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###### Department of the Treasury

# AGENCY:

Office of the Assistant Secretary for Financial Institutions, Department of the Treasury. 

# ACTION:

Notice of Funds Availability (NOFA) inviting applications. 

# SUMMARY:

The Consolidated Appropriations Act, 2001 (Public Law 106-554, 114 Stat. 2763, 2763A-126) and the Department of Transportation and Related Agencies Appropriations Act, 2001 (Public Law 106-346, 114 Stat. 1356, 1356A-44) appropriated funds to the Department of the Treasury (“Treasury”) to develop and implement programs to expand access to financial services for low- and moderate-income individuals (the “First Accounts Program”). This NOFA invites grant applications from eligible entities that will either directly, or through one or more insured depository institutions/insured credit unions, provide low-cost electronic, checking, or other types of accounts to low- and moderate-income individuals who currently do not have an account with an insured depository institution or an insured credit union. The paramount goal of the First Accounts Program grants to be awarded under this NOFA is to move a maximum number of “unbanked” low- and moderate-income individuals to a “banked” status with either an insured depository institution or an insured credit union. Treasury intends to award up to $8 million in appropriated funds under this NOFA. Treasury reserves the right to award in excess of $8 million in appropriated funds under this NOFA provided that the funds are available, and Treasury deems it appropriate. Eligible entities include, but are not limited to, insured depository institutions, insured credit unions, financial services electronic networks, employers of unbanked low- and moderate-income individuals, community development financial institutions, nonprofit organizations, States, Local Governments, Indian Tribal Governments, and labor organizations. 

# DATES:

                        Applications may be submitted at any time, commencing December 27, 2001, and may be submitted by mail or by overnight/express delivery service, or electronically, in the format prescribed by Treasury. (Applications sent by facsimile or delivered by hand will not be accepted). The deadline for receipt of an application is March 20, 2002. Paper applications received in the specific Treasury office designated below after that date will not be considered, except as follows. An application mailed via the United States Postal Service will be considered as having met the application deadline if it is clearly postmarked on or before midnight March 20, 2002. An application sent by overnight/express delivery will be considered as having met the application deadline if it is placed in transit by no later than March 20, 2002 with an overnight/express delivery service. In each such case, it is advisable to obtain documentation from the carrier showing the date the application was placed in transit. A single, clear date stamp will help in determining whether the delivery of a paper application has met the deadline requirements set forth above. Electronic applications received at the specific email address set forth below after March 20, 2002 will not be considered. While Treasury will accept electronic applications, it is currently unable to collect electronic signatures for the First Accounts Program. As a result, an applicant sending an application electronically shall also submit by mail or overnight/express delivery service signed and dated hardcopy signature pages and certifications contained in the First Accounts Program application packet. Such hardcopies must be                               ( print page 66976)                            received in the specific Treasury office designated below by 6 p.m. EST on April 3, 2002. Hardcopy signature pages and certifications received in the specific Treasury office designated below after that date and time will result in the related application being eliminated from consideration for a grant award.                     

# ADDRESSES:

                        Paper applications shall be sent to: Department of the Treasury, ATTN: First Accounts, Main Treasury Building, Room 5017, Washington, DC 20220. Electronic applications shall be sent to:                         *first.accounts@do.treas.gov.*

# OBTAIN APPLICATIONS:

                        Applications are available on the Treasury website at                         *www.treas.gov/​firstaccounts.*

# FOR FURTHER INFORMATION CONTACT:

                        Questions regarding the programmatic requirements for the First Accounts Program may be submitted electronically to Jean Whaley, Director, Office of the Assistant Secretary for Financial Institutions, at                         *jean.whaley@do.treas.gov.*                         All questions and accompanying answers will be posted and made available to the public at                         *www.treas.gov/​firstaccounts.*

# SUPPLEMENTARY INFORMATION:

## I. Background 

Without basic financial services, low- and moderate-income individuals may have a reduced ability to manage their finances, and may be limited in planning and saving for the future. Such individuals may have limited access to other financial products such as credit cards, residential mortgages, or automobile loans. Some of the reasons why low- and moderate-income individuals do not have bank accounts are a lack of low-cost account products tailored to meet their needs, previous problems with bank accounts, insufficient convenient access, a lack of consumer education, and a financial services provider perception that such accounts may not be profitable. The Federal Reserve's 1998 Survey of Consumer Finances indicates that nearly one out of ten families in the United States lacks either a checking or savings account. Most of those families had annual incomes below $25,000, and most lived in low- and moderate-income service areas. 

