70764 Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices

DEPARTMENT OF THE TREASURY

Community Development Financial

Institutions Fund

Notice of Funds Availability (NOFA)

Inviting Applications for the

Community Development Financial

Institutions Program—Small and

Emerging CDFI Assistance (SECA)

Component

AGENCY: Community Development

Financial Institutions Fund, Department

of the Treasury.

ACTION: Notice of Funds Availability

(NOFA) inviting applications.

SUMMARY: The Community Development

Banking and Financial Institutions Act

of 1994 (12 U.S.C. 4701 et seq.) (the

‘‘Act’’) authorizes the Community

Development Financial Institutions

Fund (the ‘‘Fund’’) of the U.S.

Department of the Treasury to select and

provide financial and technical

assistance to eligible applicants under

the Community Development Financial

Institutions (‘‘CDFI’’) Program. The

interim rule (12 CFR part 1805), most

recently revised and published in the

Federal Register on August 14, 2000,

provides guidance on the contents of the

necessary application materials,

evaluation criteria, and other program

requirements. More detailed application

content requirements are found in the

application packet. While the Fund

encourages applicants to review the

interim rule, all of the application

content requirements and the evaluation

criteria contained in the interim rule are

also contained in the application packet.

Subject to funding availability, the Fund

intends to award up to $10 million in

appropriated funds under this NOFA

and expects to issue approximately 70

to 100 awards. The Fund reserves the

right to award in excess of $10 million

in appropriated funds under this NOFA

provided that funds are available and

the Fund deems it appropriate. The

Fund reserves the right to fund, in

whole or in part, any, all or none of the

applications submitted in response to

this NOFA.

This NOFA is issued in connection

with the SECA Component of the CDFI

Program. The SECA Component

provides direct assistance to CDFIs and

entities that propose to become CDFIs in

order to enhance their capacity to serve

their respective Target Markets. The

SECA Component includes direct

assistance in the form of technical

assistance (TA) and financial assistance

(FA). The SECA Component replaces

the TA Component of the CDFI Program,

administered by the Fund in 1998, 1999

and 2000, through which the Fund

provided TA to CDFIs and entities

proposing to becoming CDFIs.

DATES: Applications may be submitted

on and following November 27, 2000 up

to the application deadline. The

deadline for receipt of an application is

6 p.m. EST, March 27, 2001.

Applications received in the offices of

the Fund after that date and time will

be rejected and returned to the sender.

ADDRESSES: Applications shall be sent

to: Awards Manager, Community

Development Financial Institutions

Fund, U.S. Department of the Treasury,

601 13th Street, NW., Suite 200 South,

Washington, DC 20005. Applications

sent electronically or by facsimile will

not be accepted.

FOR FURTHER INFORMATION CONTACT: If

you have any questions about

programmatic requirements, contact the

SECA Program Manager. Should you

wish to request an application package

or have questions regarding application

procedures, contact the Awards

Manager. The SECA Program Manager

and the Awards Manager may be

reached by e-mail at

cdfihelp@cdfi.treas.gov, by telephone at

(202) 622–8662, by facsimile at (202)

622–7754 (these are not toll free

numbers), or by mail at CDFI Fund, 601

13th Street, NW., Suite 200 South,

Washington, DC 20005. Allow at least

one to two weeks from the date the

Fund receives an application request for

receipt of the application package.

Application materials and other

information regarding the Fund and its

programs may be downloaded from the

Fund’s web site at http://www.treas.gov/

cdfi.

SUPPLEMENTARY INFORMATION:

I. Background

Credit and investment capital are

essential ingredients for developing

affordable housing, starting or

expanding businesses, creating and

retaining jobs from these businesses,

revitalizing neighborhoods, and

empowering people. Access to financial

services is critical to help bring more

Americans into the economic

mainstream. As a key urban and rural

policy initiative, the CDFI Program

funds and supports a national network

of financial institutions that is

specifically dedicated to funding and

supporting community development.

This strategy builds strong institutions

that make loans and investments and

provide services to economically

distressed investment areas and in

economically disadvantaged targeted

populations. The Act authorizes the

Fund to select entities to receive FA and

TA. This NOFA invites applications

from eligible organizations for TA or for

a combination of TA and FA for the

purpose of promoting community

development activities.

