87 FR 186 pgs. 58639-58644 - Notice of Information Collection and Request for Public Comment
Type: NOTICEVolume: 87Number: 186Pages: 58639 - 58644
Pages: 58639, 58640, 58641, 58642, 58644FR document: [FR Doc. 2022-20732 Filed 9-26-22; 8:45 am]
Agency: Treasury Department
Sub Agency: Community Development Financial Institutions Fund
Official PDF Version: PDF Version
[top]
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Information Collection and Request for Public Comment
ACTION:
Notice and request for public comment.
SUMMARY:
The U.S. Department of the Treasury, as part of a 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 Bank Enterprise Award Program (BEA Program) Application (Application). The Application is an online form submitted through the CDFI Fund's Awards Management Information System (AMIS).
DATES:
Written comments must be received on or before November 28, 2022 to be assured of consideration.
ADDRESSES:
Submit your comments via email to Tanya McInnis, Program Manager for the Depository Institutions Initiatives, CDFI Fund at bea@cdfi.treas.gov.
FOR FURTHER INFORMATION CONTACT:
Tanya McInnis, BEA Program, Program Manager, CDFI Fund, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220, (202) 653-0421 (not a toll-free number). Other information regarding the CDFI Fund and its programs may be obtained on the CDFI Fund website at https://www.cdfifund.gov. The BEA Program Application Template, which presents the questions that will comprise the online Application, may be obtained from the BEA Program page of the CDFI Fund website at https://www.cdfifund.gov/bea.
SUPPLEMENTARY INFORMATION:
Title: BEA Program Application.
OMB Number: 1559-0005.
[top] Abstract: The purpose of the Bank Enterprise Award Program (BEA Program) is to provide an incentive to
Current Actions: Extension without change of currently approved collection.
Type of Review: Regular.
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: 180.
Frequency of Response: Annually.
Estimated Total Number of Annual Responses: 180.
Estimated Annual Time per Respondent including optional questions: 60 hours.
Estimated Total Annual Burden Hours: 10,800.
Request 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 website at https://www.cdfifund.gov.
The CDFI Fund is seeking: (a) specific input on the BEA Program Application; and (b) general input on other BEA Program-related topics and considerations. Commentators should ensure that their comments are clearly labeled in order to distinguish those related to: (a) the BEA Program Application or, (b) other BEA Program related topics and considerations. The Application may be obtained on BEA Program page of the CDFI Fund's website at https://www.cdfifund.gov/programs-training/Programs/bank_enterprise_award/Pages/apply-step.aspx#step1.
Commentators are encouraged to consider, at a minimum, the following topics:
A. BEA Program Application
Comments concerning the Application 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 BEA Program Application:
1. Is the data and information that is proposed to be collected by the BEA Program Application necessary and appropriate for the CDFI Fund to consider for the purpose of making award decisions?
2. In general, does the data and information requested in the BEA Program Application allow an applicant to demonstrate its lending, investment and service activities in BEA Program Distressed Communities or to CDFIs?
3. Are certain data fields, questions or tables redundant or unnecessary?
4. Should any data fields, questions or tables be added to ensure collection of relevant information?
5. Are there any data fields, questions or tables that are particularly difficult or burdensome to answer? If so, please be specific as to which questions or tables and describe why they are difficult or burdensome.
6. The CDFI Fund considers the safety and soundness of BEA Program Applicants in making award decisions. Currently, through Memorandums of Understanding with federal regulators, the CDFI Fund obtains safety and soundness information directly from the Federal Reserve Board, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The CDFI Fund is considering requiring Applicants to report on their safety and soundness by requesting that they provide information on their most recent independent audit, their most recent Community Reinvestment Act (CRA) Rating, and information on any enforcement actions. The collection of this information from Applicants would be used to consider an Applicant's eligibility before the CDFI Fund receives information from federal regulators.
a. How much of a burden will the collection of this information be for Applicants?
b. Are there any reasons that the CDFI Fund should not request this information from Applicants? If yes, please describe.
c. Is there anything else the CDFI Fund should consider? If yes, please describe.
