities means CDFI Related Activities, Distressed 
Community

[[Page 52745]]

Financing Activities, and Service Activities, and as further described 
in the applicable NOFA and the Award Agreement;
    Eligible Resident means an individual who resides in a Distressed 
Community;
    Equity Investment means financial assistance provided by an 
Applicant or its Subsidiary to a CDFI, which CDFI meets such criteria 
as set forth in the applicable NOFA, in the form of a grant, a stock 
purchase, a purchase of a partnership interest, a purchase of a limited 
liability company membership interest, or any other investment deemed 
to be an Equity Investment by the CDFI Fund;
    Equity-Like Loan means a loan provided by an Applicant or its 
Subsidiary to a CDFI, and made on such terms that it has 
characteristics of an Equity Investment that meets such criteria as set 
forth in the applicable NOFA;
    Financial Services means check-cashing, providing money orders and 
certified checks, automated teller machines, safe deposit boxes, new 
branches, and other comparable services as may be specified by the CDFI 
Fund in the applicable NOFA, that are provided by the Applicant to 
Eligible Residents or enterprises that are Integrally Involved in the 
Distressed Community;
    Geographic Units means counties (or equivalent areas), incorporated 
places, minor civil divisions that are units of local government, 
census tracts, block numbering areas, block groups, and Indian Areas or 
Native American Areas (as each is defined by the U.S. Bureau of the 
Census), or other areas deemed appropriate by the CDFI Fund;
    Home Improvement Loan means an advance of funds, either unsecured 
or secured by a one-to-four family residential property, the proceeds 
of which are used to improve the borrower's primary residence, where 
such borrower is an Eligible Resident who meets Low- and Moderate-
Income requirements;
    Indian Reservation means a geographic area that meets the 
requirements of section 4(10) of the Indian Child Welfare Act of 1978 
(25 U.S.C. 1903(10)), and shall include land held by incorporated 
Native groups, regional corporations, and village corporations, as 
defined in and pursuant to the Alaska Native Claims Settlement Act (43 
U.S.C. 1601 et seq.), public domain Indian allotments, and former 
Indian Reservations in the State of Oklahoma;
    Individual Development Account (or IDA) means a special savings 
account that matches the deposits of Eligible Residents who meet Low- 
and Moderate-Income requirements individuals and that enables such 
individuals to save money for a particular financial goal including, 
but not limited to, and as determined by the CDFI Fund: buying a home, 
paying for post-secondary education, or starting or expanding a small 
business;
    Insured Depository Institution means any bank or thrift, the 
deposits of which are insured by the Federal Deposit Insurance 
Corporation;
    Integrally Involved means, for a CDFI Partner, having provided or 
transacted the percentage of financial transactions or dollars (i.e., 
loans or Equity Investments), or Development Service Activities, in the 
Distressed Community identified by the Applicant or the CDFI Partner, 
as applicable, or having attained the percentage of market share for a 
particular product in a Distressed Community, set forth in the 
applicable NOFA;
    Low- and Moderate-Income or Low- and Moderate-Income requirements 
means borrower income that does not exceed 80 percent of the median 
income of the area involved, according to the U.S. Census Bureau data, 
set forth in the Applicable NOFA;
    Metropolitan Area means an area designated as such (as of the date 
of the BEA Program application) by the Office of Management and Budget 
pursuant to 44 U.S.C. 3504(e)(3), 31 U.S.C. 1104(d), and Executive 
Order 10253 (3 CFR, 1949-1953 Comp., p. 758), as amended;
    Notice of Funding Availability (or NOFA) means the public notice of 
funding opportunity that announces the availability of BEA Program 
Award funds for a particular funding round and that advises prospective 
Applicants with respect to obtaining application materials, establishes 
application submission deadlines, and establishes other requirements or 
restrictions applicable for the particular funding round;
    Priority Factor means a numeric value assigned to the following, as 
established by the CDFI Fund in the applicable NOFA:
    (1) Each subcategory within the Distressed Community Financing 
Activities category of Qualified Activities; or
    (2) Each activity-type within the Service Activities and CDFI 
Related Activities categories of Qualified Activities.
    (3) A priority factor represents the CDFI Fund's assessment of the 
degree of difficulty, the extent of innovation, and the extent of 
benefits accruing to the Distressed Community for each type of 
activity;
    Project Investment means providing financial assistance in the form 
of a purchase of stock, limited partnership interest, other ownership 
instrument, or a grant to an entity that is Integrally Involved in a 
Distressed Community and formed for the sole purpose of engaging in a 
project or activity (approved by the CDFI Fund), including Affordable 
Housing Development Loans, Affordable Housing Loans, Commercial Real 
Estate Loans, and Small Business Loans;
    Qualified Activities means CDFI Related Activities, Distressed 
Community Financing Activities, and Service Activities;
    Recipient means an Applicant that receives a BEA Program Award 
pursuant to this part and the applicable NOFA;
    Service Activities means the following activities: Deposit 
Liabilities; Financial Services; Community Services; Targeted Financial 
Services; and Targeted Retail Savings/Investment Products;
    Small Business Loan means an origination of a loan used for 
commercial or industrial activities (other than an Affordable Housing 
Loan, Affordable Housing Development Loan, Commercial Real Estate Loan, 
Home Improvement Loan) to a business or farm that meets the size 
eligibility standards of the Small Business Administration's 
Development Company or Small Business Investment Company programs (13 
CFR 121.301) and is located in a Distressed Community;
    Small Dollar Consumer Loan means affordable consumer lending 
products that serve as available alternatives in the marketplace for 
individuals who are Eligible Residents who meet Low- and Moderate-
Income requirements and meet criteria further specified in the 
applicable NOFA;
    State means any State of the United States, the District of 
Columbia or any territory of the United States, Puerto Rico, Guam, 
American Samoa, the Virgin Islands, and the Northern Mariana Islands;
    Subsidiary has the same meaning as in section 3 of the Federal 
Deposit Insurance Act, except that a CDFI shall not be considered a 
Subsidiary of any Insured Depository Institution or any depository 
institution holding company that controls less than 25 percent of any 
class of the voting shares of such corporation and does not otherwise 
control, in any manner, the election of a majority of directors of the 
corporation;
    Targeted Financial Services means ETAs, IDAs, and such other 
banking products targeted to Eligible Residents,

