[Federal Register Volume 80, Number 2 (Monday, January 5, 2015)]
[Notices]
[Pages 260-263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30867]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
Office of Small Credit Unions (OSCUI) Loan Program Access for
Credit Unions
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notice of funding opportunity.
-----------------------------------------------------------------------
SUMMARY: The National Credit Union Administration (NCUA) is issuing a
Notice of Funding Opportunity (NOFO) to invite eligible credit unions
to submit applications for participation in the OSCUI Loan Program
(a.k.a. Community Development Revolving Loan Fund (CDRLF)), subject to
funding availability. The OSCUI Loan Program serves as a source of
financial support, in the form of loans, for credit unions serving
predominantly low-income members. It also serves as a source of funding
to help low-income designated credit unions (LICUs) respond to
emergencies arising in their communities.
Table of Contents
A. Program Description
B. Federal Award Information
C. Eligibility Information
D. Application and Submission Information
E. Application Review Information
F. Federal Award Administration
G. Federal Awarding Agency
A. Program Description
The purpose of the OSCUI Loan Program is to assist low-income
designated credit unions (LICU) in providing basic financial services
to their members to stimulate economic activities in their communities.
Through the OSCUI Loan Program, NCUA provides financial support in the
form of loans to LICUs. These funds help improve and expand the
availability of financial services to these members. The OSCUI Loan
Program also serves as a source of funding to help LICUs respond to
emergencies. The Loan Program consists of Congressional appropriations
that are administered by OSCUI, an office of the NCUA.
Permissible Uses of Funds: NCUA will consider requests for funds
consistent with the purpose of the OSCUI Loan Program. 12 CFR 705.1. A
non-exhaustive list of examples of permissible uses or projects of loan
proceeds are contained in Sec. 705.4 of the regulation, and include:
(i) Development of new products or services for members including new
or expanded share draft or credit card programs; (ii) Partnership
arrangements with community based service organizations or government
agencies; (iii) Loan programs, including, but not lmited to, micro
business loans, payday loan alternatives, education loans, and real
estate loans; (iv) Acquisition, expansion or improvement of office
space or equipment, including branch facilities, ATMs, and electronic
banking facilities; and (v) Operational programs such as security and
disaster recovery.
NCUA will consider other proposed uses of funds that in its sole
discretion it determines are consistent with the purpose of the OSCUI
Loan Program, the requirements of the regulations, and this NOFO.
Regulation: Part 705 of NCUA's regulations implements the OSCUI
Grant and Loan Program. 12 CFR 705. A revised Part 705 was published on
November 2, 2011. 76 FR 67583. Additional requirements are found at 12
CFR parts 701 and 741. Applicants should review these regulations in
addition to this NOFO. Each capitalized term in this NOFO is more fully
defined in the regulations, the loan application, and the loan
agreement. For the purposes of this NOFO, an Applicant is a Qualifying
Credit Union that submits a complete Application to NCUA under the
OSCUI Loan Program.
B. Federal Award Information
OSCUI loans are made to LICUs that meet the requirements in the
program regulation and this NOFO, subject to funds availability. OSCUI
loans are generally made at lower than market interest rates.
Congress has not made an appropriation to the OSCUI Loan Program
for Fiscal Years 2014-2015. NCUA expects to lend approximately $5.2
million under this NOFO, derived from appropriated and earned funds.
Monies for additional loans come from scheduled loan amortizations.
NCUA reserves the right to: (i) Award more or less than the amount
cited above; (ii) fund, in whole or in part, any, all, or none of the
applications submitted in response to this NOFO; and (iii) reallocate
funds from the amount that is anticipated to be available under this
NOFO to other programs, particularly if NCUA determines that the number
of awards made under this NOFO is fewer than projected.
The specific terms and conditions governing a loan will be
established in the loan documents each Participating Credit Union will
sign prior to disbursement of funds. The following are the general loan
terms under the program
1. Maximum Loan Amount: NCUA expects that most loans made under
this NOFO will be in an amount less than or equal to $300,000. NCUA has
determined that loans of this size will help maximize allocation of
this limited resource among many credit unions. However, NCUA will
consider funding requests in excess of $300,000 from Applicants that
demonstrate the need and capability to effectively deploy such funding;
and have a high probability of realizing significant impact, while
maintaining financial and operational soundness. NCUA may consider
other factors for the approval of funding requests in excess of
$300,000 and will be assessed on a case-by-case basis. See
[[Page 261]]
Section D and E of this NOFO for additional information.