7. The CDFI Fund is considering adding the following text entry fields in order to improve the quality of impact data collected in the BEA Program Application. This information will allow the CDFI Fund to standardize and effectively report quantitative and qualitative social impacts of program related investments.
Business Description: Applicants will be required to provide a brief description of the entity or business that received the loan or investments. For example, for Commercial Loans and Investments, if an Applicant provided a commercial real estate loan to a widget manufacturing business so that it could purchase a warehouse in a distressed community, the Applicant would describe the business, using this text entry field as `Commercial Real Estate Loan to Widget Manufacturing Business for Warehouse Purchase.' If implemented, there will be character limits and the CDFI Fund will provide additional examples.
[top]
| Activity type | Abbreviation | Current impact reporting guidance | Proposed enhancement |
|---|---|---|---|
| Affordable Housing Development Loans and Project Investments | AHD | Total number of affordable units developed or rehabilitated as part of the transaction | Picklist: Single Family; Multi-Family. |
| Commercial Real Estate Loans and Project Investments | CRE | Total number of commercial real estate properties acquired, developed or rehabilitated | Picklist-Acquisition; Development; Rehabilitation. |
| Small Business Loans and Project Investments | SBL | Total number of full-time equivalent jobs created or maintained by borrower | Picklist-Working Capital; Business Expansion; Business Startup; Fixed Capital; Equipment; Other. |
| Financial Services | FS | Number of accounts opened, checks cashed, etc | Picklist-Accounts Opened; Checks Cashed; New Branch, New ATM, Other. |
| Targeted Financial Services | TFS | Number of accounts opened, checks cashed, etc | Picklist-Accounts Opened; Checks Cashed; Other. |
| Targeted Savings Products | TSP | Number of products developed, sold or opened | Text box-Describe the Product Type. |
| Community Services | CS | Number of individuals who received the identified service | Text box-Describe the Type of Community Services Provided. |
Impact: A further description of the impact of the loan, investment or service activity would be required. This will help to contextualize the numerical impact data currently collected. Currently, Applicants are only required to provide numerical impact information for certain activity types. This new text entry field would add a picklist or text entry box which would depend on the activity type. Refer to the table below for examples of impact as it relates to specific BEA Qualified Activities.
Impact Reporting Enhancements:
a. Will reporting this information significantly increase the number of hours spent completing the BEA Program Application?
b. Are there any reasons that the CDFI Fund should not collect this information? If yes, what are they?
c. Is there any additional information or data that demonstrates the impact of program related investments that the CDFI Fund should consider? If yes, list and describe them.
8. The CDFI Fund is considering adding the following fields to collect basic information on the affordability of financial products reported to the CDFI Fund in the BEA Program Application for award consideration. This data will be used to perform future analyses to better understand the affordability of program related lending and may inform future policy considerations. For BEA Qualified Activities that are loans, Applicants will be asked to provide:
Interest Rate, Interest Type, and Term: Applicants will input the interest rate, select the interest type as either `Fixed' or `Variable,' and provide the Term as the number of months. These fields will provide important insight into the pricing and terms offered to borrowers that receive loans from BEA Program Applicants.
Origination Fees and Points: Applicants will input this numerically as basis points. This field will help the CDFI Fund to better understand the overall cost of loans made by BEA Program Applicants.
a. How much of a burden will the collection of this information be for Applicants?
b. Are there any reasons that the CDFI Fund should not collect this information? If yes, what are they?
For all BEA Qualified Activities:
c. Is there any additional information or data that demonstrates the affordability of program related loans or investments that the CDFI Fund should consider? If yes, list and describe them.
B. Other BEA Program-Related Topics and Considerations
Commentators should clearly distinguish their comments related to this section when providing their responses.