[[Page 52746]]

as may be specified by the CDFI Fund in the applicable NOFA;
    Targeted Retail Savings/Investment Products means certificates of 
deposit, mutual funds, life insurance, and other similar savings or 
investment vehicles targeted to Eligible Residents, as may be specified 
by the CDFI Fund in the applicable NOFA;
    Technical Assistance means the provision of consulting services, 
resources, training, and other nonmonetary support relating to an 
organization, individual, or operation of a trade or business, as may 
be specified by the CDFI Fund in the applicable NOFA; and
    Unit of General Local Government means any city, county town, 
township, parish, village, or other general-purpose political 
subdivision of a State or Commonwealth of the United States, or 
general-purpose subdivision thereof, and the District of Columbia.


Sec.  1806.104  Uniform Administrative Requirements; waiver authority.

    (a) Uniform Administrative Requirements. The Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards (Uniform Administrative Requirements), codified by the 
Department of the Treasury at 2 CFR part 1000, apply to awards, 
regardless of type of award Recipient, made pursuant to this part.
    (b) Waiver authority. The CDFI Fund may waive any requirement of 
this part that is not required by law, upon a determination of good 
cause. Each such waiver will be in writing and supported by a statement 
of the facts and grounds forming the basis of the waiver. For a waiver 
in any individual case, the CDFI Fund must determine that application 
of the requirement to be waived would adversely affect the achievement 
of the purposes of the Act. For waivers of general applicability, the 
CDFI Fund will publish notification of granted waivers in the Federal 
Register.


Sec.  1806.105  OMB control number.

    The collections of information contained in this part have been 
reviewed and approved by the Office of Management and Budget (OMB) in 
accordance with the Paperwork Reduction Act of 1995 and assigned the 
applicable, approved OMB Control Numbers associated with the CDFI Fund 
under 1559.