The program connected with this

NOFA constitutes the SECA Component

of the CDFI Program, involving direct

FA and/or TA to CDFIs that provide

loans, investments and other activities

to their target markets. Under this SECA

Component NOFA, the Fund anticipates

making a maximum TA award in the

amount of $50,000 to any one applicant

seeking TA only. However, the Fund, in

its sole discretion, reserves the right to

award amounts in excess of the

anticipated maximum amount of TA if

the Fund deems it appropriate. Also,

under the SECA Component, the Fund

anticipates making a maximum FA

award in the amount of $150,000.

Together with the $50,000 maximum

TA award, the maximum award

available to any one applicant seeking

FA and TA will be $200,000. Under the

SECA Component, applicants seeking

FA must also request TA.

Previous awardees of FA under the

CDFI Program (i.e., those that were

selected by the Fund prior to

submission of the SECA Component

application to receive FA) are eligible to

apply for TA only under this NOFA.

Any previous awardee of TA only under

the CDFI Program, any entity not

previously selected for an award under

the CDFI Program, or any previous

awardee under another Fund program is

eligible to apply for TA, or a

combination of FA and TA, under this

NOFA, provided it also meets the

definition of a ‘‘small and emerging’’

CDFI, as defined in this NOFA. Previous

Fund awardees must be aware that

success in a previous funding round

should not be considered indicative of

success under this NOFA. In addition,

organizations will not be penalized for

having previously received awards from

the Fund, except as mentioned above

and to the following extent:

(1) The Fund is generally prohibited

from obligating more than $5 million in

assistance, in the aggregate, under the

CDFI Program, to any one organization

and/or its subsidiaries and affiliates

during any three year period; and

(2) The Fund reserves the right not to

make an award to a previous CDFI

Program awardee that has failed to meet

its performance goals, financial

soundness covenants (if applicable),

and/or certain other terms, conditions or

requirements contained in previously

executed assistance agreement(s).

Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices 70765

II. Eligibility

The Act and the interim rule specify

the eligibility requirements that each

applicant must meet in order to be

eligible to apply for assistance under

this SECA Component NOFA. At the

time an entity submits its application,

the entity must be a duly organized and

validly existing legal entity under the

laws of the jurisdiction in which it is

incorporated or otherwise established.

Also, an entity must meet, or propose to

meet, CDFI certification eligibility

requirements.

If the applicant does not meet the

CDFI eligibility requirements, the

application shall include a realistic plan

for the applicant to meet the CDFI

certification criteria by March 27, 2003

(the deadline may be extended at the

sole discretion of the Fund). In no event

will the Fund disburse FA to the

applicant until the applicant is certified

as a CDFI. The Fund, in its sole

discretion, may disburse TA to an

applicant prior to its certification as a

CDFI in circumstances when, in the

judgment of the fund, said TA will help

the applicant meet a certification

requirement(s). Further details regarding

eligibility and other program

requirements are found in the

application packet.

In general, to be certified, a CDFI and

its affiliates must collectively have a

primary mission of promoting

community development. In addition,

the applicant organization must:

provide loans or equity investments,

serve an investment area or a targeted

population, provide development

services, maintain community

accountability, and be a nongovernmental entity. If an applicant is a

Depository Institution Holding

Company or an affiliate of a Depository

Institution Holding Company, the

applicant and its affiliates must

collectively meet all eligibility

requirements. If an applicant is a

subsidiary of an insured depository

institution, the insured depository

institution and all of its subsidiaries

must collectively meet all of the

eligibility requirements.

In addition to the above, there are

other eligibility factors for applicants

seeking FA (and TA) under the SECA

Component. Applicants for FA and TA

(as opposed to TA only under the SECA

Component) must be ‘‘small and

emerging’’ entities. With respect to an

entity that is not a Depository

Institution Holding Company or an

Insured Depository Institution, a ‘‘small

and emerging’’ entity is one that (i)

possesses total assets of $5 million or

less as of the last day of its most recent

fiscal year that ended prior to March 1,

2001 and (ii) prior to the date of

application for SECA Component funds,

has never been selected to receive FA

under the CDFI Program.

An applicant that is a Depository

Institution Holding Company or an

Insured Depository Institution will be

considered a ‘‘small and emerging’’

entity if it (i) prior to the date of

application for SECA Component funds,

has never been selected to receive FA

under the CDFI Program and (ii)

received its original charter from the

appropriate regulatory agency no more

than three years prior to the date of this

NOFA. For purposes of this NOFA, the

Fund will not consider the asset size of

a Depository Institution Holding

Company or Insured Depository

Institution in evaluating whether such

an entity is ‘‘small and emerging.’’