1. BEA Program Categories, Subcategories and Qualified Activities Definitions
The BEA Program defines the Qualified Activities, Categories and Subcategories in the BEA Program Interim Rule dated August 10, 2016 (12 CFR 1806). These definitions are also provided below:
[top]
| Category, subcategory, activity type, and other related terms | Interim rule definition |
|---|---|
| CDFI Related Activities | Means Equity Investments, Equity-Like Loans, and CDFI Support Activities. |
| Equity Investment | Means financial assistance provided by an Applicant or its Subsidiary to a CDFI, which CDFI meets such criteria as set forth in the applicable NOFA, in the form of a grant, a stock purchase, a purchase of a partnership interest, a purchase of a limited liability company membership interest, or any other investment deemed to be an Equity Investment by the CDFI Fund. |
| Equity-Like Loan | Means a loan provided by an Applicant or its Subsidiary to a CDFI, and made on such terms that it has characteristics of an Equity Investment that meets such criteria as set forth in the applicable NOFA. |
| CDFI Support Activity | Means assistance provided by an Applicant or its Subsidiary to a CDFI that meets criteria set forth by the CDFI Fund in the applicable NOFA and that is Integrally Involved in a Distressed Community, in the form of the origination of a loan, Technical Assistance, or deposits, as further specified in the applicable NOFA. |
| Distressed Community Financing Activities | Means: (1) Consumer Loans; or (2) Commercial Loans and Investments. |
| Consumer Loans | Means the following lending activity types: Affordable Housing Loans; Education Loans; Home Improvement Loans; and Small Dollar Consumer Loans. |
| Affordable Housing Loan | Means origination of a loan to finance the purchase or improvement of the borrower's primary residence, and that is secured by such property, where such borrower is an Eligible Resident who meets Low- and Moderate-Income requirements. Affordable Housing Loan may also refer to second (or otherwise subordinated) liens or "soft second" mortgages and other similar types of down payment assistance loans, but may not necessarily be secured by such property originated for the purpose of facilitating the purchase or improvement of the borrower's primary residence, where such borrower is an Eligible Resident who meets Low- and Moderate-Income requirements. |
| Education Loan | Means an advance of funds to a student who is an Eligible Resident who meets Low- and Moderate-Income requirements for the purpose of financing a college or vocational education. |
| Home Improvement Loan | Means an advance of funds, either unsecured or secured by a one-to-four family residential property, the proceeds of which are used to improve the borrower's primary residence, where such borrower is an Eligible Resident who meets Low- and Moderate-Income requirements. |
| Small Dollar Consumer Loan | Means affordable consumer lending products that serve as available alternatives in the marketplace for individuals who are Eligible Residents who meet Low- and Moderate-Income requirements and meet criteria further specified in the applicable NOFA. |
| Commercial Loans and Investments | Means the following lending types: Affordable Housing Development Loans and related Project Investments; Small Business Loans and related Project Investments, and Commercial Real Estate Loans and related Project Investments. |
| Affordable Housing Development Loan | Means origination of a loan to finance the acquisition, construction, and/or development of single- or multifamily residential real property, where at least 60% of the units in such property are affordable, as may be defined in the applicable NOFA, to Eligible Residents who meet Low- and Moderate-Income requirements. |
| Small Business Loan | Means an origination of a loan used for commercial or industrial activities (other than an Affordable Housing Loan, Affordable Housing Development Loan, Commercial Real Estate Loan, Home Improvement Loan) to a business or farm that meets the size eligibility standards of the Small Business Administration's Development Company or Small Business Investment Company programs (13 CFR 121.301) and is located in a Distressed Community. |
| Commercial Real Estate Loan | Means an origination of a loan (other than an Affordable Housing Development Loan or Affordable Housing Loan) that is secured by real estate and used to finance the acquisition or rehabilitation of a building in a Distressed Community, or the acquisition, construction and or development of property in a Distressed Community, used for commercial purposes. |
| Service Activities | Means the following activities: Deposit Liabilities; Financial Services; Community Services; Targeted Financial Services; and Targeted Retail Savings/Investment Products. |