Subpart B--Eligibility


Sec.  1806.200  Applicant eligibility.

    An entity that is an Insured Depository Institution is eligible to 
apply for a BEA Program Award if the CDFI Fund receives a complete BEA 
Program Award application by the deadline set forth in the applicable 
Notice of Funding Availability (NOFA). Additional eligibility 
requirements are set forth in the applicable NOFA.

Subpart C--Use of Funds/Eligible Activities


Sec.  1806.300  Eligible Activities.

    Recipients of BEA Program Awards must use their payments for the 
following Eligible Activities:
    (a) CDFI Related Activities;
    (b) Distressed Community Financing Activities; and
    (c) Service Activities, and to comply with the Uniform 
Administrative Requirements as further described in the applicable NOFA 
and the Award Agreement.


Sec.  1806.301  Restrictions of use of award.

    A Recipient may not distribute BEA Program Award funds to an 
Affiliate without the CDFI Fund's prior written consent.

Subpart D--Award Determinations


Sec.  1806.400  General.

    The amount of a BEA Program Award shall be based on the Applicant's 
increases in Qualified Activities from the Baseline Period to the 
Assessment Period, as set forth in the applicable NOFA. When 
determining this increase, Applicants must consider all BEA Qualified 
Activities and all BEA qualified census tracts, as it relates to a 
given subcategory or activity type, as applicable.


Sec.  1806.401  Community eligibility and designation.

    (a) General. If an Applicant reports that it has provided or 
engaged in Service Activities or Distressed Community Financing 
Activities, the Applicant shall identify one or more Distressed 
Communities in which it has provided or engaged in such activities. The 
Applicant may identify different Distressed Communities for each 
category or subcategory of activity. If an Applicant reports that it 
has provided or engaged in CDFI Support Activities, the Applicant shall 
provide evidence that the CDFI that the Applicant supported is 
Integrally Involved in a Distressed Community, as specified in the 
applicable NOFA.
    (b) Minimum area and eligibility requirements. A Distressed 
Community must meet the following minimum area and eligibility 
requirements:
    (1) Minimum area requirements. A Distressed Community:
    (i) Must be an area that is located within the jurisdiction of one 
(1) Unit of General Local Government;
    (ii) The boundaries of the area must be contiguous; and
    (iii) The area must:
    (A) Have a population, as determined by the most recent U.S. Bureau 
of the Census data available, of not less than 4,000 if any portion of 
the area is located within a Metropolitan Area with a population of 
50,000 or greater; or
    (B) Have a population, as determined by the most recent U.S. Bureau 
of the Census data available, of not less than 1,000 in any other case; 
or
    (C) Be located entirely within an Indian Reservation.
    (2) Eligibility requirements. A Distressed Community must be a 
geographic area where:
    (i) At least 30 percent of the Eligible Residents have incomes that 
are less than the national poverty level, as published by the U.S. 
Bureau of the Census or in other sources as set forth in guidance 
issued by the CDFI Fund;
    (ii) The unemployment rate is at least 1.5 times greater than the 
national average, as determined by the U.S. Bureau of Labor Statistics' 
most recently published data, including estimates of unemployment 
developed using the U.S. Bureau of Labor Statistics' Census-Share 
calculation method, or in other sources as set forth in guidance issued 
by the CDFI Fund; and
    (iii) Such additional requirements as may be specified by the CDFI 
Fund in the applicable NOFA.
    (c) Area designation. An Applicant shall designate an area as a 
Distressed Community by:
    (1) Selecting Geographic Units which individually meet the minimum 
area and eligibility requirements set forth in paragraph (b) of this 
section; or
    (2) Selecting two or more Geographic Units which, in the aggregate, 
meet the minimum area and eligibility requirements set forth in 
paragraph (b) of this section, provided that no Geographic Unit 
selected by the Applicant within the area has a poverty rate of less 
than 20 percent.
    (d) Designation. The CDFI Fund will provide a prospective Applicant 
with data and other information to help it identify areas eligible to 
be designated as a Distressed Community. If requested, applicants shall 
submit designation materials as instructed in the applicable NOFA.


Sec.  1806.402  Measuring and reporting Qualified Activities.