2. Dates: The application open period is from January 1, 2015 thru
December 31, 2015. Funds may be exhausted prior to this deadline, at
which time the programs/funds will no longer be available.
3. Maturity: Loans will generally mature in five years. A credit
union may request a shorter loan period, but in no case will the term
exceed five years.
4. Interest: The interest rate on loans is governed by the Loan
Interest Rate Policy, which can be found on NCUA's Web site at http://www.ncua.gov/Resources/OSCUI/Pages/Loans.aspx.
5. Repayment: All loans must be repaid to NCUA regardless of how
they are accounted for by the Participating Credit Union.
(a) Principal: The entire principal is due at maturity.
(b) Interest: Interest is due in semi-annual payments beginning six
months after the initial distribution of the loan.
(c) Principal Prepayment: There is no penalty for principal
prepayment. Principal prepayments may be made as often as monthly.
6. Renewals: Not Applicable.
C. Eligibility Information
The regulations specify the requirements a credit union must meet
in order to be eligible to apply for assistance under this NOFO. See 12
CFR 705. Following are additional requirements for participating in the
Loan Program under this NOFO.
1. Eligible Applicants: A credit union must have a Low-Income
Credit Union (LICU) designation, or equivalent in the case of a
Qualifying State-chartered Credit Union, in order to participate in the
OSCUI Grant and Loan Program. Requirements for obtaining the
designation are found at 12 CFR 701.34.
2. Matching Funds: Part 705.5(g) of NCUA's regulations describe the
overall requirements for matching funds. NCUA, in its sole discretion,
may require matching funds of an Applicant, on a case-by-case basis
depending on the financial condition of the Applicant. NCUA anticipates
that most Applicants will not be required to obtain matching funds.
However, each Applicant should address in the Application its strategy
for raising matching funds if NCUA determines matching funds are
required (see 12 CFR part 705 and the Application for additional
information).
(a) Matching Funds Requirements: The specific terms and covenants
pertaining to any matching funds requirement will be provided in the
loan agreement of the Participating Credit Union. Following, are
general matching requirements. NCUA, in its sole discretion, may amend
these requirements depending upon its evaluation of the Applicant, but
in no case will the amended requirements be greater than the conditions
listed below.
(i) The amount of matching funds required must generally be in an
amount equal to the loan amount.
(ii) Matching funds must be from non-governmental member or
nonmember share deposits.
(iii) Any loan monies matched by nonmember share deposits are not
subject to the 20% limitation on nonmember deposits under Sec. 701.32
of NCUA's regulations.
(iv) Participating Credit Unions must maintain the outstanding loan
amount in the total amount of share deposits for the duration of the
loan. Once the loan is repaid, nonmember share deposits accepted to
meet the matching requirement are subject to Sec. 701.32 of NCUA's
regulations.
(b) Criteria for Requiring Matching Funds: NCUA will use the
following criteria to determine whether to require an Applicant to have
matching funds as a condition of its loan.
(i) CAMEL Composite Rating
(ii) CAMEL Management Component Rating
(iii) CAMEL Asset Quality
(iv) Regional Director Concurrence
(v) Net Worth Ratio
(c) Documentation of Matching Funds: NCUA may contact the matching
funds source to discuss the matching funds and the documentation that
the Applicant has provided. If NCUA determines that any portion of the
Applicant's matching funds is ineligible under this NOFO, NCUA, in its
sole discretion, may permit the Applicant to offer alternative matching
funds as a substitute for the ineligible matching funds. In this case:
(i) The Applicant must provide acceptable alternative matching funds
documentation within 10 business days of NCUA's request.
3. Other Eligiblity Requirements:
(a) Financial Viability: Applicants must meet the underwriting
standards established by NCUA, including those pertaining to financial
viability, as set forth in the application and found in 12 CFR
705.6(c).
(b) Compliance with Past Agreements: In evaluating funding requests
under this NOFO, NCUA will consider an Applicant's record of compliance
with past agreements, including any deobligation of funds. NCUA, in its
sole discretion, will determine whether to consider an Application from
an Applicant with a past record of noncompliance, including any
deobligation (i.e. removal of unused awards) of funds.
(i) Default Status: If an Applicant is in default of a previously
executed agreement with NCUA, NCUA will not consider an Application for
funding under this NOFO.
(ii) Undisbursed Funds: NCUA may not consider an Application if the
Applicant is a prior awardee under the OSCUI Grant Program and has
unused grant awards as of the date of Application.
D. Application and Submission Information
1. Application Form: The application and related documents can be
found on NCUA's Web site at www.ncua.gov/OSCUI/GrantsandLoans.
