SUMMARY: The Department of the Treasury is issuing an interim rule implementing the Bank Enterprise Award (BEA) Program administered by the Community Development Financial Institutions Fund (Fund). The mission of the CDFI Fund is to increase the capacity of financial institutions to provide capital, credit and financial services in underserved markets. Its long-term vision is an America in which all people have access to affordable credit, capital and financial services. The purpose of the BEA Program is to provide an incentive to insured depository institutions to increase their activities in the form of loans, investments, services, and technical assistance, within Distressed Communities and provide financial assistance to Community Development Financial Institutions (CDFIs) through grants, stock purchases, loans, deposits, and other forms of financial and technical assistance. This interim rule: amends and simplifies select application requirements, and adds the requirement that BEA award funds be used for BEA Qualified Activities.

DATES: Interim rule effective January 30, 2009; comments must be received on or before March 2, 2009.

ADDRESSES: You may send hard copy comments concerning this interim rule to the Depository Institutions Program Advisor, Community Development Financial Institutions Fund, Department of the Treasury, 601 13th Street, NW., Suite 200 South, Washington, DC 20005. You may also send us comments by e-mail to cdfihelp@cdfi.treas.gov, with the subject heading "BEA Program Comments". When sending comments by e-mail, please use an ASCII file format and provide your full name and mailing address. Comments may be inspected at the above address weekdays between 9:30 a.m. and 4:30 p.m. Other information regarding the Fund and its programs may be obtained through the Fund's Web site at http://www.cdfifund.gov.

FOR FURTHER INFORMATION CONTACT: Jodie Harris, Depository Institutions Program Advisor, Community Development Financial Institutions Fund, at (202) 622-4499. (This is not a toll free number.)

SUPPLEMENTARY INFORMATION: Through the Bank Enterprise Award (BEA) Program, the Community Development Financial Institutions Fund (the Fund) seeks to: strengthen and expand the financial and organizational capacity of CDFIs; provide financial incentives to insured depository institutions to increase their lending and services in Distressed Communities; and increase the flow of private capital into Low- and Moderate-Income areas. Applicants participate in the BEA Program through a competitive process, which evaluates applications based on the value of their increases in certain Qualified Activities. BEA Program Awardees receive award proceeds only after successful completion of the specified Qualified Activities. On February 4, 2003, the Fund published in the Federal Register an interim regulation (62 FR 64439) implementing the BEA Program (the current rule).

II. Summary of Changes

Revised Definitions for Categories of Qualified Activities: The interim rule updates the definition of Affordable Housing Development Loans ( SEC 1806.103(b)); Affordable Housing Loans ( SEC 1806.103©), and Home Improvement Loans ( SEC 1806.103(ee)); Commercial Real Estate Loans ( SEC 1806.103(l)); and Small Business Loans ( SEC 1806. 103(oo)) to include the requirement that the borrower and/or entity financed be located in a Distressed Community ( SEC 1806.103(t)). Affordable Housing Development Loans are loans related to the development of residential real property that are affordable to Low- and Moderate-Income Eligible Residents. 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 a Low- and Moderate-Income individual and an Eligible Resident. Home Improvement Loans mean advances 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 the borrower is an Eligible Resident. Commercial Real Estate Loans are loans 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. Small Business Loan means an origination of a loan used for commercial or industrial activities (other than an Affordable Housing Finance 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.

Award Agreement; Sanctions: Section 1806.300(a) of the interim rule provides that a BEA Program Award recipient shall comply with performance goals that have been established by the Fund. Such performance goals will include the requirement that an Awardee use its BEA Program Award for Qualified Activities under the BEA Program.

III. Rulemaking Analysis

Executive Order (E.O.) 12866

It has been determined that this regulation is not a significant regulatory action as defined in Executive Order 12866. Therefore, a Regulatory Assessment is not required.

Regulatory Flexibility Act

Because no notice of proposed rulemaking is required for this interim rule, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

Paperwork Reduction Act

The collections of information contained in this interim rule have been previously reviewed and approved by OMB in accordance with the Paperwork Reduction Act of 1995 and assigned OMB Control Number 1559-0005. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB. This document restates the collections of information without substantive change. Comments concerning suggestions for reducing the burden of collections of information should be directed to the Deputy Director for Policy and Programs, Community Development Financial Institutions Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 20005, and to the Office of Management and Budget, Attention: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503.

National Environmental Policy Act

Pursuant to Treasury Directive 75-02 (Department of the Treasury Environmental Quality Program), the Department has determined that these interim regulations are categorically excluded from the National Environmental Policy Act and do not require an environmental review.

Administrative Procedure Act

The Fund is promulgating this interim rule without opportunity for prior public comment pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 553, because the BEA Program involves grants and is thereby exempt from the procedural requirements of the APA pursuant to 5 U.S.C. 553(a)(2). The Fund also believes that an immediate effective date is necessary for the convenience of the persons affected. Specifically, an immediate effective date will minimize the risk of confusion on the affected community by ensuring that there will be a single and uniform regulation in effect during the Assessment Period for the upcoming round of the BEA Program.

Comment

Public comment is solicited on all aspects of this interim regulation. The Fund will consider all comments made on the substance of this interim regulation, but does not intend to hold hearings.

Catalog of Federal Financial Assistance Number

Bank Enterprise Award Program--21.021.

List of Subjects in 12 CFR Part 1806

Banks, banking, Community development, Grant programs--housing and community development, Reporting and recordkeeping requirements, Savings associations.

For the reasons set forth in the preamble, 12 CFR Part 1806 is revised to read as follows:

PART 1806--BANK ENTERPRISE AWARD PROGRAM

Sec.

Subpart A--General Provisions

1806.100 Purpose.

1806.101 Summary.

1806.102 Relationship to other Community Development Financial Institutions Programs.

1806.103 Definitions.

1806.104 Waiver authority.

1806.105 OMB control number.

Subpart B--Awards

1806.200 Community eligibility and designation.

1806.201 Measuring and reporting Qualified Activities.

1806.202 Estimated award amounts.

1806.203 Selection Process, actual award amounts.

1806.204 Applications for Bank Enterprise Awards.

Subpart C--Terms and Conditions of Assistance

1806.300 Award Agreement; sanctions.

1806.302 Compliance with government requirements.

1806.303 Fraud, waste and abuse.

1806.304 Books of account, records and government access.

1806.305 Retention of records.

Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713, 4717; 31 U.S.C. 321.

Subpart A--General Provisions

SEC 1806.100 Purpose.

The purpose of the Bank Enterprise Award Program is to provide financial assistance to Community Development Financial Institutions, and provide an incentive for insured depository institutions to increase their activities in Distressed Communities.

SEC 1806.101 Summary.

(a) Under the Bank Enterprise Award Program, the Fund makes awards to selected Applicants that:

(1) Increase their investments in or other support of Community Development Financial Institutions;

(2) Increase lending and investment activities within Distressed Communities; or

(3) Increase the provision of certain services and assistance.

(b) Distressed Communities must meet minimum geographic, poverty and unemployment criteria.

© Applicants are selected to participate in the program through a competitive application process. Awards are based on increases in Qualified Activities that are carried out by the Applicant during an Assessment Period. Bank Enterprise Awards are distributed after successful completion of projected Qualified Activities and must be used for BEA Qualified Activities. All awards shall be made subject to the availability of funding.

--This is a summary of a Federal Register article originally published on the page number listed below--

Interim rule with request for comment.

CFR Part: "12 CFR Part 1806"

RIN Number: "RIN 1505-AA91"

Citation: "74 FR 5790"

Federal Register Page Number: "5790"

"Rules and Regulations"

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