CDFI and NACA Program Paperwork Reduction Act (PRA), 13510-13516 [2023-04348]

Agencies

• Community Development Financial Institutions Fund
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 88, Number 42 (Friday, March 3, 2023)]
[Notices]
[Pages 13510-13516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04348]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


CDFI and NACA Program Paperwork Reduction Act (PRA)

ACTION: Notice and request for public comment.

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SUMMARY: The U.S. Department of the Treasury, as part of its continuing 
effort to reduce paperwork and respondent burden, invites the general 
public and other Federal agencies to take this opportunity to comment 
on proposed and/or continuing information collections, as required by 
the Paperwork Reduction Act (PRA) of 1995. Currently, the Community 
Development Financial Institutions Fund (CDFI Fund), U.S. Department of 
the Treasury, is soliciting comments concerning the Community 
Development Financial Institutions Program (CDFI Program) and the 
Native American CDFI Assistance Program (NACA Program) Financial 
Assistance (FA) and Technical Assistance (TA) Applications, for the 
Fiscal Year (FY) 2023-FY 2025 funding rounds (hereafter, the 
Application or Applications). The FA Application includes optional 
questions that addresses Healthy Food Financing Initiative--Financial 
Assistance (HFFI-FA), Persistent Poverty Counties--Financial Assistance 
(PPC-FA) and Disability Funds--Financial Assistance (DF-FA). 
Information on CDFI Program and NACA Program Applications can be found 
on the CDFI Fund's website at https://www.cdfifund.gov/programs-training/programs/cdfi-program for the CDFI Program and at https://www.cdfifund.gov/programs-training/programs/native-initiatives for the 
NACA Program. The CDFI Fund is required by law to make the Applications 
publicly available for comment prior to submission for a new PRA 
number.

[[Page 13511]]


DATES: Written comments must be received on or before May 12, 2023 to 
be assured of consideration.

ADDRESSES: Submit your comments via email to Pooja Patel, CDFI Program 
and NACA Program Manager, CDFI Fund, at [email protected] or via 
Service Request in the Awards Management Information System (AMIS).

FOR FURTHER INFORMATION CONTACT: Pooja P. Patel, CDFI Program and NACA 
Program Manager, CDFI Fund, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue NW, Washington, DC 20220, or by phone (202) 653-
0421, or email to [email protected]. Other information regarding 
the CDFI Fund and its programs may be obtained on the CDFI Fund website 
at https://www.cdfifund.gov.
    Two documents are provided to aid the public in providing comments 
requested by this Notice. The FA Application and TA Application 
Templates, which present the questions that will comprise the online FA 
and TA Applications, show revisions relative to the existing 
Applications as highlighted in yellow. All documents may be obtained 
from the Request for Public Comments page of the CDFI Fund's website at 
https://www.cdfifund.gov/requests-for-comments.