To address this disparity, Congress appropriated funds for the First Accounts Program. Specifically, the Consolidated Appropriations Act, 2001 (Public Law 106-554, 114 Stat. 2763, 2763A-126) and the Department of Transportation and Related Agencies Appropriations Act, 2001 (Public Law 106-346, 114 Stat. 1356, 1356A-44) authorized the Department of the Treasury (“Treasury”) to develop and implement programs to expand access to financial services for low- and moderate-income individuals. Treasury will implement the First Accounts Program through three related mechanisms: (1) Funding private sector provision of low-cost accounts and access to Automated Teller Machines (“ATMs”) to low- and moderate-income individuals who do not currently utilize bank accounts or other financial service opportunities; (2) funding financial education for low- and moderate-income individuals; and (3) conducting research on the financial services needs of low- and moderate-income individuals (this is not the subject of this NOFA). This NOFA invites grant applications from eligible entities that will, either directly or through one or more partners, provide low-cost electronic, checking, or other types of accounts and access to ATMs to low- and moderate-income individuals who currently do not have an account with an insured depository institution or an insured credit union. The paramount goal of the First Accounts Program grants to be awarded under this NOFA is to move a maximum number of “unbanked” low- and moderate-income income individuals to a “banked” status with either an insured depository institution or an insured credit union through the development of financial products and services that can serve as replicable models in meeting the financial services needs of such individuals in other communities without the need for ongoing public subsidies. Additional goals include the provision of financial education to unbanked low- and moderate-income individuals to enhance the sustainability of the new financial relationship. The following contains an illustrative listing of the types of projects that are eligible to be funded under this NOFA: 

(1) An insured depository institution/insured credit union partnering with one or more small business enterprises that are employers of unbanked low- and moderate-income individuals to provide such employees with both low-cost electronic accounts, and increased access to ATMs through the placement of one or more ATMs on-site. 

(2) An insured depository institution or an insured credit union providing low-cost checking accounts to unbanked low- and moderate-income individuals. 

(3) An insured depository institution or an insured credit union providing low-cost electronic accounts to unbanked low- and moderate-income individuals. 

(4) A labor organization, whose membership consists of unbanked low- and moderate-income individuals, establishing a low-income designated insured credit union or an insured credit union that will become certified as a community development financial institution. 

(5) A faith based nonprofit organization partnering with one or more insured depository institutions/insured credit unions to provide low-cost accounts and financial education for unbanked low- and moderate-income individuals. 

(6) An Indian Tribal Government partnering with one or more insured depository institutions and/or insured credit unions to provide unbanked low- and moderate-income tribal members with low-cost electronic accounts, financial education, and increased access to funds through the placement of ATMs on the Indian reservation. 

(7) An insured community development financial institution partnering with service industry employers (e.g. fast food restaurant franchisees) to provide unbanked low- and moderate-income employees with free checking accounts, provided a minimum account balance of $100 is maintained. 

Treasury intends to award up to $8 million in appropriated funds under this NOFA. Treasury reserves the right to award in excess of $8 million in appropriated funds under this NOFA provided that the funds are available, and Treasury deems it appropriate. Treasury reserves the right to fund, in whole or in part, any, all, or none of the applications submitted in response to this NOFA. 

