Department of the Treasury - Community Development Financial Institution Fund Program Account Recovery Plan
The CDFI Program provides low-cost capital to Certified CDFI’s to support sustainability and growth and to increase the availability of credit to low-income communities and underserved populations.
The CDFI Program makes grants, loans, and other investments to certified CDFIs to support sustainability and growth by providing low cost capital to CDFI’s, increasing the availability of affordable credit and the provision of financial services to individuals in low-income communities or serving underserved populations; revitalize low-income communities through lending, investing, enhancing liquidity, or other means of finance to develop or support: (1) commercial facilities that promote revitalization, community stability, and job creation or retention; (2) businesses that provide jobs for, or are owed by, low-income persons; (3) affordable housing that facilitates home ownership; and (4) other community and economic development activities. The Recovery Act provides $90 million for the CDFI Program. These resources will enable the CDFI Fund to increase its grant awards to $2 million, and to increase the number of high quality CDFIs that receive awards by at least 30 percent more than 2008.
CDFIs will use awards to expand the offering of financial products, such as loans or investments in small businesses or affordable housing projects, and basic banking services to underserved communities, and financial literacy training. CDFIs that are banks and credit unions may also use funds to subsidize the provision of basic financial services, such as providing low-fee depository accounts and checking accounts; Individual Development Accounts (IDAs); check-cashing services; remittances; etc.
CDFIs generally have a great deal of flexibility with respect to how they use the funds. Unlike many other Federal programs, these funds are not tied to specific projects or transactions. CDFIs will often use these funds in a manner that enables them to increase their net assets so that they may borrow additional private capital and significantly increase their lending capacity. Or alternatively, CDFIs may use the dollars to significantly subsidize more costly operations, allowing them to offer more affordable loan products to borrowers that have been turned away from mainstream financial institutions; to sponsor financial and homebuyer counseling and education initiatives; to offer low-cost savings accounts to unbanked persons; etc.
There are certain programmatic restrictions that are outlined in the CDFI Program regulations, as well as awardee-specific restrictions included in each awardee’s Award Agreement with the CDFI Fund. For example:
1. CDFI Program awardees must demonstrate that they have provided at least 85% of the amount awarded to them as loans or investments within three years of receiving the award dollars;
2. CDFIs must ensure that at least 60% of their activities are directed to low-income communities or undeserved populations;
3. CDFI Program awardees are required to exceed certain capital, liquidity and loan performance thresholds.
The measures have been revised to enrich the performance metrics for Recovery targets. In some instances, targets will not be available until additional baseline data has been collected.
Number of days between the effective application due date and the date of award notification.
|Frequency : Quarterly|
|Direction : Decreasing|
|Type : Efficiency|
|Explanation : The CDFI Fund is seeking to make Recovery Act awards within 120 days of enactment of the Recovery Act. This is an improvement of 180 days (or 60 percent) over the equivalent period of performance under the FY 2008 CDFI Program round, which was 300 days. Data supporting this measure will be available through the CDFI Fund's internal award tracking systems, and will be reported on a quarterly basis on the CDFI Fund's Recovery Act website. |
|Unit : Days|
Number of days between the date of award notification and the date by which at least 85% of award dollars have been disbursed.
|Frequency : Quarterly|
|Direction : Decreasing|
|Type : Efficiency|
|Explanation : The CDFI Fund is seeking to disburse 85% of all Recovery Act awards within 60 days of the date of award notification. This would be an improvement of 150 days (or 70 percent) over the equivalent period of performance under the FY 2008 CDFI Program round, which was 210 days. Data supporting this measure will be available through the CDFI Fund's internal disbursement tracking systems, and will be reported on a quarterly basis on the CDFI Fund's Recovery Act website. |
|Unit : Days|
Number of full-time equivalent jobs created or maintained by businesses financed by CDFI Program awardees that receive Recovery Act funds.
|Frequency : Annual|
|Direction : Increasing|
|Type : Outcome|
|Explanation : The CDFI Fund anticipates that CDFI Program Recovery Act awardees will be able to create or maintain approximately 76,000 full time jobs through the provision of loans and investments to businesses, including real estate developers. This estimate based on the method that the CDFI Program uses to track and report the impact of its investments in CDFIs' capacity to serve their target markets. CDFIs typically use award funds to increase their net assets or loan loss reserves so that they may borrow additional private capital and significantly increase their lending capacity. As a result, the job impact estimates reflect the normal bank leveraging of additional private capital to expand their lending to businesses, which in turn attracts other debt and equity financing to start or expand business operations. |
The CDFI Fund collects data from its awardees on a number of elements, including jobs created and maintained at businesses financed by the awardee. This data is currently collected on an annual basis through the CDFI Fund's Community Investment Impact System (CIIS).
With respect to Recovery Act reporting requirements, the CDFI Fund will develop guidance for its awardees on how to report Recovery-related jobs information on a quarterly basis to the CDFI Fund. It will roll this information into an annual jobs measure that will be reported on the CDFI Fund's Recovery Act website.
|Unit : Number|
Schedule and Milestones
The CDFI Fund intends to distribute the entire $90 million of Recovery Act awards to CDFIs that submitted applications under the 2009 CDFI Program application round which closed on October 29, 2008. The CDFI Fund received 169 applications, and has already rated and scored these applications. It is currently in the process of finalizing its award determinations. The CDFI Fund will make award announcements no later than June of 2009, and finalize award agreements and disburse all Recovery funds by no later than August of 2009.