SUPPLEMENTARY INFORMATION: 
    Title: CDFI Program and NACA Program Financial Assistance and 
Technical Assistance Applications.
    OMB Number: 1559-0021.
    Abstract: The CDFI Program is authorized by the Riegle Community 
Development Banking and Financial Institutions Act of 1994 (Pub. L. 
103-325, 12 U.S.C. 4701 et seq.). Funding for the CDFI Program and the 
NACA Program is made available by Congress to the CDFI Fund through its 
annual appropriations. The regulations governing the CDFI Program are 
found at 12 CFR parts 1805 and 1815 (the Regulations) and set forth 
evaluation criteria and other program requirements. For a complete 
understanding of the programs, the CDFI Fund encourages Applicants to 
review the Regulations, the Notice of Funds Availability (NOFA) for the 
FY 2022 Application round of the CDFI Program (87 FR 8085, February 11, 
2022), the NOFA for the FY 2022 Application round of the NACA Program 
(87 FR 8107, February 11, 2022), the Applications, and the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards (2 CFR part 200) (Uniform Administrative 
Requirements). Capitalized terms in this Request for Public Comment are 
defined in the CDFI Program's authorizing statute, the Regulations, the 
FY 2022 CDFI Program and NACA Program NOFAs, the Applications, 
Application materials, and the Uniform Administrative Requirements. 
Through the CDFI Program and NACA Program's FA and TA awards, the CDFI 
Fund invests in and builds the capacity of for-profit and nonprofit 
community based lending organizations known as Community Development 
Financial Institutions (CDFIs).
    CDFI Program and NACA Program award Recipients will be 
competitively selected after the CDFI Fund's careful review of their 
Applications. The proposed FA Application requires the submission of 
quantitative and qualitative information about the Applicant's Business 
Strategy, Products and Services, Market and Competitive Analysis, 
Management and Staffing, Financial Position, and Growth and 
Projections. The proposed TA Application requires the submission of 
quantitative and qualitative information about CDFI Certification 
Qualifications, an Organizational Overview, Business Strategy, and Use 
of Funds. Please refer to the FY 2022 CDFI Program and NACA Program 
NOFAs for additional guidance on the review and Application process for 
past funding rounds.
    This request for public comment seeks to gather information on the 
CDFI Program and NACA Program TA and FA Applications, which include the 
optional questions for PPC-FA, HFFI-FA and DF-FA.
    Current Actions: Renewal of existing Information Collection.
    Type of Review: Regular Review.
    Affected Public: Businesses or other for-profit institutions, non-
profit entities, and State, local and Tribal entities participating in 
CDFI Fund programs.
    Estimated Number of Respondents for Financial Assistance: 425.
    Estimated Annual Time per Respondent for Financial Assistance 
including optional questions: 145 hours.
    Estimated Total Annual Burden Hours for Financial Assistance: 
61,625.
    Estimated Number of Respondents for Technical Assistance: 225.
    Estimated Annual Time per Respondent for Technical Assistance: 80 
hours.
    Estimated Total Annual Burden Hours for Technical Assistance: 
18,000.
    Requests for Comments: Comments submitted in response to this 
notice will be summarized and/or included in the request for Office of 
Management and Budget approval. All comments will become a matter of 
public record and may be published on the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund is seeking: (a) specific input on the 
content of the FA Application for the CDFI and NACA Programs; (b) 
specific input on the content of the TA Application for the CDFI and 
NACA Programs; (c) specific input on the content of the Healthy Food 
Financing Initiative--Financial Assistance (HFFI-FA) Application; (d) 
specific input on the content of the Persistent Poverty Counties--
Financial Assistance (PPC-FA) Application; (e) specific input on the 
content of the Disability Funds--Financial Assistance (DF-FA) 
Application; (f) general input on other CDFI Program and NACA Program-
related topics and considerations. The Application Templates for 
comment may be obtained on the CDFI Fund's website at https://www.cdfifund.gov/requests-for-comments.
    Comments concerning the Applications are invited on: (a) whether 
the collection of information is necessary for the proper performance 
of the functions of the agency, including whether the information shall 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the collection of information; (c) ways to enhance the 
quality, utility, and clarity of the information to be collected; (d) 
ways to minimize the burden of the collection of information on 
respondents, including through the use of technology; and (e) estimates 
of capital or start-up costs and costs of operation, maintenance, and 
purchase of services required to provide information. In addition, the 
CDFI Fund requests comments in response to the following general 
questions about the Applications. Commenters should ensure that their 
comments are clearly labeled corresponding to each section and question 
number.

A. Financial Assistance (FA) Application

    The following questions are related to the burden and information 
requested in the FA Application, and responses may be used to make 
modifications to the information being requested in the FA Application. 
Commenters should clearly distinguish their comments related to this 
section when providing their responses and ensure comments are clearly 
labeled corresponding to each section and question number.
    1. Is the information that is proposed to be collected by the 
Application necessary and appropriate for the CDFI Fund to consider for 
the purpose of making award decisions?
    2. Are certain data fields, questions or tables redundant or 
unnecessary? If yes, which ones and why?

