PART 1806—BANK ENTERPRISE AWARD PROGRAM Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713, 4717; 31 U.S.C. 321. Source: 81 FR 52743, Aug. 10, 2016, unless otherwise noted. Subpart A—General Provisions § 1806.100 Purpose. The purpose of the Bank Enterprise Award (BEA) Program is to provide grants to Insured Depository Institutions that provide financial and technical assistance to Community Development Financial Institutions and increase their activities in Distressed Communities. § 1806.101 Summary. Through the BEA Program, the CDFI Fund will provide monetary awards in the form of grants to Applicants selected by the CDFI Fund that increase their investments in or provide other support of CDFIs, increase their lending and investment activities in Distressed Communities, or increase their provision of certain services and assistance. Distressed Communities must meet minimum geographic, poverty, and unemployment criteria. Applicants are selected to receive BEA Program Awards through a merit-based, competitive application process. The amount of a BEA Program Award is based on the increase in Qualified Activities that are carried out by the Applicant during the Assessment Period. BEA Program Awards are disbursed by the CDFI Fund after the Recipient has successfully completed projected Qualified Activities. Each Recipient will enter into an Award Agreement, which will require it to abide by terms and conditions pertinent to any assistance received under this part, including the requirement that BEA Program Award proceeds must be used for Eligible Activities, and in accordance with the Uniform Administrative Requirements, as applicable. All BEA Program Awards are made subject to funding availability. § 1806.102 Relationship to other CDFI Fund programs. (a) Restrictions using BEA Program Award in conjunction with other awards. (2) Other programs include, but not limited to, the Capital Magnet Fund, the CDFI Program, the CDFI Bond Guarantee Program, the Native American CDFI Assistance Program, and the New Markets Tax Credit Program, are as set forth in the applicable notice of funding opportunity or Notice of Allocation Availability. (b) Prohibition against double funding. (2) An Applicant that is a CDFI may not receive a BEA Program Award, either directly or through a community partnership if it has: (i) Received a CDFI Program award within the preceding 12-month period, or has a CDFI Program application pending; or (ii) Ever received a CDFI Program award based on the same activity during the same semiannual period for which the institution seeks a BEA Program Award. § 1806.103 Definitions. For purposes of this part, the following terms shall have the following definitions: Act et seq. Affordable Housing Development Loan Affordable Housing Loan Applicant Appropriate Federal Banking Agency Assessment Period Award Agreement Bank Enterprise Award BEA Program Award Bank Enterprise Award Program BEA Program Baseline Period CDFI Partner CDFI Related Activities CDFI Support Activity Commercial Loans and Investments Commercial Real Estate Loan Community Development Financial Institution CDFI Community Development Financial Institutions Fund CDFI Fund Community Services (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; Consumer Loans Deposit Liabilities e.g., e.g., Development Service Activities Distressed Community Distressed Community Financing Activities (1) Consumer Loans; or (2) Commercial Loans and Investments; Education Loan Electronic Transfer Account ETA (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. Eligible Activities Eligible Resident Equity Investment Equity-Like Loan Financial Services Geographic Units Home Improvement Loan Indian Reservation et seq. Individual Development Account IDA Insured Depository Institution Integrally Involved i.e., Low- and Moderate-Income or Low- and Moderate-Income requirements Metropolitan Area Notice of Funding Availability NOFA Priority Factor (1) Each subcategory within the Distressed Community Financing Activities category of Qualified Activities; or (2) Each activity-type within the Service Activities and CDFI Related Activities categories of Qualified Activities. (3) A priority factor represents the CDFI Fund's assessment of the degree of difficulty, the extent of innovation, and the extent of benefits accruing to the Distressed Community for each type of activity; Project Investment Qualified Activities Recipient Service Activities Small Business Loan Small Dollar Consumer Loan State Subsidiary Targeted Financial Services Targeted Retail Savings/Investment Products Technical Assistance Unit of General Local Government § 1806.104 Uniform Administrative Requirements; waiver authority. (a) Uniform Administrative Requirements. (b) Waiver authority. Federal Register § 1806.105 OMB control number. The collections of information contained in this part have been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 and assigned the applicable, approved OMB Control Numbers associated with the CDFI Fund under 1559. Subpart B—Eligibility § 1806.200 Applicant eligibility. An entity that is an Insured Depository Institution is eligible to apply for a BEA Program Award if the CDFI Fund receives a complete BEA Program Award application by the deadline set forth in the applicable Notice of Funding Availability (NOFA). Additional eligibility requirements