2. Minimum Application Content: Each Applicant must complete and
submit information regarding the applicant and requested funding. In
addition, applicants will be required to certify applications prior to
submission.
(a) DUNS Number: NCUA will not consider an Application that does
not include a valid Data Universal Numbering System (DUNS) number
issued by Dun and Bradstreet (D&B). Such an Application will be deemed
incomplete and will be declined. See Section 3 for additional
information.
(b) Employer Identification Number: Each Application must include a
valid and current Employer Identification Number (EIN) issued by the
U.S. Internal Revenue Service (IRS). NCUA will not consider an
application that does not include a valid and current EIN. Such an
Application will be deemed incomplete and will be declined. Information
on how to obtain a EIN may be found on the IRS's Web site at
www.irs.gov.
(c) Abbreviated Application: An Applicant requesting a loan amount
of $300,000 or less is permitted to complete a short online application
form that limits the amount of required narrative responses. The
required narratives will address the proposed use of funds; the credit
union's ability to obtain matching funds, if required; and how the
credit union will assess the impact of the funding.
(d) Narrative Responses: Each Application must include the
narratives listed below. Applicants must adhere to character
limitations contained in the Application. NCUA will not read or
consider narrative comments beyond the limits specified. Additionally,
NCUA will read only information requested in the Application and will
not read attachments that have not been requested in this NOFO or the
Application.
[[Page 262]]
(i) Use of Funds: A narrative describing how it intends to use the
loan proceeds. The narrative should demonstrate that the loan will
enhance the products and services the credit union provides to its
members. It also should describe how those enhanced products and
services will support the economic development of the community served
by the credit union.
(ii) Matching Funds: A narrative describing its strategy for
raising matching funds from non-federal sources if matching funds are
required.
(e) Large Loans: An Applicant requesting a loan in excess of
$300,000 is required to complete an online application form that
contains additional narrative comments supporting such request. The
additional narrative consists of a business plan.
(i) Business Plan: As detailed in Part 705 of NCUA's regulations,
the business plan must: Describe the community's need for financial
products and services and the Applicant's need for funding; summarize
the services, financial products, and services provided by the
Applicant; describe the Applicant's involvement with other entities;
describe the credit union's marketing strategy to reach members and the
community; and include financial projections.
(f) Non-federally Insured Applicants:
(i) Additional Application Requirements: Each Applicant that is a
non-federally insured, state-chartered credit union must submit
additional application materials. These additional materials are more
fully described in Sec. 705.6(b)(3) of NCUA's regulations and in the
Application.
(ii) Examination by NCUA: Non-federally insured, state-chartered
credit unions must agree to be examined by NCUA. The specific terms and
covenants pertaining to this condition will be provided in the loan
agreement of the Participating Credit Union.
3. Dun and Bradstreet Univeral Numbering System (DUNS) Number and
System for Award Management (SAM): Based on an Office of Management and
Budget (OMB) policy directive effective October 31, 2003, credit unions
are required to: (i) Be registered in SAM before submitting its
application; (ii) provided a valid Data Universal Numbering System
(DUNS) number issued by Dun and Bradstreet (D&B); and (iii) continue to
maintain an active SAM registration with current information at all
times during which it has an active Federal award or an application or
plan under consideration. NCUA will not consider an Application that
does not include a valid DUNS number. Such an Application will be
deemed incomplete and will be declined. Information on how to obtain a
DUNS number may be found on D&B's Web site at http://fedgov.dnb.com/webform or by calling D&B, toll-free, at 1-866-705-5711.
4. Submission Dates and Times: The application open period is from
January 1, 2015 thru December 31, 2015. Funds may be exhausted prior to
this deadline, at which time the programs/funds will no longer be
available.
5. Other Submission Requirements: Under this NOFO, Applications
must be submitted online at http://www.cybergrants.com/ncua.
E. Application Review Information
1. Review and Selection Process:
(a) Eligibility and Completeness Review: NCUA will review each
Application to determine whether it is complete and that the Applicant
meets the eligibility requirements described in the Regulations and in
this NOFO. An incomplete Application or one that does not meet the
eligibility requirements will be declined without further
consideration.
(b) Substantive Review: After an Applicant is determined eligible
and its Application is determined complete, NCUA will conduct a
substantive review in accordance with the criteria and procedures
described in the Regulations and this NOFO. NCUA reserves the right to
contact the Applicant during its review for the purpose of clarifying
or confirming information contained in the Application. If so
contacted, the Applicant must respond within the time specified by NCUA
or NCUA, in its sole discretion, may decline the application without
further consideration.