[[Page 13512]]

    3. Should any data fields, questions or tables be added to ensure 
collection of relevant information?
    4. Are there requests for data in the Application that Applicants 
do not have readily available and that are burdensome to obtain and/or 
calculate?
    5. Are any of the questions particularly burdensome or difficult to 
answer? If yes, which ones and why?
    6. Are there questions that lack clarity as to intent or purpose? 
If yes, which questions, and what needs to be clarified in order for 
Applicants to provide a comprehensive response?
    7. Are the character limitations for narrative responses 
appropriate? Should certain questions allow additional or fewer 
characters? If yes, please specify.
    8. What additional guidance can the CDFI Fund provide in order to 
assist Applicants with completing an FA Application?
    9. Business Plan. In general, does the data and information 
requested in the Application allow an Applicant to demonstrate its 
ability explain its business plan and ability to meet the FA Objectives 
described in the Application?
    10. Business Plan. Is the data and information requested in the 
Application to assess the business plan adequate to assess the 
different CDFI activities?
    11. Business Plan. What, if any, additional data and information 
should be collected to assess business plan activities?
    12. Beneficiary Data. The CDFI Fund currently collects beneficiary 
data by income level in the Beneficiary Snapshot table to assess how 
well an organization is serving communities in economic distress. 
Reported data in this table combines those receiving Development 
Services and those receiving Financial Products/Financial Services and 
is only requested for the Applicant's most recent historic fiscal year.
    a. The CDFI Fund is proposing to request beneficiary data 
separately for (1) Financial Products/Financial Services and (2) 
Development Services to provide a more accurate depiction of 
beneficiaries served. Is the proposal for separating out the 
beneficiary data points between beneficiaries receiving Financial 
Products/Financial Services versus those receiving Development Services 
appropriate? If not, why not? Will this proposed change be difficult or 
overly burdensome to report?
    b. The CDFI Fund is considering to request beneficiary data 
projections for the three year Period of Performance to help assess the 
impact an Applicant's proposed activity with the FA award. Is the 
proposal to collect projected beneficiary data appropriate for use in 
assessing the impacts of an Applicant's proposed activity with the FA 
award? If not, why not? Will this proposed data collection be difficult 
or overly burdensome to report?
    13. FA Objectives. Currently, FA Applicants can select from the 
following list of seven FA Objectives (FAO): 1-1: Increase Volume of 
Financial Products, 1-2: Increase Volume of Financial Services, 1-3: 
New Geographic Area(s), 1-4: New Financial Product(s), 1-5: New 
Financial Service(s), 1-6: New Development Service(s), and 1-7: New 
Targeted Population(s). The CDFI Fund proposes to eliminate certain 
FAOs that are difficult to measure, evaluate and administer. Further, 
these FAOs are rarely selected by Applicants.
    a. The CDFI Fund proposes to eliminate FAO 1-1: Increase Volume of 
Financial Services from the list of FAOs to select in the FA 
Application. However, Financial Services is still an eligible use of 
the FA award. Would all types of regulated CDFIs still be interested in 
applying if they could no longer select this FA Objective and required 
to select another one instead? If no, why not?
    b. The CDFI Fund proposes to eliminate FAO 1-5: New Financial 
Services from the list of FAOs to select in the FA Application. 
However, Financial Services is still an eligible use of the FA award. 
Would all types of regulated CDFIs still be interested in applying if 
they could no longer select this FA Objective and required to select 
another one instead? If no, why not?
    c. The CDFI Fund proposes to eliminate FAO 1-6: New Development 
Services from the list of FAOs to select in the FA Application. 
However, Development Services is still an eligible use of the FA award. 
Would all types of CDFIs still be interested in applying if they could 
no longer select this FA Objective and required to select another one 
instead? If no, why not?
    14. FA Objectives. Currently, to select FAO 1-1: Increase Volume of 
Financial Products, an Applicant's three years of projected lending 
activity must exceed its historic three years of lending activity plus 
the FA award amount (``Increase in Volume''). The Increase in Volume 
becomes a Performance Goal & Measure (PG&M) in the Assistance 
Agreement. The CDFI Fund proposes to change the Increase in Volume 
formula for FAO 1-1: Increase Volume of Financial Products to be more 
consistent with other FAO PG&Ms and to more directly align with the 
amount of the FA award. One option is for the formula to be a 
multiplier of the award amount plus the Applicant's historic three 
years of lending activity. For example, for a $1 million award, if the 
multiplier were 2 and the Applicant's three most recent years of 
historic of lending were $10 million, the FAO 1:1: Increase Volume of 
Financial Products PG&M would be $12 million ($1 million FA award times 
multiplier of 2 plus $10 million historic lending equals $12 million). 
For more detailed explanation of the proposed formula, please see 
Question 4d in the FA Application Template, found on the CDFI Fund's 
website at https://www.cdfifund.gov/requests-for-comments. The CDFI 
Fund is seeking input on the proposed change to FAO 1-1: Increase 
Volume of Financial Products. Is a multiplier of the FA award plus 
three years of historic lending an appropriate formula for FAO 1-1: 
Increase Volume of Financial Products PG&M? If yes, should the CDFI 
Fund require a standard multiplier or allow Applicants to propose their 
own multiplier as part of the Application? If a standard multiplier, 
what should the multiplier be? If a multiplier of the award plus three 
years of historic lending is not appropriate, why is it not an 
appropriate formula and what should the formula be?
    15. Ability to Serve Native Communities. Should the CDFI Fund 
adjust its FA Application in order to better collect information and 
evaluate an Applicant's ability to serve the unique needs of Native 
Communities? If yes, what questions should the CDFI Fund include in the 
FA Application and what evaluation factors should the CDFI Fund 
consider when evaluating an Applicant's ability to serve the unique 
needs of Native Communities?