| Deposit Liabilities | Means time or savings deposits or demand deposits. Any such deposit must be accepted from Eligible Residents at the offices of the Applicant or of the Subsidiary of the Applicant and located in the Distressed Community. Deposit Liabilities may only include deposits held by individuals in transaction accounts ( e.g., demand deposits, negotiable order of withdrawal accounts, automated transfer service accounts, and telephone or preauthorized transfer accounts) or non-transaction accounts ( e.g., money market deposit accounts, other savings deposits, and all time deposits), as defined by the Appropriate Federal Banking Agency. |
| Financial Services | Means check cashing, providing money orders and certified checks, automated teller machines (ATM), safe deposit boxes, new branches, and other comparable services as may be specified by the CDFI Fund in the applicable NOFA, that are provided by the Applicant to Eligible Residents or enterprises that are Integrally Involved in the Distressed Community. |
| Community Services | Means the following forms of assistance provided by officers, employees or agents (contractual or otherwise) of the Applicant: (1) Provision of Technical Assistance and financial education to Eligible Residents regarding managing their personal finances; |
| (2) Provision of Technical Assistance and consulting services to newly formed small businesses and nonprofit organizations located in the Distressed Community; | |
| (3) Provision of Technical Assistance and financial education to, or servicing the loans of, homeowners who are Eligible Residents and meet Low- and Moderate-Income requirements; and | |
| (4) Other services provided to Eligible Residents who meet Low- and Moderate-Income requirements or enterprises that are Integrally Involved in a Distressed Community, as deemed appropriate by the CDFI Fund, and other comparable services as may be specified by the CDFI Fund in the applicable NOFA. | |
| Other Related Terms: | |
| Targeted Financial Services | Means ETAs, IDAs, and such other banking products targeted to Eligible Residents, as may be specified by the CDFI Fund in the applicable NOFA. |
| Targeted Retail Savings/Investment Products | Means certificates of deposit, mutual funds, life insurance, and other similar savings or investment vehicles targeted to Eligible Residents, as may be specified by the CDFI Fund in the applicable NOFA. |
| Electronic Transfer Account (ETA)? 1 | Means an account that meets the following requirements, and with respect to which the Applicant has satisfied the requirements: (1) Be an individually owned account at a Federally insured financial institution; (2) Be available to any individual who receives a Federal benefit, wage, salary, or retirement payment; (3) Accept electronic Federal benefit, wage, salary, and retirement payments and such other deposits as a financial institution agrees to permit; (4) Be subject to a maximum price of $3.00 per month; (5) Have a minimum of four cash withdrawals and four balance inquiries per month, to be included in the monthly fee, through: (i) The financial institution's proprietary (on-us) automated teller machines (ATMs); (ii) Over-the-counter transactions at the main office or a branch of the financial institution; or (iii) Any combination of on-us ATM access and over-the-counter access at the option of the financial institution; (6) Provide the same consumer protections that are available to other account holders at the financial institution, including, for accounts that provide electronic access, Regulation E (12 CFR part 205) protections regarding disclosure, limitations on liability, procedures for reporting lost or stolen cards, and procedures for error resolution; (7) For financial institutions that are members of an on-line point-of-sale (POS) network, allow on-line POS purchases, cash withdrawals, and cash back with purchases at no additional charge by the financial institution offering the ETA; (8) Require no minimum balance, except as required by Federal or State law; (9) At the option of the financial institution, be either an interest-bearing or a non-interest-bearing account; and (10) Provide a monthly statement. |
| Individual Development Account (or IDA)? 2 | Means a special savings account that matches the deposits of Eligible Residents who meet Low- and Moderate-Income requirements individuals and that enables such individuals to save money for a particular financial goal including, but not limited to, and as determined by the CDFI Fund: buying a home, paying for post-secondary education, or starting or expanding a small business. |
| Technical Assistance? 3 | Means the provision of consulting services, resources, training, and other nonmonetary support relating to an organization, individual, or operation of a trade or business, as may be specified by the CDFI Fund in the applicable NOFA. |
| 1 ?Included in the definition of Targeted Financial Securities. | |
| 2 ?Ibid. | |
| 3 ?Included in the definitions of: CDFI Support Activity and Community Services. | |
a. New Qualified Activities
(1) Are there any loan, investment or service activities not currently considered BEA Program Qualified Activities that the CDFI Fund should consider adding? If so, indicate what the activity is, describe it, and explain why the CDFI Fund should consider it. Also, describe the benefits of the activity to CDFIs, residents or businesses in Distressed Communities.