    (a) General. An Applicant may receive a BEA Program Award for 
engaging in any of the following categories of

[[Page 52747]]

Qualified Activities during an Assessment Period: CDFI Related 
Activities, Distressed Community Financing Activities, or Service 
Activities. The CDFI Fund may further qualify such Qualified Activities 
in the applicable NOFA, including such additional geographic and 
transaction size limitations as the CDFI Fund deems appropriate.
    (b) Reporting Qualified Activities. An Applicant should report only 
its Qualified Activities for the category or subcategory for which it 
is seeking a BEA Program Award.
    (1) If an Applicant elects to apply for an award in the CDFI 
Related Activities category, it may elect to report on one or both 
types of activities within the CDFI Related Activities category.
    (2) If an Applicant elects to apply for an award in the Distressed 
Community Financing Activities category, the Applicant must report on 
the following subcategories:
    (i) Aggregate Consumer Loans; or
    (ii) Aggregate Commercial Loans and Investments; or
    (iii) Both paragraphs (b)(2)(i) and (ii) separately; unless the 
Applicant provides a reasonable explanation, acceptable to the CDFI 
Fund, in its sole discretion, as to why the Applicant cannot report on 
aggregated activities in such subcategories.
    (3) If an Applicant elects to apply for an award in the Service 
Activities category, it may elect to report on one or more types of 
activities within the Service Activities category.
    (c) Area served. CDFI Related Activities must be provided to a 
CDFI. CDFI Partners that are the recipients of CDFI Support Activities 
must demonstrate that they are Integrally Involved in a Distressed 
Community. Service Activities and Distressed Community Financing 
Activities must serve a Distressed Community. An activity is considered 
to serve a Distressed Community if it is:
    (1) Undertaken in the Distressed Community; or
    (2) Provided to Eligible Residents or enterprises that are 
Integrally Involved in the Distressed Community.
    (d) Certain limitations on Qualified Activities. Activities funded 
with the proceeds of Federal funding or tax credit programs are 
ineligible for purposes of calculating or receiving a Bank Enterprise 
Award. Please see the applicable NOFA for each funding round's 
limitations on Qualified Activities. Qualified Activities shall not 
include loans to or investments in those business types set forth in 
the Uniform Administrative Requirements.
    (e) Measuring the value of Qualified Activities. Subject to such 
additional or alternative valuations as the CDFI Fund may specify in 
the applicable NOFA, the CDFI Fund will assess the value of:
    (1) Equity Investments, Equity-Like Loans, loans, grants and 
certificates of deposits, at the original amount of such Equity 
Investments, Equity-Like Loans, loans, grants or certificates of 
deposits. Where a certificate of deposit matures and is then rolled 
over during the Baseline Period or the Assessment Period, as 
applicable, the CDFI Fund will assess the value of the full amount of 
the rolled-over deposit. Where an existing loan is refinanced (meaning, 
a new loan is originated to pay off an existing loan, whether or not 
there is a change in the applicable loan terms), the CDFI Fund will 
only assess the value of any increase in the principal amount of the 
refinanced loan;
    (2) Project Investments at the original amount of the purchase of 
stock, limited partnership interest, other ownership interest, or 
grant;
    (3) Deposit Liabilities at the dollar amount deposited as measured 
by comparing the net change in the amount of applicable funds on 
deposit at the Applicant during the Baseline Period with the net change 
in the amount of applicable funds on deposit at the Applicant during 
the Assessment Period, as described in paragraphs (e)(3)(i) and (ii) of 
this section:
    (i) The Applicant shall calculate the net change in deposits during 
the Baseline Period by comparing the amount of applicable funds on 
deposit at the close of business the day before the beginning of the 
Baseline Period and at the close of business on the last day of the 
Baseline Period; and
    (ii) The Applicant shall calculate the net change in such deposits 
during the Assessment Period by comparing the amount of applicable 
funds on deposit at the close of business the day before the beginning 
of the Assessment Period and at the close of business on the last day 
of the Assessment Period;
    (4) Financial Services and Targeted Financial Services based on the 
predetermined amounts as set forth by the CDFI Fund in the applicable 
NOFA; and
    (5) Financial Services (other than those for which the CDFI Fund 
has established a predetermined value), Community Services, and CDFI 
Support Activities consisting of Technical Assistance based on the 
administrative costs of providing such services.
    (f) Closed transactions. A transaction shall be considered to have 
been closed and carried out during the Baseline Period or the 
Assessment Period if the documentation evidencing the transaction:
    (1) Is executed on a date within the applicable Baseline Period or 
Assessment Period, respectively; and
    (2) Constitutes a legally binding agreement between the Applicant 
and a borrower or investee, which agreement specifies the final terms 
and conditions of the transaction, except that any contingencies 
included in the final agreement must be typical of such transaction and 
acceptable (both in the judgment of the CDFI Fund); and
    (3) An initial cash disbursement of loan or investment proceeds has 
occurred in a manner that is consistent with customary business 
practices and is reasonable given the nature of the transaction (as 
determined by the CDFI Fund), unless it is normal business practice to 
make no initial disbursement at closing and the Applicant demonstrates 
that the borrower has access to the proceeds, subject to reasonable 
conditions as may be determined by the CDFI Fund.
    (g) Reporting period. An Applicant must only measure the amount of 
a Qualified Activity that it reasonably expects to disburse to an 
investee, borrower, or other recipient within one year of the end of 
the applicable Assessment Period, or such other period as may be set 
forth by the CDFI Fund in the applicable NOFA.


