August 11, 2021

EMERGENCY CAPITAL INVESTMENT PROGRAM

Rate Reduction Incentive Guidelines

U.S. Department of the Treasury

The Emergency Capital Investment Program (ECIP) is designed to support access to capital in 

communities traditionally excluded from the financial system and that have struggled the most 

during the COVID-19 crisis. Under the program, the Treasury Department will invest up to $9 

billion in depository community development financial institutions (CDFIs) and minority 

depository institutions (MDIs), supporting their efforts to provide financial products for small 

and minority-owned businesses and consumers in low-income and underserved communities.

In general, Treasury’s investments under the ECIP will take the form of preferred stock issued by 

participating institutions. However, if Treasury determines that an institution cannot feasibly 

issue preferred stock under the program, Treasury’s investment in the institution may take the 

form of subordinated debt. 

Rate Reductions for Qualified Lending

The maximum annual dividend or interest rate for preferred stock or subordinated debt issued to 

Treasury is 2%. However, under the terms of the program, the dividend or interest rate will 

decrease if a participating institution increases its loan originations to target markets above 

certain thresholds. Specifically, Treasury will compare an institution’s qualified lending during 

each year of the program with the institution’s qualified lending during the 12 months ending 

September 30, 2020.1

 The dividend or interest rate will be (1) 1.25% if the institution increases 

its qualified lending by 200% to 400% of the amount of Treasury’s investment, or (2) 0.5% if the 

institution increases its qualified lending by more than 400% of the amount of Treasury’s 

investment. 

After the tenth anniversary of the issuance date of the instrument, the dividend or interest rate

will be fixed at a rate equal to (1) 0.5%, if the ECIP recipient’s average annual amount of 

qualified lending over the preceding 9 years has totaled more than 400% of the recipient’s 

baseline amount of qualified lending; (2) 1.25%, if the ECIP recipient’s average annual amount 

of qualified lending over the preceding 9 years has totaled 200% to 400% of the recipient’s 

baseline amount of qualified lending; or (3) 2%, if the ECIP recipient’s average annual amount 

of qualified lending over the preceding 9 years has totaled less than 200% of the recipient’s 

baseline amount of qualified lending. For example, if an ECIP recipient’s baseline qualified 

lending was $1 million, then during years 2 through 10, the recipient’s aggregate qualified 

lending must total at least $36 million ($1 million baseline x 400% x 9 years) to achieve a 

1 An ECIP recipient’s baseline will be calculated based on the total amount of qualified loans originated for the 

annual period between September 30, 2019 and September 30, 2020. Since the baseline counts loan originations, an 

ECIP recipient will receive full credit for loans sold. 
August 11, 2021

dividend rate or interest rate of 0.5% after the tenth anniversary of the issuance date of the

preferred stock or subordinated debt. 

Additional Incentives for Deep Impact Lending 

Treasury recognizes the value of “deep impact” lending to establish a level playing field for 

those lenders that provide the most impactful lending to the most underserved communities. 

Deep impact lending is a subset of the qualified lending described above. An investment that 

qualifies as deep impact lending will provide the institution with double credit toward its 

dividend or interest rate reduction. For example, a 200% increase in ordinary qualified lending 

is required to decrease a dividend rate to 1.25%, but if all of those loans qualify as deep impact 

lending, then this rate reduction can be achieved with only a 100% increase in loan originations 

over the baseline. This approach will allow CDFIs and MDIs to do more challenging types of 

lending to more underserved target communities without experiencing a disincentive in the ratereduction structure that could otherwise arise, in light of the fact that deep impact loans can be 

more time-consuming and burdensome for a lender to make than other types of loans. 

Definitions of Qualified Lending and Deep Impact Lending

The following table sets forth the categories of loans that Treasury anticipates including in its 

definitions of qualified lending and deep impact lending. The term sheets for the financial 

instruments to be issued by institutions participating in ECIP provide additional detail regarding 

the definition of qualified lending.2

 

Categories of Target 

Communities

Qualified Lending3 Deep Impact Lending4

People • LMI borrowers5

• “Other Targeted Populations,” as 

defined in the ECIP application

• Low-income borrowers 

• Mortgage lending to Other 

Targeted Populations

Places • Rural Communities: Areas 

within a county not contained 

within a Metropolitan Statistical 

Area, as defined in OMB 

Bulletin No. 15-01 and applied 

using 2010 census tracts.