are set forth in the applicable NOFA. Subpart C—Use of Funds/Eligible Activities § 1806.300 Eligible Activities. Recipients of BEA Program Awards must use their payments for the following Eligible Activities: (a) CDFI Related Activities; (b) Distressed Community Financing Activities; and (c) Service Activities, and to comply with the Uniform Administrative Requirements as further described in the applicable NOFA and the Award Agreement. § 1806.301 Restrictions of use of award. A Recipient may not distribute BEA Program Award funds to an Affiliate without the CDFI Fund's prior written consent. Subpart D—Award Determinations § 1806.400 General. The amount of a BEA Program Award shall be based on the Applicant's increases in Qualified Activities from the Baseline Period to the Assessment Period, as set forth in the applicable NOFA. When determining this increase, Applicants must consider all BEA Qualified Activities and all BEA qualified census tracts, as it relates to a given subcategory or activity type, as applicable. § 1806.401 Community eligibility and designation. (a) General. (b) Minimum area and eligibility requirements. (1) Minimum area requirements. (i) Must be an area that is located within the jurisdiction of one (1) Unit of General Local Government; (ii) The boundaries of the area must be contiguous; and (iii) The area must: (A) Have a population, as determined by the most recent U.S. Bureau of the Census data available, of not less than 4,000 if any portion of the area is located within a Metropolitan Area with a population of 50,000 or greater; or (B) Have a population, as determined by the most recent U.S. Bureau of the Census data available, of not less than 1,000 in any other case; or (C) Be located entirely within an Indian Reservation. (2) Eligibility requirements. (i) At least 30 percent of the Eligible Residents have incomes that are less than the national poverty level, as published by the U.S. Bureau of the Census or in other sources as set forth in guidance issued by the CDFI Fund; (ii) The unemployment rate is at least 1.5 times greater than the national average, as determined by the U.S. Bureau of Labor Statistics' most recently published data, including estimates of unemployment developed using the U.S. Bureau of Labor Statistics' Census-Share calculation method, or in other sources as set forth in guidance issued by the CDFI Fund; and (iii) Such additional requirements as may be specified by the CDFI Fund in the applicable NOFA. (c) Area designation. (1) Selecting Geographic Units which individually meet the minimum area and eligibility requirements set forth in paragraph (b) of this section; or (2) Selecting two or more Geographic Units which, in the aggregate, meet the minimum area and eligibility requirements set forth in paragraph (b) of this section, provided that no Geographic Unit selected by the Applicant within the area has a poverty rate of less than 20 percent. (d) Designation. § 1806.402 Measuring and reporting Qualified Activities. (a) General. (b) Reporting Qualified Activities. (1) If an Applicant elects to apply for an award in the CDFI Related Activities category, it may elect to report on one or both types of activities within the CDFI Related Activities category. (2) If an Applicant elects to apply for an award in the Distressed Community Financing Activities category, the Applicant must report on the following subcategories: (i) Aggregate Consumer Loans; or (ii) Aggregate Commercial Loans and Investments; or (iii) Both paragraphs (b)(2)(i) and (ii) separately; unless the Applicant provides a reasonable explanation, acceptable to the CDFI Fund, in its sole discretion, as to why the Applicant cannot report on aggregated activities in such subcategories. (3) If an Applicant elects to apply for an award in the Service Activities category, it may elect to report on one or more types of activities within the Service Activities category. (c) Area served. (1) Undertaken in the Distressed Community; or (2) Provided to Eligible Residents or enterprises that are Integrally Involved in the Distressed Community. (d) Certain limitations on Qualified Activities. (e) Measuring the value of Qualified Activities. (1) Equity Investments, Equity-Like Loans, loans, grants and certificates of deposits, at the original amount of such Equity Investments, Equity-Like Loans, loans, grants or certificates of deposits. Where a certificate of deposit matures and is then rolled over during the Baseline Period or the Assessment Period, as applicable, the CDFI Fund will assess the value of the full amount of the rolled-over deposit. Where an existing loan is refinanced (meaning, a new loan is originated to pay off an existing loan, whether or not there is a change in the applicable loan terms), the CDFI Fund will only assess the value of any increase in the principal amount of the refinanced loan; (2) Project Investments at the original amount of the purchase of stock, limited partnership interest, other ownership interest, or grant; (3) Deposit Liabilities at the dollar amount deposited as measured by comparing the net change in the amount of applicable funds on deposit at the Applicant during the Baseline Period with the net change in the amount of applicable funds on deposit at the Applicant during the Assessment Period, as described in paragraphs (e)(3)(i) and (ii) of this