Sec.  1806.403  Estimated award amounts.

    (a) General. An Applicant must calculate and submit to the CDFI 
Fund an estimated award amount as part of its BEA Program Award 
application.
    (b) Award percentages. The CDFI Fund will establish the award 
percentage for each category and subcategory of Qualified Activities in 
the applicable NOFA. Applicable award percentages for Qualified 
Activities undertaken by Applicants that are CDFIs will be equal to 
three times the award percentages for Qualified Activities undertaken 
by Applicants that are not CDFIs.
    (c) Calculating the estimated award amount for Qualified 
Activities. (1) The estimated award amount for the CDFI Related 
Activities category will be equal to the applicable award percentage of 
the net increase in each activity-type (i.e., Equity Investments/Equity 
Like-Loans; and CDFI Support Activities) under the CDFI Related 
Activities category between the Baseline Period and Assessment Period.
    (2) The estimated award amount for the Distressed Community 
Financing Activities category will be equal to the applicable award 
percentage of the weighted value of each subcategory of

[[Page 52748]]

Distressed Community Financing Activities (i.e., Consumer Loans; and 
Commercial Loans and Investments) between the Baseline Period and 
Assessment Period. The weighted value of the applicable subcategories 
shall be calculated by:
    (i) Subtracting the Baseline Period value of such subcategory from 
the Assessment Period value of such subcategory to yield a difference; 
and
    (ii) Multiplying the difference by the applicable Priority Factor 
(as set forth in the applicable NOFA).
    (3) The estimated award amount for the Service Activities category 
will be equal to the applicable award percentage of the weighted value 
of each activity type between the Baseline Period and Assessment 
Period. The weighted value of the applicable activity type shall be 
calculated by:
    (i) Subtracting the Baseline Period value of such Qualified 
Activity from the Assessment Period value of such Qualified Activity to 
yield a difference; and
    (ii) Multiplying the difference by the applicable Priority Factor 
(as set forth in the applicable NOFA).
    (d) Estimated award eligibility review. The CDFI Fund will 
determine the eligibility of each transaction for which an Applicant 
has applied for a BEA Program Award. Based upon this review, the CDFI 
Fund will calculate the actual award amount for which such Applicant is 
eligible.


Sec.  1806.404  Selection process; actual award amounts.