III. Types of Assistance

An applicant under this NOFA may

submit an application for a TA grant or

for both FA and TA. FA may be

provided in the form of an equity

investment (including, in the case of

certain insured credit unions, secondary

capital accounts), grant, loan, deposit,

credit union shares, or any combination

thereof. Applicants for FA shall indicate

the dollar amount, form, and terms and

conditions of the assistance requested.

Applicants for TA under this NOFA

shall describe the type(s) of TA

requested, when the TA will be

acquired, the provider(s) of the TA, the

cost of the TA, and a narrative

explanation of how the TA will enhance

their community development impact.

IV. Application Packet

An applicant under this NOFA,

whether applying for TA or both FA and

TA, must submit the materials described

in the application form.

V. Matching Funds

Applicants seeking FA under this

NOFA must obtain matching funds from

sources other than the Federal

government on the basis of not less than

one dollar for each dollar of FA

provided by the Fund (matching funds

are not required for TA). Matching

funds must be at least comparable in

form and value to the FA provided by

the Fund. Non-Federal funds obtained

or legally committed on or after January

1, 1999, and before December 31, 2002,

may be considered when determining

matching funds availability. The Fund

reserves the right to recapture and

reprogram funds if an applicant fails to

raise the required matching funds by

December 31, 2002, or to grant an

extension of such matching funds

deadline for specific applicants selected

for assistance, if the Fund deems it

appropriate. Funds used by an applicant

as matching funds for a previous award

under the CDFI Program or under

another Federal grant or award program

cannot be used to satisfy the

aforementioned matching funds

requirement.

VI. Evaluation

Applications received will be

reviewed for eligibility and

completeness. If determined to be

eligible and complete, applications will

be evaluated by the Fund on a

competitive basis in accordance with

the criteria described in this NOFA. In

conducting its substantive review, the

Fund will evaluate applications

according to the criteria, and use the

procedure described, in this NOFA.

Phase One

In Phase One of the substantive

review, each Fund reader will evaluate

applications on a 100-point scale, using

the following criteria and allocation of

points:

(a) Comprehensive Business Plan: 60

point maximum; with a minimum score

of 30 points required to advance to

Phase Two review (TA only applicants);

or 70 point maximum, with a minimum

score of 35 points required to advance

to Phase Two review (applicants seeking

TA and FA combined). The score for the

Comprehensive Business Plan is based

on a composite assessment of an

applicant’s strength and weaknesses

under five sub-criteria for TA only

applicants and six sub-criteria for those

applicants seeking TA and FA. Scoring

of the sub-criteria is weighted to reflect

whether the applicant is a start-up

organization or an established

organization. The Fund defines a startup organization as an entity that has

been in operation three years or less, as

of the date of this NOFA (meaning, for

purposes of this NOFA, having incurred

initial operating expenses on or after

November 27, 1997).

The sub-criteria are:

(1) Community development tract

record (established organizations only):

10 point maximum;

(2) Financial and operational

capacity: 10 point maximum

(established organizations); 4 point

maximum (start-ups);

(3) Capacity, skills and experience of

the management team: 14 point

maximum (established organizations);

and 30 point maximum (start-ups);

(4) Market analysis, program design

and implementation plan, and funding

sources: 14 point maximum;

70766 Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices

(5) Projected activities and

community development impact: 12

point maximum; and

(6) Financial projections and

resources: 10 point maximum (TA only

applicants will not be evaluated under

this sub-criterion).

In the case of an applicant that has

previously received TA from the Fund

under the CDFI Program, the Fund will

consider whether the applicant will

expand its operations into a new Target

Market, offer more products or services,

improve the quality of its products and

services, and/or increase the volume of

its activities. The Fund will consider the

applicant’s level of success in meeting

its performance goals, financial

soundness covenants (if applicable), and

other requirements contained in its

existing assistance agreement(s) with

the Fund, and the benefits that will be

created with new Fund assistance over

and above benefits created by previous

Fund assistance.