## II. Eligibility 

                    In order to be eligible to receive funding under this NOFA, an eligible entity shall, at a minimum, propose to provide low-cost electronic, checking or other types of accounts to “unbanked” low- and moderate-income individuals either directly (in the case of an applicant that is an insured credit union or an insured depository institution) or indirectly through one or more insured depository institutions and/or insured credit unions. In addition, only projects that propose new activities or expand existing activities will be considered eligible for funding under this NOFA. Eligible entities include community development financial institutions, depository institution holding companies, employers, financial services electronic networks, Indian Tribal Governments, insured credit unions (as an insured credit union's charter and field of membership allow),                           ( print page 66977)                        insured depository institutions, labor organizations, Local Governments, non-profit organizations, and States. Individuals are not eligible to receive funding under this NOFA. Each application shall identify a single applicant, which must, at the time of application, be a duly organized and validly existing legal entity under the laws of the jurisdiction in which it is incorporated or otherwise established.                 

## III. Application Packet 

                    An applicant under this NOFA must submit the materials described in the application packet in the format prescribed therein. Applications are available on the Treasury website at                     *www.treas.gov/​firstaccounts.*

## IV. Definitions 

The following definitions shall apply to the terms contained in this NOFA and the application packet: 

                    (a)                     *Community development financial institution*                     means an organization that has been certified as such pursuant to 12 CFR § 1805.201 by the Department of the Treasury's Community Development Financial Institutions Fund.                 

                    (b)                     *Depository institution holding company*                     means a bank holding company or a savings and loan holding company as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1)).                 

                    (c)                     *Electronic account*                     means an account at an insured credit union or an insured depository institution that has the following minimum features: (1) Electronic access; and (2) provides the same consumer protections that are available to other account holders at the same institution.                 

                    (d)                     *Eligible entity*                     means any legal entity including a corporation, partnership, governmental body, agency, or association, other than an agency or instrumentality of the United States.                 

                    (e)                     *Employee*                     means an individual who provides services or labor for an employer for wages or other remuneration but does not mean independent contractors.                 

                    (f)                     *Employer*                     means a person or entity that engages the services or labor of low- and moderate-income employees to be performed in the United States for wages or other remuneration, but shall not include an agency or instrumentality of the United States.                 

                    (g)                     *Financial services electronic network*                     means an organization or entity that provides electronic access to an individual's account at an insured credit union or an insured depository institution, including an automated teller machine network, point-of-sale-network, and a provider of such services through the Internet.                 

                    (h)                     *Indian reservation*                     has the same meaning as in section 4(10) of the Indian Child Welfare Act of 1978 (25 U.S.C. 1903(10)) and, to the extent not already included, shall include lands held by incorporated Native groups, regional corporations, and village corporations, as defined or established pursuant to the Alaska Native Claims Settlement Act; public domain Indian allotments; and former Indian reservations in the State of Oklahoma.                 

                    (i)                     *Indian Tribal Government*                     means any Indian Tribe, band, pueblo, nation, or other organized group or community, including any Alaska Native village or regional or village corporation, as defined in or established pursuant to the Alaska Native Claims Settlement Act which is recognized as eligible for special programs and services provided by the United States to Indians because of their status as Indians.                 

                    (j)                     *Insured credit union*                     means any credit union, the member accounts of which are insured by the National Credit Union Share Insurance Fund.                 

                    (k)                     *Insured depository institution*                     means any bank or savings association, the deposits of which are insured by the Federal Deposit Insurance Corporation.                 

                    (l)                     *Labor organization*                     means an organization of any kind in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.                 

                    (m)                     *Local Government*                     means a political subdivision of a State including, without limitation, a county, municipality, city, town, township, local public authority school district, special district, intrastate district, or any agency or instrumentality of any of the foregoing.                 

                    (n)                     *Low- and moderate-income*                     means a family income that does not exceed—(1) for nonmetropolitan areas, 80 percent of the statewide median family income; or (2) for metropolitan areas, 80 percent of the greater of the statewide median family income or metropolitan area median family income.                 

                    (o)                     *Low- and moderate-income service*                     area means: (1) An Indian reservation; (2) any population census tract located within a metropolitan area in which the median family income does not exceed 80 percent of the greater of the statewide median family income or the metropolitan median family income; or (3) any population census tract which is not located within a metropolitan area in which the median family income does not exceed 80 percent of statewide median family income.                 