• Persistent Poverty Counties 

(PPCs): 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 

2 See senior preferred stock term sheet, available at 

https://home.treasury.gov/system/files/136/Senior_Preferred_Stock_Term_Sheet.pdf; subordinated debt term sheet 

(mutual and S corps), available at 

https://home.treasury.gov/system/files/136/Subordinated_Debt_Term_Sheet_for_Mutual_Institutions_and_S_Corpo

rations.pdf; and credit union subordinated debt term sheet, available at 

https://home.treasury.gov/system/files/136/Subordinated_Debt_Term_Sheet_for_Credit_Unions.pdf. 3 Purchases of, or participations in, loans made by non-depository CDFI loan funds that meet the definition of 

qualified lending as defined in these guidelines and were originated within one year of the purchase by the 

participating financial institution shall also be included in qualified lending. 

4 Purchases of, or participations in, loans made by non-profit non-depository CDFI Funds that meet the definition of 

deep impact lending defined in these guidelines and were originated within one year of the purchase by the 

participating financial institution shall also be included in deep impact lending. 5 “Low Income” means equal to or less than 80% of the area median income and “moderate income” means equal to 

or less than 120% of the area median income. 
August 11, 2021

• Urban Low-Income 

Communities: A local 

community, neighborhood, or 

rural district in which the median 

income does not exceed 80% of 

the median income for the area 

in which such census tract or 

block numbering area is located. 

With respect to a census tract or 

block numbering area located 

within a Metropolitan Area, the 

median family income (MFI) 

shall be at or below 80% of the 

Metropolitan Area MFI or the 

national Metropolitan Area MFI, 

whichever is greater. In the case 

of a census tract or block 

numbering area located outside 

of a Metropolitan Area, the MFI

shall be at or below 80% of the 

statewide Non-Metropolitan 

Area MFI or the national NonMetropolitan Area MFI, 

whichever is greater.

• Underserved Communities:

Local community, neighborhood, 

or rural district that is an 

“investment area” as defined by 

the CDFI Fund regulations in 12 

CFR 1805.201 (b)(3)(ii).

• Minority Communities: A

census tract where the majority 

of the population consists of 

“minorities” as defined by the 

Act.

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.6

• Indian Reservations and Native 

Hawaiian Homelands

• U.S. Territories7

Businesses • Small Businesses or Farms: A

business or farm with annual 

revenues that do not exceed $1 

million at the time of 

underwriting, consistent with the 

Federal Reserve’s definition of 

the small business size that 

defines an investment eligible for 

CRA credit.8

• Underserved Small Business: A 

loan 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.

6 See Consolidated Appropriations Act, 2020 (Pub. L. No. 116-93), Division C, Title I. 7 U.S. Territories include American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin 

Islands

8 The Federal Reserve’s definition of investments that qualify for credit under the CRA includes loans to businesses 

or small farms with annual revenue less than $1 million.
August 11, 2021

Borrowers or projects 

that create direct 

benefits for LMI

communities or to 

Other Targeted 

Populations

• Affordable Housing: Financing 

for any affordable housing 

development project that has 

received a funding allocation 

under a state’s LIHTC program 

(9% or 4% credits) or from a 

HUD grantee utilizing HOME or 

Housing Trust Fund grant funds.

• 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 

LMI individuals or communities.

• Community Serving Facility: 

Financing of a facility that is 

underwritten on the basis of 

primarily serving low-income 

households or Other Targeted 

Populations or are sponsored by 

a unit of government to serve 

low-income households or Other 

Targeted Populations. 

• Deeply Affordable Housing:

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 

of the total number of housing 

units; or (2) affordable housing 

development project in a “high 

opportunity area” as defined by 

FHFA.

• 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.9

 

9 A “minority business” or “minority-owned business” is a business that is 51% or more owned by a “minority” 

individual as defined in the Act.