B. Technical Assistance (TA) Application

    The following questions are related to the burden and information 
requested in the TA Application, and responses may be used to make 
modifications to the information being requested in the TA Application. 
Commenters should clearly distinguish their comments related to this 
section when providing their responses and ensure comments are clearly 
labeled corresponding to each section and question number.
    1. Is the information that is proposed to be collected by the 
Application necessary and appropriate for the CDFI Fund to consider for 
the purpose of making award decisions?
    2. Are certain data fields, questions or tables redundant or 
unnecessary? If yes, which ones and why?
    3. Should any data fields, questions or tables be added to ensure 
collection of relevant information?

[[Page 13513]]

    4. Are there requests for data in the Application that Applicants 
do not have readily available or that are burdensome to obtain and/or 
calculate?
    5. Are any of the questions particularly burdensome or difficult to 
answer? If yes, which ones and why?
    6. Are there questions that lack clarity as to intent or purpose? 
If yes, which questions, and what needs to be clarified in order for 
Applicants to provide a comprehensive response?
    7. Are the character limitations for narrative responses 
appropriate? Should certain questions allow additional or fewer 
characters? If so, please specify.
    8. What additional guidance can the CDFI Fund provide in order to 
assist Applicants with completing a TA Application?
    9. Evaluation Criteria by Application Type. Do the questions in the 
TA Application allow the Applicant to clearly address the evaluation 
criteria for the following Applicant types? If no, what additional 
information should be included in the Application for each Applicant 
type?
    (a) An Emerging and Certifiable CDFI and its ability to achieve 
certification;
    (b) A Sponsoring Entity and its ability to create and receive 
certification for a new CDFI; and
    (c) A Certified CDFI and its ability to build its capacity to 
expand operations, offer new products or services, or increase the 
volume of current business?
    10. Capacity to Serve Target Market(s). The primary purpose of 
making a TA award to a Certified CDFI is to increase its capacity to 
serve its Target Market(s). How can the CDFI Program and NACA Program 
update the TA Application in order to make a more accurate 
determination as to whether or not a TA award will increase a Certified 
CDFI's capacity to serve its Target Market(s)?
    11. Eligible Uses of Funds. Does the current TA Application, 
related guidance materials, and NOFAs provide sufficient clarity to 
help potential Applicants clearly understand what are, and are not, 
eligible uses of TA funds?
    12. Ability to Serve Native Communities. Should the CDFI Fund 
adjust its TA Application in order to better collect information and 
evaluate an Applicant's ability to serve the unique needs of Native 
Communities? If yes, what questions should the CDFI Fund include in the 
TA Application and what evaluation factors should the CDFI Fund 
consider when evaluating an Applicant's ability to serve the unique 
needs of Native Communities?
    13. Sponsoring Entities. The NACA Program allows organizations that 
serve Native Communities, Sponsoring Entities, to apply for TA awards 
in order to create a new legal entity that will become a Certified 
CDFI. In recent history, Sponsoring Entities have largely struggled to 
find success in establishing a Certified CDFI. Between 2013 and 2020, 
only two Sponsoring Entities have created new legal entities that 
ultimately achieved CDFI Certification.
    a. What questions should the Application include in order to better 
assess a Sponsoring Entity's ability to successfully create an emerging 
CDFI within one year and ensure that the emerging CDFI achieves CDFI 
Certification within four years?
    b. Should the CDFI Fund require Sponsoring Entities to create the 
new legal entity that will become the Certified CDFI before being 
eligible to receive a NACA TA award?