(b) Technical Assistance Proposal

(TAP): 40 point maximum; with a

minimum score of 20 points to advance

to Phase Two review (TA only

applicants); or 30 point maximum with

a 15 point minimum to advance to

Phase Two review (applicants seeking

FA and TA combined). The TAP

provides the applicant with an

opportunity to address the

organizational improvements needed to

achieve the objectives of its

comprehensive business plan. Such

assessment is accompanied by a budget

and a TA award request. In the TAP, the

applicant should describe how

improving its organization will translate

to community development impact,

particularly within its Target Market.

The budget and accompanying narrative

will be evaluated for the eligibility of

proposed uses of the TA award. Eligible

types of TA award uses include, but are

not limited to, the following: (1)

acquiring consulting services; (2) paying

staff salary for the limited purposes of

completing tasks and/or fulfilling

functions that are otherwise eligible TA

award uses under this NOFA; (3)

acquiring/enhancing technology items;

and (4) acquiring training for staff or

management. The Fund will not

consider requests under this NOFA for

expenses that, in the determination of

the Fund, are deemed to be ongoing

operating expenses rather than nonrecurring expenses. The Fund will

consider requests for use of TA to pay

for staff salary only when the applicant

demonstrates and represents that: the

proposed staff time to be paid for by the

TA will be used for, generally speaking,

a non-recurring activity that will build

the applicant’s capacity to achieve its

objectives as set forth in its

Comprehensive Business Plan; the

proposed capacity-building activity

would otherwise be contracted to a

consultant or not be undertaken; and the

staff person assigned to the proposed

task has the competence to successfully

complete the activity.

This limited use of TA may cover

only that portion of a staff person(s)

salary that represents the time that staff

person(s) spends on the identified

capacity-building activities, but must

not exceed 50% of said salary for a

period not to exceed 24 months. For

example, it may be an eligible use of a

TA grant to pay the salary of staff

assigned the task of updating a market

analysis or designing underwriting

criteria for a new loan product, when

the market analysis or the loan product

is critical to achieving the objectives of

the Comprehensive Business Plan. A TA

award may not be used to assist an

awardee to prepare an application for

funding to the Fund or any other source.

Phase Two

Once the initial substantive

evaluation process is complete, the

Fund will determine which applications

will receive further consideration for

funding. The Fund will make that

determination based on application

scores (standardized if deemed

appropriate), recommendations of

individuals performing initial reviews,

and the amount of funds available.

Applicants that advance to Phase Two

may receive a site visit(s) and/or

telephone interview(s) conducted by a

Fund reviewer for the purpose of

obtaining clarifying or confirming

information. At this point in the

process, applicants may be required to

submit additional clarifying information

about their application in order to assist

the Fund with its final evaluation. After

conducting such site visit(s) and/or

telephone interview(s), the Fund

reviewer will evaluate applications in

accordance with the criteria outlined

above and will prepare a

recommendation memorandum

regarding the type, uses and amount, if

any, of assistance that should be

provided to the applicant.

The Fund reserves the right, in its sole

discretion, to use a review panel

comprised of Fund staff to consider

each Fund reviewer’s recommendation

memorandum and make a final

recommendation to the Fund’s selecting

official. The Fund’s selecting official

will consider the panel’s

recommendation, if applicable, and the

reviewer’s recommendation

memorandum in order to make the final

funding decision. In making the funding

decision, the Fund’s selecting official

also may consider the institutional

diversity and geographic diversity of

applicants (e.g., selecting a CDFI from a

State in which the Fund has not

previously made an award over a CDFI

in a State in which the Fund has already

made several awards).

Further, the Fund’s selecting official

will make a final funding determination

based on the applicant’s file, including,

without limitation, recommendations of

the Phase One reader(s), the Phase Two

reviewer, the panel, if applicable, and

the amount of funds available. In the

case of regulated CDFIs, the selecting

official will also take into consideration

the views of the appropriate Federal

banking agencies. In the case of

recommendations for TA awards over

$50,000, the Fund will seek to ensure

that there is a likelihood of significant

community development impact

resulting from such awards.

The Fund reserves the right to change

these evaluation procedures if the Fund

deems it appropriate.