(2) The CDFI Fund does not currently have a specific Qualified Activity type for working capital or equipment loans. These types of loans are typically reported as Small Business Loans if the borrower meets the size eligibility standards. Should the CDFI Fund consider introducing a new Qualified Activity type specifically for working capital or equipment loans for businesses located in Distressed Communities that do not meet the criteria for a Small Business Loans? Please explain why or why not.
(3) The CDFI Fund does not currently have specific guidance for reverse mortgages. A reverse mortgage is a mortgage loan available to homeowners 62 years of age and older, usually secured over a residential property that enables the borrower to access the unencumbered value of the property. Should the CDFI Fund consider introducing reverse mortgages as a new Qualified Activity type or consider revising the definition of Affordable Housing Loan to include reverse mortgages? Please explain why or why not.
b. Existing Qualified Activities
(1) Are there any loans, investments, or service activities that are currently considered BEA Program Qualified Activities for which the CDFI Fund should consider updates to the definition? If so, indicate the Qualified Activity and explain why the CDFI Fund should consider revising the definition.
(2) Are there any loans, investments, or service activities that are currently considered BEA Program Qualified Activities that the CDFI Fund should consider eliminating? If so, indicate the Qualified Activity and explain why the CDFI Fund should consider eliminating it.
(3) For Small Business Loans, which are Qualified Activities in the Commercial Loans and Investments sub-category of the Distressed Community Financing Activities category, the CDFI Fund instructs Applicants to use the size eligibility standards adopted by the U.S. Small Business Administration's Development Company or Small Business Investment Company programs (13 CFR 121.01) for determining whether a loan to a borrower is eligible to be reported as this Qualified Activity. Is there any other criteria the CDFI Fund should consider for determining whether a loan to a borrower is eligible to be reported as a Small Business Loan? If yes, please describe the criteria and explain why the CDFI Fund should consider it.
(4) The CDFI Fund currently values the administrative cost of providing certain Financial Services using the following per unit values:
$100.00 per account for Targeted Financial Services, including safe transaction accounts, youth transaction accounts, Electronic Transfer Accounts and Individual Development Accounts; $50.00 per account for checking and savings accounts that do not meet the definition of Targeted Financial Services; $5.00 per check cashing transaction; $50,000 per new ATM installed at a location in a Distressed Community; and $500,000 per new retail bank branch office opened in a Distressed Community, including school-based bank branches approved by the Applicant's Federal bank regulator.
Should the CDFI Fund consider updates to the valuation of these administrative costs? If so, indicate the Financial Service, suggested value, and explain why the CDFI Fund should consider revising the value.
2. Award Selection Process
[top] Section 1806.404 (b), (c), and (d) of the Interim Rule describes the award selection process if insufficient funds are available to cover estimated awards for which Applicants are eligible, priority of awards, and calculating
a. Award Amount
(1) Should the CDFI Fund consider awarding eligible applicants who successfully demonstrate increases in more than one BEA category a higher single BEA Program award amount than Applicants who demonstrate an increase in only one BEA category, if both are eligible for the maximum award amount? If yes, explain what should be considered in determining the proportion of the increased award amount. If no, explain why not.
(2) Should the CDFI Fund establish a minimum dollar amount and/or a maximum dollar amount that may be awarded for the CDFI Related Activities category? Explain why or why not.