C. Healthy Food Financing Initiative--Financial Assistance (HFFI-FA) 
Application

    The following questions are related to the burden and information 
requested in the HFFI-FA Application, and responses may be used to make 
modifications to the information being requested in the HFFI-FA 
Application. Commenters should clearly distinguish their comments 
related to this section when providing their responses and ensure 
comments are clearly labeled corresponding to each section and question 
number.
    1. Is the information being collected sufficient to determine 
whether an Applicant (1) is financing eligible Healthy Foods 
transactions and (2) can deploy an HFFI-FA award? If no, what other 
information should the CDFI Fund collect in order to determine whether 
an Applicant is financing eligible Healthy Foods transactions and can 
deploy an HFFI-FA award?

D. Persistent Poverty Counties--Financial Assistance (PPC-FA) 
Application

    The following questions are related to the burden and information 
requested in the PPC-FA Application, and responses may be used to make 
modifications to the information being requested in the PPC-FA 
Application Commenters should clearly distinguish their comments 
related to this section when providing their responses and ensure 
comments are clearly labeled corresponding to each section and question 
number.
    1. Is the information collected sufficient to determine whether an 
Applicant (1) is providing eligible financing in Persistent Poverty 
Counties and (2) can deploy a PPC-FA award? What other information 
should the CDFI Fund consider in order to determine whether an 
Applicant is providing financing in Persistent Poverty Counties and can 
deploy a PPC-FA award?

E. Disability Funds--Financial Assistance (DF-FA) Application

    The following questions are related to the burden and information 
requested in the DF-FA Application, and responses may be used to make 
modifications to the information being requested in the DF-FA 
Application. Commenters should clearly distinguish their comments 
related to this section when providing their responses and ensure 
comments are clearly labeled corresponding to each section and question 
number.
    1. Is the information collected sufficient to determine whether an 
Applicant (1) is financing eligible DF-FA transactions and (2) can 
deploy a DF-FA award? What other information should the CDFI Fund 
consider in order to determine whether an Applicant is financing 
eligible DF-FA transactions and can deploy a DF-FA award?

F. Other CDFI Program and NACA Program-Related Topics and 
Considerations

    The following questions are related to CDFI Program and NACA 
Program policy topics and will not impact the burden or information 
requested in the Applications. Responses to these questions may inform 
future areas of focus for program design and information requested in 
future Applications. Commentators should clearly distinguish their 
comments related to this section when providing their responses.
    1. Measuring Economic Distress. The CDFI Fund is considering 
developing place-based indicators to measure economic distress in the 
communities where CDFIs invest their dollars at the census tract level.
    a. Are the following indicators appropriate to measure track record 
of serving economically distressed communities/populations? What, if 
any, other metrics should be used to measure the level of economic 
distress of communities/populations served?
    i. Median Family Income (MFI): Calculated by dividing MFI of the 
census tract by the appropriate benchmark (Metropolitan Statistical 
Area MFI, state MFI, national metro MFI, or national non-metro MFI). 
For example, if MFI share is 136.9%, it means the census tract has an 
MFI that is 36.9% larger than the corresponding geographic benchmark. 
The benchmark used to calculate the MFI share of a tract is dependent 
on whether the census

[[Page 13514]]