    (a) Sufficient funds available to cover estimated awards. All BEA 
Program Awards are subject to the availability of funds. If the amount 
of appropriated funds available during a funding round is sufficient to 
cover all estimated award amounts for which Applicants are eligible, in 
the CDFI Fund's determination, and an Applicant meets all of the 
program requirements specified in this part, then such Applicant shall 
receive an actual award amount that is calculated by the CDFI Fund in 
the manner specified in Sec.  1806.403.
    (b) Insufficient funds available to cover estimated awards. If the 
amount of funds available during a funding round is insufficient to 
cover all estimated award amounts for which Applicants are eligible, in 
the CDFI Fund's determination, then the CDFI Fund will select 
Recipients and determine actual award amounts based on the process 
described in paragraph (c) of this section and any established maximum 
dollar amount of awards that may be awarded for the Distressed 
Community Financing Activities subcategories, as described in the 
applicable NOFA.
    (c) Priority of awards. In circumstances where there are 
insufficient funds to cover estimated awards, the CDFI Fund will rank 
Applicants based on whether the Applicant is a CDFI or a non-CDFI, and 
in each category of Qualified Activity (e.g., Service Activities) 
according to the priorities described in this paragraph (c). Selections 
within each priority category will be based on the Applicants' relative 
rankings within each category, and based on whether the Applicant is a 
CDFI or a non-CDFI, subject to the availability of funds.
    (1) First priority. If the amount of funds available during a 
funding round is insufficient for all estimated award amounts, first 
priority will be given to CDFI Applicants that engaged in CDFI Related 
Activities, followed by non-CDFI Applicants that engaged in CDFI 
Related Activities ranked in the ratio as set forth in the applicable 
NOFA.
    (2) Second priority. If the amount of funds available during a 
funding round is sufficient for all first priority Applicants but 
insufficient for all remaining estimated award amounts, second priority 
will be given to CDFI Applicants that engaged in Distressed Community 
Financing Activities, followed by non-CDFI Applicants that engaged in 
Distressed Community Financing Activities, ranked in the ratio as set 
forth in the applicable NOFA.
    (3) Third priority. If the amount of funds available during a 
funding round is sufficient for all first and second priority 
Applicants, but insufficient for all remaining estimated award amounts, 
third priority will be given to CDFI Applicants that engaged in Service 
Activities, followed by non-CDFI Applicants that engaged in Service 
Activities, ranked in the ratio as set forth in the applicable NOFA.
    (d) Calculating actual award amounts. The CDFI Fund will determine 
actual award amounts based upon the availability of funds, increases in 
Qualified Activities from the Baseline to the Assessment Period, and an 
Applicant's priority ranking. If an Applicant receives an award for 
more than one priority category described in this section, the CDFI 
Fund will combine the award amounts into a single BEA Program Award.
    (e) Unobligated or deobligated funds. The CDFI Fund, in its sole 
discretion, may use any deobligated funds or funds not obligated during 
a funding round:
    (1) To select Applicants not previously selected, using the 
calculation and selection process contained in this part;
    (2) To make additional monies available for a subsequent funding 
round; or
    (3) As otherwise authorized by the Act.
    (f) Limitation. The CDFI Fund, in its sole discretion, may deny or 
limit the amount of a BEA Program Award for any reason.


Sec.  1806.405  Applications for BEA Program Awards.

    (a) Notice of funding availability; applications. Applicants must 
submit applications for BEA Program Awards in accordance with this 
section and the applicable NOFA. An Applicant's application must 
demonstrate a realistic course of action to ensure that it will meet 
the requirements described in subpart D of this part within the period 
set forth in the applicable NOFA. Detailed application content 
requirements are found in the related application and applicable NOFA. 
The CDFI Fund will not disburse an award to an Applicant before it 
meets the eligibility requirements described in the applicable NOFA. 
The CDFI Fund shall require an Applicant to meet any additional 
eligibility requirements that the CDFI Fund deems appropriate. After 
receipt of an application, the CDFI Fund may request clarifying or 
technical information related to materials submitted as part of such 
application and/or to verify that Qualified Activities were carried out 
in the manner prescribed in this part. The CDFI Fund, in its sole 
discretion, shall determine whether an applicant fulfills the 
requirements set for forth in this part and the applicable NOFA.
    (b) Application contents. An application for a BEA Program Award 
must contain:
    (1) A completed electronic application module that reports the 
increases in Qualified Activities actually carried out during the 
Assessment Period as compared to those carried out during the Baseline 
Period. If an Applicant has merged with another institution during the 
Assessment Period, it must determine the Baseline Period amounts and 
Assessment Period amounts of the Qualified Activities of the merged 
institutions, and report the increase;
    (2) An electronic application module which includes transactions to 
be considered for award calculation purposes. The transactions will 
include Qualified Activities that were closed during the Assessment 
Period. Applicants shall describe the original amount, census tract 
served (if

