Community Development Capital Initiative

Early Repurchase Option

FAQs

1. Who is eligible to participate?

Only institutions currently in the Community Development Capital Initiative (CDCI) are 

eligible. Institutions with other TARP or Treasury investments are ineligible to 

participate. The remaining eligibility criteria are listed in the eligibility section of the 

notification letter found here: https://www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cdci/Pages/CDCI-EarlyRepurchase-Option.aspx.

2. How do I submit a proposal?

First review the notification letter ensuring your institution is eligible, then fill out the 

proposal form and submit with the required supporting documents to cdci@treasury.gov. 

Proposals and supporting materials must be submitted by 5:00PM ET, Friday, December 

9, 2016.

3. Where can I find the notification letter and the proposal form?

Both documents can be found on Treasury’s website here: 

https://www.treasury.gov/initiatives/financial-stability/TARP-Programs/bank-investmentprograms/cdci/Pages/CDCI-Early-Repurchase-Option.aspx.

4. Does the institution with CDCI securities outstanding have to submit the proposal?

Yes, the proposal must come from the institution with the CDCI securities outstanding.

5. Does my proposal have to be for all of my outstanding CDCI securities?

No, but you must repurchase at least 50 percent of your outstanding CDCI securities as 

part of the early repurchase process.

6. How will my proposal be evaluated?

Treasury will first determine if the institution meets the eligibility criteria as set forth in 

the notification letter. If so, Treasury, in its sole discretion, will then determine if the 

institution’s early repurchase offer meets or exceeds Treasury’s determination of fair 

value. Treasury is under no obligation to accept any offer and will only accept proposals 

from institutions that are deemed eligible and whose early repurchase offer meets or 

exceeds its determination of fair value.
7. How Will Treasury determine fair value?

Treasury will use internally generated values and a third-party valuation to determine fair 

value for each security. These values will be determined based on a “hold value” and will 

not take into account liquidity discounts or adjustments based on factors other than those 

driving the intrinsic fair value of the security.

8. What supporting documents should I submit with the completed proposal form?

The list of required supporting documents can be found in the procedures and timing 

section of the notification letter found here: 

https://www.treasury.gov/initiatives/financial-stability/TARP-Programs/bank-investmentprograms/cdci/Pages/CDCI-Early-Repurchase-Option.aspx.

9. How long will Treasury take to respond to my proposal?

Treasury will seek to respond to each proposal within 15 business days.

10. Do I need approval from my banking regulator before submitting a proposal or for 

the proposal to be accepted?

Treasury does not require that an institution consult its primary federal regulator prior to 

submission of a proposal. If the proposal is accepted, however, as part of the closing 

process Treasury will request that your primary federal regulator directly contact 

Treasury to consent to your repurchase. Treasury cannot accept correspondence between 

your institution and its appropriate federal banking agency in lieu of the formal 

notification described above. Treasury recommends that you alert your regulator as soon 

as you decide to submit a proposal. 

11. My institution doesn’t have audited financials, what should I submit as my 

supporting documentation?

If audited financials are unavailable, the institution must submit a letter explaining why 

this is the case and submit the latest unaudited annual financials (balance sheet, income 

statement, regulatory capital, etc.) for both the bank and bank holding company (if 

applicable), or credit union. The letter should also contain a signed statement from the 

Chief Executive Officer, the Chief Financial Officer, and the directors of the bank and 

bank holding company (if applicable), or credit union, certifying the accuracy of the 

submitted financials.

12. What type of dividend history should be included?

Include the dates and amounts of any dividends paid on any securities junior or pari passu 

to the CDCI securities in your institutions capital structure. This should include all 
payments made from the last dividend payments made prior to the CDCI investments up 

to and including those made prior to the submission of your latest proposal.

13. What does the phrase “immediately prior fiscal year” in Section 4.2(b) of the 

Securities Purchase Agreement (SPA) and/or Section 3(c) of the CDCI certificate of 

designation (COD) (applicable for preferred stock securities) mean?

When used in connection with the dividend restrictions contained in the SPA and COD, 

the phrase “immediately prior fiscal year” means the fiscal year immediately prior to 

the date on which a CDCI institution is considering making a cash dividend. Therefore, 

the cash dividend limitation is effective on a rolling fiscal year basis. Accordingly, if cash 

dividend payments are reduced while an institution remains in the CDCI program, the 

reduced cash dividend payments become the ceiling for future cash dividends. This has 

been the interpretation of Treasury since the inception of the CDCI program. Please 

contact Treasury at cdci@treasury.gov if you have any questions regarding this matter.

14. I don’t know if my institution is in compliance with the executive compensation 

rules. How do I find out?

Email Treasury at CDCICompliance@treasury.gov to inquire about the status of your 

executive compensation compliance.

15. If my proposal is declined by Treasury, may I submit a revised proposal? 

Yes, an institution may revise and resubmit its proposal within 60 calendar days of its 

first submission, as long as that time is prior to 5:00PM ET, Friday, December 9, 2016.

16. If I submit a revised proposal, what should I include? Do I need to attach new 

supporting documentation?

Please resubmit only the proposal form, unless you are updating supporting

documentation to reflect more recent information (i.e., new quarterly financials, new 

dividend payment information, etc.) that wasn’t included with the previous proposal.

17. When is the deadline to submit a proposal?

The submission deadline is the earlier of a) 5:00PM ET, Friday, December 9, 2016, or b) 

5:00PM ET, 60 calendar days after submission of the first proposal.

18. Does my institution have to close the transaction?

Yes, the CDCI participant that submitted the proposal must be the counterparty in the 

repurchase transaction. 

19. If the proposal is accepted, how long do I have to complete the repurchase?
Treasury expects that repurchases will be completed within a commercially reasonable 

period, and anticipates that all repurchases of CDCI securities under this early repurchase 

option will be completed by Friday, December 30, 2016.

20. Do I have to pay all my dividends or interest at closing?

Yes, the early repurchase price only applies to the par value of the securities and not the 

outstanding dividends or interest, which are due at closing.

21. I have other questions, who should I contact?

All questions may be directed to cdci@treasury.gov.