tract is within a metro or non-metro area. Within a metropolitan area, 
the Metropolitan Statistical Area MFI or the national metropolitan area 
MFI, whichever is greater is used. Outside of a metropolitan area, the 
statewide non-metropolitan area MFI or the national non-metropolitan 
area MFI, whichever is greater is used.
    ii. Unemployment Rate: Represents the number of unemployed people 
living in the census tract as a percentage of the labor force (the sum 
of the employed and unemployed).
    iii. Poverty Rates: The ratio of the number of people living in the 
census tract whose income falls below the poverty line (minimum level 
of income deemed adequate in a particular area) as a percent of the 
population.
    iv. Historical Poverty: An average of the poverty rates of people 
living in the census tract in the most current and previous two 
decennial censuses for the census tract.
    v. Percentage of Other Targeted Populations residing in the 
underlying census tracts: Represents the number of OTPs living in the 
census tract as a percentage of the population.
    b. For CDFIs with Low Income Target Population or Other Targeted 
Population Target Markets (versus geographically based Target Markets), 
are the indicators listed above in Question 1. appropriate to measure 
the track record of serving economically distressed communities/
populations? What, if any, other metrics should be used to measure the 
level of economic distress of communities/populations served?
    2. Deep Impact Lending. In addition to assessing an Applicant's 
track record serving economically distressed communities/populations 
and creating economic opportunities, the CDFI Fund is interested in 
incorporating an Applicant's commitment to ``deep impact'' lending/
investment in its projected activity as part of the evaluation and/or 
compliance process. ``Deep impact'' lending/investment is financing 
activities that reach the hardest to serve borrowers and most 
underserved communities/populations.
    a. Please provide input on the proposed definitions/metrics to 
qualify as ``deep impact'' lending, as defined by the U.S. Department 
of Treasury's Emergency Capital Investment Program (ECIP) Rate 
Reduction Incentive Guidelines. Are the following definitions 
appropriate to measure ``deep impact'' lending/investment for CDFIs? If 
not, why not? What, if any, other definitions/metrics should be used to 
qualify as ``deep impact'' lending/investment?
    i. Lending/investment to Low-Income Borrowers. Low-Income means 
equal to or less than 80% of the area median income.
    ii. Mortgage Lending to Other Targeted Populations.
    iii. Lending/investment in Persistent Poverty Counties (PPC): PPC 
includes any county, including county equivalent areas in Puerto Rico, 
that has had 20% or more of its population living in poverty over the 
past 30 years, as measured by the 1990 and 2000 decennial censuses and 
the 2011-2015 5-year data series available from the American Community 
Survey of the Bureau of the Census or any other territory or possession 
of the United States that has had 20% or more of its population living 
in poverty over the past 30 years, as measured by the 1990, 2000 and 
2010 Island Areas Decennial Censuses, or equivalent data, of the Bureau 
of the Census.
    iv. Lending/investments in Indian Reservations and Native Hawaiian 
Homelands.
    v. Lending/investments in U.S. Territories: U.S. Territories 
include American Samoa, Guam, Northern Mariana Islands, Puerto Rico, 
and the U.S. Virgin Islands.
    vi. Lending/investments to Underserved Small Businesses: A loan/
investment made to a business with revenues that do not exceed $100,000 
or that is majority owned by individual(s) that are low income and/or 
from Other Targeted Populations.
    vii. Deeply Affordable Housing Financing: Financing for any (1) 
affordable housing units restricted to households earning below 30% of 
AMI for a period not less than 10 years, prorated based on the 
percentage that such units make up the total number of housing units; 
or (2) affordable housing development project in a ``high opportunity 
area'' as defined by the Federal Housing Finance Agency (FHFA).
    viii. Public Welfare and Community Development Investments: Public 
Welfare Investments pursuant to 12 U.S.C. 24(eleventh) or 12 U.S.C. 
338a if they primarily benefit Low-Income or Minority individuals or 
businesses.
    b. The CDFI Fund is contemplating adding a CDFI's commitment to 
engage in ``deep impact'' lending going forward as part of the 
evaluation process and/or compliance process. As such, the CDFI Fund is 
considering adding a new PG&M based on an Applicant's projected 
activity for ``deep impact'' lending and investment. The new PG&M would 
be an additional performance goal and would not replace existing PG&Ms. 
Is it appropriate to consider ``deep impact'' lending/investment as 
part of the evaluation process? How should such a PG&M be structured--
as a percentage of overall projected activity, a percentage of the FA 
award amount, a dollar volume commitment to deep impact lending/
investment, or something else (please describe)?
    3. Net Asset Ratio. The CDFI Fund is interested in prioritizing FA 
awards to CDFIs that are most effectively leveraging their balance 
sheet and the resources they already have available to them, and for 
which an FA award is the most essential for the CDFI's growth and 
ability to leverage additional funds to serve communities in need. A 
CDFI's Net Asset Ratio represents a CDFI's net assets compared to its 
total assets and can be a measure of the overall capital structure of 
an organization. Is a CDFI's Net Asset Ratio the appropriate measure to 
assess if a CDFI is effectively utilizing its balance to leverage 
resources? If yes, what should the target Net Asset Ratio be? If not, 
what is the appropriate measure(s) and target benchmark(s)?
    4. Small and Emerging CDFI Assistance. CDFIs may qualify as Small 
and Emerging CDFI Assistance (SECA) Applicants if their asset size does 
not exceed a pre-determined maximum amount based on financial 
institution type OR if they have conducted financing activities for 
four years or less prior to the opening of the funding round. Certified 
CDFIs that exceed the pre-determined maximum asset size thresholds and 
have more than four years of financing activity are considered as Core 
Applicants. Currently, SECA Applicants have different Application 
requirements and evaluation parameters than Core Applicants because of 
their small and/or emerging status. Mainly, Matching Funds requirements 
are typically waived for SECA Applicants. Also, a higher percentage of 
the SECA Applicant pool progresses from Step 3 to Step 4 of the award 
evaluation process (the top 70% of SECA Applicants versus top 60% of 
Core Applicants).
    a. The CDFI Fund is seeking input on whether there should there be 
a maximum number of three FA awards a CDFI can receive as a SECA 
Applicant. In other words, should CDFIs be required to apply as Core 
Applicants after they receive a maximum number of three FA awards under 
the SECA designation, regardless of asset size or financial activity 
start date of the CDFI? If not three, what should that maximum number 
of SECA awards be? If there should be no limit on the number of FA 
awards that a CDFI can receive as a SECA Applicant, why not?