section: (i) The Applicant shall calculate the net change in deposits during the Baseline Period by comparing the amount of applicable funds on deposit at the close of business the day before the beginning of the Baseline Period and at the close of business on the last day of the Baseline Period; and (ii) The Applicant shall calculate the net change in such deposits during the Assessment Period by comparing the amount of applicable funds on deposit at the close of business the day before the beginning of the Assessment Period and at the close of business on the last day of the Assessment Period; (4) Financial Services and Targeted Financial Services based on the predetermined amounts as set forth by the CDFI Fund in the applicable NOFA; and (5) Financial Services (other than those for which the CDFI Fund has established a predetermined value), Community Services, and CDFI Support Activities consisting of Technical Assistance based on the administrative costs of providing such services. (f) Closed transactions. (1) Is executed on a date within the applicable Baseline Period or Assessment Period, respectively; and (2) Constitutes a legally binding agreement between the Applicant and a borrower or investee, which agreement specifies the final terms and conditions of the transaction, except that any contingencies included in the final agreement must be typical of such transaction and acceptable (both in the judgment of the CDFI Fund); and (3) An initial cash disbursement of loan or investment proceeds has occurred in a manner that is consistent with customary business practices and is reasonable given the nature of the transaction (as determined by the CDFI Fund), unless it is normal business practice to make no initial disbursement at closing and the Applicant demonstrates that the borrower has access to the proceeds, subject to reasonable conditions as may be determined by the CDFI Fund. (g) Reporting period. § 1806.403 Estimated award amounts. (a) General. (b) Award percentages. (c) Calculating the estimated award amount for Qualified Activities. i.e., (2) The estimated award amount for the Distressed Community Financing Activities category will be equal to the applicable award percentage of the weighted value of each subcategory of Distressed Community Financing Activities ( i.e., (i) Subtracting the Baseline Period value of such subcategory from the Assessment Period value of such subcategory to yield a difference; and (ii) Multiplying the difference by the applicable Priority Factor (as set forth in the applicable NOFA). (3) The estimated award amount for the Service Activities category will be equal to the applicable award percentage of the weighted value of each activity type between the Baseline Period and Assessment Period. The weighted value of the applicable activity type shall be calculated by: (i) Subtracting the Baseline Period value of such Qualified Activity from the Assessment Period value of such Qualified Activity to yield a difference; and (ii) Multiplying the difference by the applicable Priority Factor (as set forth in the applicable NOFA). (d) Estimated award eligibility review. § 1806.404 Selection process; actual award amounts. (a) Sufficient funds available to cover estimated awards. (b) Insufficient funds available to cover estimated awards. (c) Priority of awards. e.g., (1) First priority. (2) Second priority. (3) Third priority. (d) Calculating actual award amounts. (e) Unobligated or deobligated funds. (1) To select Applicants not previously selected, using the calculation and selection process contained in this part; (2) To make additional monies available for a subsequent funding round; or (3) As otherwise authorized by the Act. (f) Limitation. § 1806.405 Applications for BEA Program Awards. (a) Notice of funding availability; applications. (b) Application contents. (1) A completed electronic application module that reports the increases in Qualified Activities actually carried out during the Assessment Period as compared to those carried out during the Baseline Period. If an Applicant has merged with another institution during the Assessment Period, it must determine the Baseline Period amounts and Assessment Period amounts of the Qualified Activities of the merged institutions, and report the increase; (2) An electronic application module which includes transactions to be considered for award calculation purposes. The transactions will include Qualified Activities that were closed during the Assessment Period. Applicants shall describe the original amount, census tract served (if applicable), dates of execution, initial disbursement, and final disbursement of the instrument for each transaction; (3) Documentation of Qualified Activities that meets the required thresholds and conditions described in § 1806.402(f) and the applicable NOFA; (4) Information necessary for the CDFI Fund to complete its environmental review requirements pursuant to part 1815 of this chapter; (5) Certifications, as described in the applicable NOFA and BEA Program Award application, that the information provided to the CDFI Fund is true and accurate and that the Applicant will comply with all relevant provisions of this chapter and all applicable Federal, State, and local laws, ordinances, regulations, policies, guidelines, and requirements; (6) In the case of an Applicant that engaged in