An implementation plan is available on the CDFI Fund’s website at:
|Award the $90 million in Recovery Act CDFI Program grants.
|Provide award agreements and disburse awards to the CDFI Program awardees (estimated 55-60 awardees)
Projects and Activities
The CDFI Fund anticipates announcing the CDFIs that have been selected to receive the $90 million in Recovery Act-related CDFI Program grants in June of 2009.
In keeping with the three program objectives noted above, the following are examples of how CDFIs intend to use CDFI Program awards: (1) to provide loans and equity investments to small businesses and micro-enterprises; (2) mortgage loans to low-income and first-time homebuyers; pre-development and construction financing for developers of low-income housing and community facilities, including charter schools, health clinics and child care facilities; and (3) financial services such as credit counseling, homebuyer education, low-cost depository accounts, Individual Development Accounts (IDAs), and check-cashing services that bring unbanked individuals into the financial mainstream.
CDFIs have a great deal of flexibility with respect to how they use the award dollars. Unlike many other Federal programs, these funds are not tied to specific projects or transactions; instead, CDFI Program dollars build recipient capacity to serve their target markets in flexible and individualized ways. For example, CDFIs typically use award funds in a manner that enables them to increase their net assets or loan loss reserves so that they may borrow additional private capital and significantly increase their lending capacity. Alternatively, CDFIs may use the dollars to significantly subsidize more costly operations, allowing them to offer more affordable loan products to borrowers that have been turned away from mainstream financial institutions; to sponsor financial and homebuyer counseling and education initiatives; and to offer lower-cost financial services to their customers.
5.1 RISK MANAGEMENT/INTERNAL CONTROL PLAN
• For each Recovery Act program involving implementation of provisions or obligations of Recovery Act funds in FY 2009, the bureaus will perform actions 5.1.1 through 5.1.4 by April 15, 2009, with completion of 5.1.6 shortly thereafter
• Step 5.1.5 will be ongoing
• Supporting documentation will be maintained by each bureau so that it is readily accessible in the event of an audit or other needs
5.1.1 Identify and Document Program-Specific Risks
• Review pertinent existing risk assessments
• Review pertinent OMB Circular A-123/Appendix A test results, Improper Payments Information Act assessments, etc.
• Review pertinent GAO/OIG/TIGTA audit reports and related corrective action plans
5.1.2 Identify and Document Applicable Current Process Internal Controls
5.1.3 Assess Program-Specific Risks in View of Existing Controls
• Take the Risk/Impact Questionnaire to rate risks and impacts, taking into consideration the findings identified in 5.1.1 and all OMB-prescribed Recovery Act transparency and accountability objectives
• Use the “Consequence-Probability Table” (Risk/Impact Matrix) to determine the overall (combined) Risk/Impact rating
• Document assessments
5.1.4 Mitigate Risks and Impacts
• For each Program with an overall Risk/Impact rating of “High” or “Medium”:
• Identify and update existing risk mitigation plans to implement Recovery Act-related controls; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls
• Develop and execute new risk mitigation plans as needed; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls
5.1.5 Monitor Risk Mitigation Plans
• As outlined in each risk mitigation plan (per 5.1.4), each risk mitigation plan must be monitored regularly for timely and effective implementation of corrective actions and testing of controls
• Bureaus with responsibility for Recovery Act programs will leverage existing organizations and entities (e.g., A-123/Appendix A Senior Assessment Team, Senior Management Council, et al) to review, assess, and manage Recovery Act risk
• Bureaus will provide monthly progress reports on risk management to the Treasury DCFO for each program
5.1.6 Certify Completion of Risk Assessment/Development of Mitigation Plan
• Bureau Recovery Act Senior Accountable Official will sign/date a certification for each program
• Submit signed certification to Treasury DCFO
Cost and Performance Plan
The CDFI Fund aggregates the data presented by CDFIs and releases this information. Its most recent release of information was a trend report that was released in December of 2007, which is available on the CDFI Fund’s website:
This report analyzes and reports out data across the spectrum of CDFIs in a number of key areas, pertaining to both the performance of the CDFIs and the impact on the low-income communities, including:
1. CDFI Characteristics – Size and type of CDFIs; staffing levels; markets served.
2. Portfolio Data – Size and quality of outstanding loan portfolios.
3. Capital under Management – Size of capital; sources of capital; costs of capital.
4. Operating Revenue – Size and sources of operating revenue, both earned capital and contributed capital.
5. Loan and Equity investments originated.
6. Financial Strength of CDFIs – Analysis of various capital ratios and liquidity measurements.
7. Community Benefits – Jobs created and maintained; development services provided; etc.
This report is in the process of being updated with more recent data and, beginning in 2009, will be updated annually.
The CDFI Fund’s Chief Operating Officer has been designated as the CDFI Fund’s Accountable Official (AO) with respect to the Recovery Act dollars. The AO has established a working group consisting of representatives from the CDFI Fund’s CDFI Program office, the Resource Management office, the office of Legal Counsel, the Compliance office, and the Research office to ensure that all Recovery Act requirements are coordinated across the various units. To further this coordination, the CDFI Fund has posted a position announcement for a senior level staff person to serve as Recovery Act Program Manager. This person will be directly responsible for implementing all aspects of the Recovery Act program requirements.
The AO has daily conference phone calls with Treasury’s Senior Accountable Official (SAO) to monitor the program. During these conference calls and on a monthly basis, the AO and the SAO monitor and review several items including obligations and outlays, acquisitions, performance measures, and accountability metrics. Corrective and/or preventive actions that are established as a result of the reviews will be tracked for implementation.
Energy Efficiency Spending Plans
CDFI Program awards will not be used to invest in Federal infrastructure projects.
Program Plan Award Types
No Data Available