[[Page 13515]]

    b. As noted above, organizations may qualify for SECA if they 
started financing activities no more than four years prior to the 
opening of the funding round, regardless of asset size. Is the start 
date for financing activity to qualify for SECA appropriate? If not, 
what should it be? What, if any, other changes would you make to the 
financing activity start date component of the SECA definition?
    5. Small and Emerging CDFI Assistance. As noted above, 
organizations may qualify as SECA Applicants if their asset size does 
not exceed a pre-determined maximum amount based on financial 
institution type, regardless of financial activity start date. SECA 
asset size thresholds have not been uniformly assessed and updated 
across all financial institutions types. The CDFI Fund is seeking input 
on the SECA maximum total asset size thresholds as follows:
    a. Banks: Updating the threshold from $250 million to $346 million 
for banks/bank holding companies, which corresponds to the FY 2022 
Community Reinvestment Act (CRA) asset size threshold for small banks 
set by the Federal bank regulatory agencies. This practice is 
consistent with the CDFI Fund's Bank Enterprise Award (BEA) Program, 
which uses asset size classes that correspond to CRA asset size 
thresholds in determining the cut off for small institutions. Should 
the threshold be updated? If yes, is $346 million the appropriate 
threshold? If not, what is the appropriate threshold and why? Should 
the threshold be updated regularly to correspond with updates to the 
CRA asset size threshold for small institutions?
    b. Credit Unions: Retaining the current threshold of $100 million 
for credit unions, which aligns with the current National Credit Union 
Administration (NCUA) definition for small institutions. Should this 
threshold be retained? If it should not be retained, what is the 
appropriate threshold and why? Should the threshold be updated 
regularly to correspond with updates to NCUA's definition for small 
institutions?
    c. Unregulated Institutions: The SECA asset size threshold for 
unregulated institutions is $5 million and has not been updated since 
2006. The CDFI Fund is considering updating the SECA asset threshold 
for unregulated institutions. One option is to adjust the current $5 
million threshold for inflation using the Consumer Price Index for 
Urban Wage Earners and Clerical Workers (CPI-W), the same index used by 
the Federal Reserve Board and Federal Depository Institution 
Corporation (FDIC) in adjusting its threshold amounts for small banks. 
Using the CPI-W to adjust the $5 million threshold in 2006 dollars 
would represent approximately $7.5 million in 2022 dollars. Should the 
threshold be updated? If yes, is $7.5 million the appropriate 
threshold? If $7.5 million is not the appropriate threshold, what is 
the appropriate threshold and why? If the threshold should not change, 
why should it remain $5 million? Should the threshold be updated 
regularly? If not, why not? If yes, is the CPI-W the appropriate 
inflation factor to use? If not, what source should be used as the 
benchmark for the updates?
    6. Small and Emerging CDFI Assistance. Per the FY 2022 NOFA, the 
maximum FA award request for SECA Applicants is currently $700,000 
whereas the maximum FA award request for Core Applicants is $1 million. 
Currently an FA Applicant that meets SECA requirements (called ``SECA 
qualified Applicant'') may choose to apply as a Core Applicant if the 
Applicant wants to request more than the $700,000 SECA maximum award 
request (up to the $1 million maximum award request for Core 
Applicants). SECA qualified Applicants that apply as Core are treated 
as Core Applicants, and are held to the Application requirements and 
evaluation parameters of a Core Applicant. The CDFI Fund is considering 
removing the option for SECA qualified Applicants to apply as Core 
Applicants, therefore only allowing SECA qualified Applicants to apply 
under the SECA Application (which would mean all SECA qualified 
Applicants would be limited to the lower maximum award request).
    a. What feedback do CDFIs have on removing the option for SECA 
qualified organizations to apply as Core Applicant?
    b. Are there ways the CDFI Fund can implement this change to 
minimize impacts to the affected Applicants?
    7. Funding Levels for CDFIs. The CDFI Fund is prohibited by statute 
from obligating more than $5 million in CDFI and NACA Program awards, 
in the aggregate, to any one organization and its Subsidiaries and 
Affiliates during any three-year period. Should the $5 million funding 
cap be reduced? If yes, what should the funding cap be?
    8. Funding Levels for CDFIs. Should larger CDFIs be limited on the 
total dollar amount or number of FA awards they receive within a 
certain timeframe? If yes, what should be the minimum asset size to be 
classified as a larger CDFI for each type of unregulated institution, 
bank/bank holding company, and credit union? For the purposes of this 
Request for Public Comment, the CDFI Fund proposes the following asset 
sizes for ``larger CDFIs'':