[[Page 52749]]

applicable), dates of execution, initial disbursement, and final 
disbursement of the instrument for each transaction;
    (3) Documentation of Qualified Activities that meets the required 
thresholds and conditions described in Sec.  1806.402(f) and the 
applicable NOFA;
    (4) Information necessary for the CDFI Fund to complete its 
environmental review requirements pursuant to part 1815 of this 
chapter;
    (5) Certifications, as described in the applicable NOFA and BEA 
Program Award application, that the information provided to the CDFI 
Fund is true and accurate and that the Applicant will comply with all 
relevant provisions of this chapter and all applicable Federal, State, 
and local laws, ordinances, regulations, policies, guidelines, and 
requirements;
    (6) In the case of an Applicant that engaged in Service Activities, 
or Distressed Community Financing Activities, the Applicant must 
confirm, by submitting documentation as described in the applicable 
NOFA and BEA Program application, the Service Activities or Distressed 
Community Financing Activities were provided to:
    (i) Eligible Residents; or
    (ii) A business located in a Distressed Community.
    (7) Information that indicates that each CDFI to which an Applicant 
has provided CDFI Support Activities is Integrally Involved in a 
Distressed Community, as described in the applicable NOFA and BEA 
Program application; and
    (8) Any other information requested by the CDFI Fund, or specified 
by the CDFI Fund in the applicable NOFA or the BEA Program application, 
in order to document or otherwise assess the validity of information 
provided by the Applicant to the CDFI Fund.

Subpart E--Terms and Conditions of Assistance


Sec.  1806.500  Award Agreement; sanctions.

    (a) General. After the CDFI Fund selects a Recipient, the CDFI Fund 
and the Recipient will enter into an Award Agreement. In addition to 
the requirements of the Uniform Administrative Requirements, the Award 
Agreement will require that the Recipient:
    (1) Must carry out its Eligible Activities in accordance with 
applicable law, the approved BEA Program application, and all other 
applicable requirements;
    (2) Must comply with such other terms and conditions that the CDFI 
Fund may establish;
    (3) Will not receive any BEA Program Award payment until the CDFI 
Fund has determined that the Recipient has fulfilled all applicable 
requirements;
    (4) Must comply with performance goals that have been established 
by the CDFI Fund. Such performance goals will include measures that 
require the Recipient to use its BEA Program Award funds for Eligible 
Activities; and
    (5) Must comply with all data collection and reporting 
requirements. Each Recipient must submit to the CDFI Fund such 
information and documentation that will permit the CDFI Fund to review 
the Recipient's progress in satisfying the terms and conditions of its 
Award Agreement, including:
    (i) Annual report. Each Recipient shall submit to the CDFI Fund at 
least annually and within 90 days after the end of each year of the 
Recipient's performance period, an annual report that will provide data 
that, among other things, demonstrates the Recipient's compliance with 
its performance goals (including a description of any noncompliance), 
its uses of the BEA Program Award funds, and the impact of the BEA 
Program and the CDFI industry. Recipients are responsible for the 
timely and complete submission of the annual report.
    (ii) Financial statement. A Recipient is not required to submit its 
financial statement to the CDFI Fund. The CDFI Fund may obtain the 
necessary information from publicly available sources.
    (b) Sanctions. In the event of any fraud, misrepresentation, or 
noncompliance with the terms of the Award Agreement by the Recipient, 
the CDFI Fund may terminate, reduce, or recapture the award, bar the 
Recipient and/or its Affiliates from applying for an award from the 
CDFI Fund for a period to be decided by the CDFI Fund in its sole 
discretion, and pursue any other available legal remedies.
    (c) Compliance with other CDFI Fund awards. In the event that an 
Applicant, Recipient, or its Subsidiary or Affiliate is not in 
compliance, as determined by the CDFI Fund, with the terms and 
conditions of any CDFI Fund award, the CDFI Fund may, in its sole 
discretion, bar said Applicant or Recipient from applying for future 
BEA Program Awards or withhold payment (either initial or subsequent) 
of BEA Program Award funds.
    (d) Notice. Prior to imposing any sanctions pursuant to this 
section or an Award Agreement, the CDFI Fund will provide the Recipient 
with written notice of the proposed sanction and an opportunity to 
respond. Nothing in this section, however, will provide a Recipient 
with the right to any formal or informal hearing or comparable 
proceeding not otherwise required by law.