(c) Evaluation and Scoring: The evaluation criteria are more fully
described in Sec. 705.6 of NCUA's regulations. NCUA will evaluate each
Application that receives a substantive review on the four criteria
categories described in the regulation: Financial Performance,
Compatibility, Feasibility, and Examination Information and Concurrence
from Regional Director of Qualifying Credit Unions.
(i) Assessment of Impact: The Compatibility criteria will take into
consideration the extent of community need and projected impact of the
funding on the Applicant's members and community.
(ii) Effective Strategy: The Feasibility criteria will take into
consideration the quality of the Applicant's strategy and its capacity
to execute the strategy as demonstrated by its past performance,
partnering relationships, and other relevant factors.
(iii) Evaluating Prior Award Performance: For prior participants of
the OSCUI Grant and Loan Program, loans may not be awarded if the
participant: (1) Is noncompliant with any active award; (2) failed to
make timely loan payments to NCUA during fiscal years prior to the date
of Application; and (3) had an award deobligated (i.e. removal of
unused awarded funds) during fiscal years prior to the date of
Application.
(d) Input from Examiners: NCUA will not approve an award to a
credit union for which its NCUA regional examining office or State
Supervisory Agency (SSA), if applicable, indicates it has safety and
soundness concerns. If the NCUA regional office or SSA identifies a
safety and soundness concern, OSCUI, in conjunction with the regional
office or SSA, will assess whether the condition of the Applicant is
adequate to undertake the activities for which funding is requested,
and the obligations of the loan and its conditions. NCUA, in its sole
discretion, may defer decision on funding an Application until the
credit union's safety and soundness conditions improve.
(e) Funding Selection: NCUA will make its funding selections based
on a consistent scoring tier where each applicant will receive an
individual score. NCUA will consider the impact of the funding. In
addition, NCUA may consider the geographic diversity of the Applicants
in its funding decisions. When loan demand is high applications will be
ranked based on the aforementioned.
F. Federal Award Administration
1. Federal Award Notices: NCUA will notify each Applicant of its
funding decision. Notification will generally be by email. Applicants
that are approved for funding will also receive instructions on how to
proceed with disbursement of the loan.
2. Administrative and National Policy Requirements:
(a) Loan Agreements: Each Participating Credit Union under this
NOFO must enter into agreement with NCUA before NCUA will disburse loan
funds. The agreement documents include, for example, a promissory note,
loan agreement, and security agreement (if applicable). The Loan
Agreement will include the terms and conditions of funding, including
but not limited to the: (i) Loan amount; (ii) interest rate; (iii)
repayment requirements; (iv) accounting treatment; (v) impact measures;
and (vi) reporting requirements.
[[Page 263]]
(b) Failure to Sign Agreement: NCUA, in its sole discretion, may
rescind a loan offer if the Applicant fails to return the signed loan
documents and/or any other requested documentation, within the time
specified by NCUA.
(c) Multiple Disbursements: NCUA may determine, in its sole
discretion, to fund a loan in multiple disbursements. In such cases,
the process for disbursement will be specified by NCUA in the Loan
Agreement.
3. Reporting: Annually, each Participating Credit Union will submit
an annual report to NCUA. The report will address the Participating
Credit Union's use of the loan funds; the impact of funding; and
explanation of any failure to meet objectives for use of proceeds,
outcome, or impact. NCUA, in its sole discretion, may modify these
requirements. However, such reporting requirements will be modified
only after notice to affected credit unions.
Report Form: Applicable credit unions will be notified regarding
the submission of the report form. A Participating Credit Union is
responsible for timely and complete submission of the report. NCUA will
use such information to monitor each Participating Credit Union's
compliance with the requirements of its loan agreement and to assess
the impact of the OSCUI Loan Program.
G. Agency Contacts
1. Methods of Contact: Further information can be found at:
www.ncua.gov/OSCUI/grantsandloans. For questions email: National Credit
Union Administration, Office of Small Credit Union Initiatives at
[email protected].
2. Information Technology Support: People who have visual or
mobility impairments that prevent them from using NCUA's Web site
should call (703) 518-6610 for guidance (this is not a toll free
number).
Authority: 12 U.S.C. 1756, 1757(5)(D), and (7)(I), 1766, 1782,
1784, 1785 and 1786; 12 CFR 705.
By the National Credit Union Administration Board on December
29, 2014.
Jon Canerday,
Acting Secretary of the Board.
[FR Doc. 2014-30867 Filed 1-2-15; 8:45 am]
BILLING CODE 7535-01-P