 Banks with assets of more than $1.5 billion
 Credit Unions with assets of more than $1 billion
 Unregulated institutions with assets of more than $25 million

    9. Funding Levels for CDFIs. Please fill in the blanks for each for 
each institution type of unregulated institution, bank/bank holding 
company, and credit union: ``CDFIs with asset size over $__ can receive 
a maximum of $__ in CDFI and NACA Program FA awards every __ years.''
    10. Continued Viability for CDFIs. The Riegle Act requires that 
Applicants for FA provide a comprehensive strategic plan for the 
organization that contains a business plan of not less than five years 
in duration. The plan should demonstrate that the Applicant will be 
properly managed and will have the capacity to operate as a CDFI that 
will not be dependent upon assistance from the CDFI Fund for continued 
viability.
    a. To what extent are CDFIs reliant on FA funding from the CDFI 
Fund for their continued viability?
    b. What do CDFIs need in order to be independent from the CDFI 
Fund's assistance for continued viability? Would a program model in 
which CDFIs receive significantly larger award sizes for a three- to 
five-year period support viability independent from the CDFI Fund? If 
not, what would support a CDFI's growth towards such independence?
    11. Sponsoring Entities. As noted earlier, the NACA Program allows 
organizations that primarily serve Native Communities, Sponsoring 
Entities, to apply for TA awards in order to create a new legal entity 
that will become a Certified CDFI. In recent history, Sponsoring 
Entities have largely struggled to find success in establishing a 
Certified CDFI. Between 2013 and 2020, only two Sponsoring Entities 
have created new legal entities that ultimately achieved CDFI 
Certification. Should the CDFI Fund consider eliminating the Sponsoring 
Entity model and focus resources on building the capacity of emerging 
Native CDFIs in other ways? If yes, please specify other ways in which 
the CDFI Fund can support the creation of new Native CDFIs. If no, 
please specify why this model is needed and what enhancements would be 
beneficial to increasing the success of Sponsoring Entities creating a 
legal entity that achieves CDFI Certification.


[[Page 13516]]


(Authority: Pub. L. 103-325; 12 U.S.C. 4703, 4703 note, 4710, 4717; 
31 U.S.C. 321; 12 CFR part 1805)

Jodie L. Harris,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2023-04348 Filed 3-2-23; 8:45 am]
BILLING CODE 4810-05-P