                    (p)                     *Low-income designated credit*                     union means an insured credit union that meets the criteria contained in 12 CFR 701.34.                 

                    (q)                     *State*                     means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of any of the foregoing.                 

                    (r)                     *Unbanked*                     means an individual who currently does not have an account at an insured credit union or an insured depository institution.                 

## V. Evaluation 

All applications will be reviewed for eligibility and completeness. If determined to be eligible and complete, applications will be evaluated by Treasury on a competitive basis in accordance with the criteria contained in this NOFA. 

### Phase One—Scoring Review 

In conducting its initial substantive review, Treasury will evaluate each application and assign numeric scores using a 100 point scale as follows: 

(a) The Likelihood of Success Criterion (the extent to which the project: (1) Will serve a meaningful number of unbanked low- and moderate-income individuals; (2) is shown to be likely to result in the provision of both low-cost electronic, checking or other types of accounts, and expanded access to ATMs, to such individuals; (3) demonstrates that costs to be incurred by low- and moderate-income individuals are the least necessary to achieve goals; and (4) actively involves employers of unbanked low- and moderate-income individuals): 20 points maximum 

(b) The Reasonableness of Approach Criterion (the extent to which project activities demonstrate a well-researched and well-reasoned approach toward expanding the provision of financial products and services to unbanked low- and moderate-income individuals): 20 points maximum. 

(c) The Self-Sustaining Criterion (the extent to which the project activities can become self-supporting): 15 points maximum. 

(d) The Model Qualities Criterion (the extent to which the project demonstrates a replicable framework on a national, regional, State, or local basis): 10 points maximum. 

                    (e) The Timeliness Criterion (the extent of the speed in which the project will be rolled out and begin to achieve measurable, positive results): 10 points.                           ( print page 66978)    

(f) The Performance Goal Setting Criterion (the extent to which the project has specific, measurable, and relevant performance goals): 10 points. 

(g) The Experience/Track Record Criterion (the extent to which the applicant and other participating entities have previous experience on projects of a similar scale and scope, and have a track record of success in carrying out such projects): 10 points. 

(h) The Management Capability Criterion (the extent to which the management team has the demonstrated ability to manage projects): 5 points. 

In order to be considered eligible to advance to the next phase of substantive review, an applicant must receive a minimum score of 50 points. 

### Conditional Selection/Second Phase Review 

                    Once the initial evaluation is completed, Treasury will determine which of those applications that received at least 50 points will be conditionally selected based on the Phase One scores and the amount of funds available. In addition, Treasury will seek to conditionally select a group of applicants whose projects are geographically diverse,                     *e.g.*, covering metropolitan, nonmetropolitan, and rural areas as well as different regions of the United States.                 

Once Treasury determines which applicants have been conditionally selected, Treasury will contact such applicants and may interview third parties to obtain clarifying or confirming information on each conditionally selected applicant. Once such information has been collected and analyzed, Treasury staff will make a recommendation to the Treasury selecting official who will make a final funding decision based on the applicant's file including, without limitation, Phase One evaluations and Phase Two recommendations, the amount of funds available, and geographic and institutional diversity considerations. 

### Award Requirements 

Each awardee will be required to enter into a grant agreement with Treasury before it may begin project activities and receive a Treasury disbursement of grant funds. The terms and requirements for funding will be set forth in both a Notice of Award and the grant agreement. Some of these requirements are as follows: 

(a) Grant funds can only be used for the purposes set forth in the grant agreement. 

(b) Each awardee will be responsible for completing the project and expending the grant funds within the time period set forth in the grant agreement. 

(c) Each awardee will be required to submit periodic reports and a final report to Treasury. 

Authority:Pub. L. 106-554, 114 Stat. 2763, 2763A-126; Pub. L. 106-346, 114 Stat. 1356, 1356A-44; 31 U.S.C. 321. 

Dated: December 17, 2001. 

Sheila C. Bair, 

Assistant Secretary for Financial Institutions. 

[FR Doc. 01-31818 Filed 12-26-01; 8:45 am] 

BILLING CODE 4810-25-P