Service Activities, or Distressed Community Financing Activities, the Applicant must confirm, by submitting documentation as described in the applicable NOFA and BEA Program application, the Service Activities or Distressed Community Financing Activities were provided to: (i) Eligible Residents; or (ii) A business located in a Distressed Community. (7) Information that indicates that each CDFI to which an Applicant has provided CDFI Support Activities is Integrally Involved in a Distressed Community, as described in the applicable NOFA and BEA Program application; and (8) Any other information requested by the CDFI Fund, or specified by the CDFI Fund in the applicable NOFA or the BEA Program application, in order to document or otherwise assess the validity of information provided by the Applicant to the CDFI Fund. Subpart E—Terms and Conditions of Assistance § 1806.500 Award Agreement; sanctions. (a) General. (1) Must carry out its Eligible Activities in accordance with applicable law, the approved BEA Program application, and all other applicable requirements; (2) Must comply with such other terms and conditions that the CDFI Fund may establish; (3) Will not receive any BEA Program Award payment until the CDFI Fund has determined that the Recipient has fulfilled all applicable requirements; (4) Must comply with performance goals that have been established by the CDFI Fund. Such performance goals will include measures that require the Recipient to use its BEA Program Award funds for Eligible Activities; and (5) Must comply with all data collection and reporting requirements. Each Recipient must submit to the CDFI Fund such information and documentation that will permit the CDFI Fund to review the Recipient's progress in satisfying the terms and conditions of its Award Agreement, including: (i) Annual report. (ii) Financial statement. (b) Sanctions. (c) Compliance with other CDFI Fund awards. (d) Notice. § 1806.501 Compliance with government requirements. In carrying out its responsibilities pursuant to an Award Agreement, the Recipient must comply with all applicable Federal, State, and local laws, regulations (including but not limited to the Uniform Administrative Requirements, ordinances, and Executive Orders). § 1806.502 Fraud, waste, and abuse. Any person who becomes aware of the existence or apparent existence of fraud, waste, or abuse of assistance provided under this part should report such incidences to the Office of Inspector General of the U.S. Department of the Treasury. § 1806.503 Books of account, records, and government access. (a) A Recipient shall submit such financial and activity reports, records, statements, and documents at such times, in such forms, and accompanied by such supporting data, as required by the CDFI Fund and the U.S. Department of the Treasury to ensure compliance with the requirements of this part. The United States Government, including the U.S. Department of the Treasury, the Comptroller General, and its duly authorized representatives, shall have full and free access to the Recipient's offices and facilities, and all books, documents, records, and financial statements relevant to the award of the Federal funds and may copy such documents as they deem appropriate. (b) The Award Agreement provides that the provisions of the Act, this part, and the Award Agreement are enforceable under 12 U.S.C. 1818 of the Federal Deposit Insurance Act by the Appropriate Federal Banking Agency, as applicable, and that any violation of such provisions shall be treated as a violation of the Federal Deposit Insurance Act. Nothing in this paragraph (b) precludes the CDFI Fund from directly enforcing the Award Agreement as provided for under the terms of the Act. (c) The CDFI Fund will notify the Appropriate Federal Banking Agency before imposing any sanctions on a Recipient that is examined by or subject to the reporting requirements of that agency. The CDFI Fund will not impose a sanction described in § 1806.500(b) if the Appropriate Federal Banking Agency, in writing, not later than 30 calendar days after receiving notice from the CDFI Fund: (1) Objects to the proposed sanction; (2) Determines that the sanction would: (i) Have a material adverse effect on the safety and soundness of the Recipient; or (ii) Impede or interfere with an enforcement action against that Recipient by the Appropriate Federal Banking Agency; (3) Proposes a comparable alternative action; and (4) Specifically explains: (i) The basis for the determination under paragraph (c)(2) of this section and, if appropriate, provides documentation to support the determination; and (ii) How the alternative action suggested pursuant to paragraph (c)(3) of this section would be as effective as the sanction proposed by the CDFI Fund in securing compliance and deterring future noncompliance. (d) Prior to imposing any sanctions pursuant to this section or an Award Agreement, the CDFI Fund shall, to the maximum extent practicable, provide the Recipient with written notice of the proposed sanction and an opportunity to comment. Nothing in this section, however, shall provide a Recipient to any formal or informal hearing or comparable proceeding not otherwise required by law. § 1806.504 Retention of records. A Recipient must comply with all record retention requirements as set forth in the Uniform Administrative Requirements.