(3) Should the CDFI Fund establish a maximum dollar amount that may be awarded for Distressed Community Financing Activities category? Explain why or why not.
(4) Should the CDFI Fund establish a maximum dollar amount that may be awarded for the Service Activities category? Explain why or why not.
(5) Should the CDFI Fund determine actual award amounts by a method other than the existing formulaic award calculation? If yes, please describe the method and note what benefits are offered to Applicants, residents and businesses in Distressed Communities, and/or U.S. taxpayers by implementing this method. Also, indicate if/how the method addresses the following factors noted in Section 1834a(h)(1)(C) of the BEA Statute: degree of difficulty in carrying out activities, community impact, degree of innovative methods for meeting community needs, leverage of qualified activity amounts, total asset size of the Applicant, new entrance to providing services in a Distressed Community, need for subsidy, and extent of distress in a community.
b. Award Calculation
The estimated BEA Program award calculation is the year-over-year increase in Qualified Activities from the Baseline to the Assessment Period prioritized based on CDFI certification status and CRA asset size, and multiplied by an award percentage based on the Category, Sub-category and Qualified Activity type.
(1) Is there any additional criteria that the CDFI Fund should consider in the estimated BEA Program award calculation?
3. Cap on Qualified Activity Amount
Current policy states that the value of a Qualified Activity for purposes of determining a BEA Program Award shall not exceed $10 million in the case of Commercial Real Estate Loans or any CDFI Related Activities ( i.e., the total principal amount of the transaction must be $10 million or less to be considered a Qualified Activity). However, the CDFI Fund may consider transactions with a total principal value of over $10 million on a case by case basis. In such cases, Applicants must attach a Community Benefit Statement, which is a narrative statement that describes the community benefit of transactions over $10 million for the CDFI Fund's consideration.
a. What information should the Applicant provide to aid the CDFI Fund in assessing the community benefit of transactions over $10 million?
4. Integral Involvement
The Interim Rule defines CDFI Support Activity as assistance provided by an Applicant or its Subsidiary to a Certified CDFI that meets the Integral Involvement criteria set forth by the CDFI Fund in the applicable NOFA. Commenters should note that Integral Involvement is a statutory program requirement.
The most recent BEA Program NOFA defines Integrally Involved as:
Scenario I: Having provided at least 10% of the number of its financial transactions or dollars transacted ( e.g., loans or equity investments) in one or more Distressed Communities in each of the three calendar years preceding the date of the applicable NOFA; or 10% of the number of its Development Service Activities (as defined in 12 CFR 1805.104) or value of the administrative cost of providing such services in one or more Distressed Communities in each of the three calendar years preceding the date of the applicable NOFA;
Scenario II: Transacted at least 25% of the number of its financial transactions or dollars transacted ( e.g., loans or equity investments) in one or more Distressed Communities in at least one of the three calendar years preceding the date of the applicable NOFA or transacted at least 25% of the number of its Development Service Activities or value of the administrative cost of providing such services in one or more Distressed Communities in at least one of the three calendar years preceding the date of the applicable NOFA;
Scenario III: Demonstrating that it has attained at least 10% of market share for a particular product in one or more Distressed Communities in at least one of the three calendar years preceding the date of the applicable NOFA;
Scenario IV: At least 25% of the CDFI Partner's physical locations ( e.g., offices or branches) are located in one or more Distressed Communities where it provided financial transactions or Development Service Activities during the one calendar year preceding the date of the NOFA.
a. Should the current definition of Integrally Involved be revised or replaced? If yes, how should the CDFI Fund revise the Integrally Involved definition or what should the CDFI Fund replace the term with?
b. Are there any other factors the CDFI Fund should consider when determining an updated definition of Integrally Involved? If yes, what are they?
Authority: 12 U.S.C. 1834a, 4703, 4713, 4717; 12 CFR part 1806.
Jodie L. Harris,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2022-20732 Filed 9-26-22; 8:45 am]
BILLING CODE 4810-70-P