V. Waiver

The CDFI Program Regulations at 12

CFR §§ 1805.504(d)(4)(i)(A) and

1805.504(d)(4)(i)(B) provide that an

applicant that is an Insured Credit

Union proposing to meet all or a portion

of its matching funds requirements by

using retained earnings that have been

accumulated since its inception must

increase its member and/or non-member

shares by an amount that is at least

equal to four times the amount of

retained earnings that is committed as

matching funds within 24 months from

September 30 of the calendar year in

which the applicable application

deadline falls. For purposes of this

NOFA, the Fund is waiving said fourfold requirement and will instead

require that such an Insured Credit

Union applicant must increase its

member and/or non-member shares by

an amount that is at least equal to two

times the amount of retained earnings

that is being used as matching funds by

September 30, 2003. The Fund believes

that changing this requirement, for

purposes of the SECA Component

NOFA, from a four-fold to a two-fold

requirement is an appropriate

accommodation for entities that are

‘‘small and emerging.’’

VI. Information Sessions

In connection with this NOFA, the

Fund will conduct Information Sessions

to disseminate information to

organizations contemplating applying

for, and other organizations interested

in learning about, the SECA Component

of the CDFI Program. Registration is

Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices 70767

required. The Fund will conduct 13 inperson Information Sessions, beginning

January 4, 2001, as follows: Baltimore,

MD, January 4, 2001; Manchester, NH,

January 5, 2001; Seattle, WA, January 8,

2001; Casper, WY, January 9, 2001;

Chicago, IL, January 10, 2001; Los

Angeles, CA, January 9, 2001; Nashville,

TN, January 11, 2001; Reno, NV, January

11, 2001; Phoenix, AZ, January 12,

2001; Kansas City, MO, January 16,

2001; Dallas, TX, January 17, 2001;

Jacksonville, FL, January 18, 2001; and

Jersey City, NJ (New York City), January

19, 2001.

In addition to the in-person sessions

listed above, the Fund will broadcast an

Information Session using interactive

video-teleconferencing technology on

January 23, 2001 from 1 p.m. to 4 p.m.

EST. Registration is required. This

Information Session will be produced in

Washington, DC, and will be

downlinked via satellite to the local

Department of Housing and Urban

Development (HUD) offices located in

the following cities: Albany, NY:

Albuquerque, NM; Anchorage, AK;

Atlanta, GA; Baltimore, MD; Bangor,

ME; Birmingham, AL; Boise, ID; Boston,

MA; Buffalo, NY; Burlington, VT;

Camden, NJ; Casper, WY; Charleston,

WV; Chicago, IL; Cincinnati, OH;

Cleveland, OH; Columbia, SC;

Columbus, OH; Dallas, TX; Denver, CO;

Des Moines, IA; Detroit, MI; Fargo, ND;

Flint, MI; Fort Worth, TX; Fresno, CA;

Grand Rapids, MI; Greensboro, NC;

Hartford, CT; Helena, MT; Honolulu, HI;

Houston, TX; Indianapolis, IN; Jackson,

MS; Jacksonville, FL; Kansas City, KS;

Knoxville, TN; Las Vegas, NV; Little

Rock, AR; Los Angeles, CA; Louisville,

KY; Lubbock, TX; Manchester, NH;

Memphis, TN; Miami, FL; Milwaukee,

WI; Minneapolis/St. Paul, MN;

Nashville, TN; New Orleans, LA; New

York, NY; Newark, NJ; Oklahoma City,

OK; Omaha, NE; Orlando, FL;

Philadelphia, PA; Phonix, AZ;

Pittsburgh, PA; Portland, OR;

Providence, RI; Reno, NV; Richmond,

VA; Sacramento, CA; St. Louis, MO; Salt

Lake City, UT; San Antonio, TX; San

Diego, CA; San Francisco, CA; San Juan,

PR; Santa Ana, CA; Seattle, WA;

Shreveport, LA; Sioux Falls, SD;

Spokane, WA; Springfield, IL; Syracuse,

NY; Tampa, FL; Tucson, AZ; Tulsa, OK;

Washington, DC; and Wilmington, DE.

Additional information sessions

targeting specific locations and/or

populations may be added to this list;

please visit the Fund’s web site for

further information.

For more information, or to register

for an Information Session, please

contact the Fund at (202) 622–8662 or

visit the Fund’s web site at http://

www.treas.gov/cdfi.

Authority: 12 U.S.C. 4703, 4703 note, 4704,

4706, 4707, and 4717; 12 CFR part 1805.

Dated: November 21, 2000.

Maurice A. Jones,

Director, Community Development Financial

Institutions Fund.

[FR Doc. 00–30154 Filed 11–24–00; 8:45 am]

BILLING CODE 4810–70–7