Sec.  1806.501  Compliance with government requirements.

    In carrying out its responsibilities pursuant to an Award 
Agreement, the Recipient must comply with all applicable Federal, 
State, and local laws, regulations (including but not limited to the 
Uniform Administrative Requirements, ordinances, and Executive Orders).


Sec.  1806.502  Fraud, waste, and abuse.

    Any person who becomes aware of the existence or apparent existence 
of fraud, waste, or abuse of assistance provided under this part should 
report such incidences to the Office of Inspector General of the U.S. 
Department of the Treasury.


Sec.  1806.503  Books of account, records, and government access.

    (a) A Recipient shall submit such financial and activity reports, 
records, statements, and documents at such times, in such forms, and 
accompanied by such supporting data, as required by the CDFI Fund and 
the U.S. Department of the Treasury to ensure compliance with the 
requirements of this part. The United States Government, including the 
U.S. Department of the Treasury, the Comptroller General, and its duly 
authorized representatives, shall have full and free access to the 
Recipient's offices and facilities, and all books, documents, records, 
and financial statements relevant to the award of the Federal funds and 
may copy such documents as they deem appropriate.
    (b) The Award Agreement provides that the provisions of the Act, 
this part, and the Award Agreement are enforceable under 12 U.S.C. 1818 
of the Federal Deposit Insurance Act by the Appropriate Federal Banking 
Agency, as applicable, and that any violation of such provisions shall 
be treated as a violation of the Federal Deposit Insurance Act. Nothing 
in this paragraph (b) precludes the CDFI Fund from directly enforcing 
the Award Agreement as provided for under the terms of the Act.
    (c) The CDFI Fund will notify the Appropriate Federal Banking 
Agency before imposing any sanctions on a Recipient that is examined by 
or subject to the reporting requirements of that agency. The CDFI Fund 
will not impose a sanction described in Sec.  1806.500(b) if the 
Appropriate Federal Banking Agency, in writing, not later than 30 
calendar days after receiving notice from the CDFI Fund:

[[Page 52750]]

    (1) Objects to the proposed sanction;
    (2) Determines that the sanction would:
    (i) Have a material adverse effect on the safety and soundness of 
the Recipient; or
    (ii) Impede or interfere with an enforcement action against that 
Recipient by the Appropriate Federal Banking Agency;
    (3) Proposes a comparable alternative action; and
    (4) Specifically explains:
    (i) The basis for the determination under paragraph (c)(2) of this 
section and, if appropriate, provides documentation to support the 
determination; and
    (ii) How the alternative action suggested pursuant to paragraph 
(c)(3) of this section would be as effective as the sanction proposed 
by the CDFI Fund in securing compliance and deterring future 
noncompliance.
    (d) Prior to imposing any sanctions pursuant to this section or an 
Award Agreement, the CDFI Fund shall, to the maximum extent 
practicable, provide the Recipient with written notice of the proposed 
sanction and an opportunity to comment. Nothing in this section, 
however, shall provide a Recipient to any formal or informal hearing or 
comparable proceeding not otherwise required by law.


Sec.  1806.504  Retention of records.

    A Recipient must comply with all record retention requirements as 
set forth in the Uniform Administrative Requirements.

Dennis E. Nolan,
Deputy Director, Community Development Financial Institutions Fund.
[FR Doc. 2016-18694 Filed 8-9-16; 8:45 am]
 BILLING CODE 4810-70-P