SUPPLEMENTARY INFORMATION:

Title: Annual Certification and Data Collection Report Form and abbreviated Transaction Level Report

OMB Control Number: 1559-0046.

Abstract: A certified Community Development Financial Institution (CDFI) is a specialized financial institution that works in markets that are underserved by traditional financial institutions. CDFIs provide a range of financial products and services in economically distressed target markets, such as mortgage financing for low-income and first-time homebuyers and not-for-profit developers, flexible underwriting and risk capital for needed community facilities, and technical assistance, commercial loans and investments to small start-up or expanding businesses in low-income areas. CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated institutions such as loan and venture capital funds.

CDFI certification is a designation conferred by the CDFI Fund and is a requirement for accessing various CDFI Fund programs. A financial institution seeking to become a Certified CDFI and qualify to apply for assistance from the CDFI Fund must complete the CDFI Certification Application (OMB Control Number 1559-0028). CDFI Certification and the Annual Certification and Data Collection Report (ACR) are requirements of Certified CDFIs. The Transaction Level Report (TLR) is a requirement of CDFIs that receive Financial Assistance (FA) awards from the CDFI Fund.

The CDFI Fund is authorized by the Riegle Community Development Banking and Financial Institutions Act of 1994 (Pub. L. 103-325, 12 U.S.C. 4701 et seq.) (the Act). The regulations governing CDFI certification are found at 12 CFR 1805.201 (the Regulations). In December 2023, the CDFI Fund released a revised version of the ACR and introduced the abbreviated TLR form which was the culmination of an effort begun in January 2017 to ensure the CDFI Certification policies and procedures continue to meet statutory and regulatory requirements, are responsive to the evolving nature of the CDFI industry, and protect government resources. Now that the CDFI Fund has reviewed close to 1,400 CDFI Certification Applications that used the revised version of the Application released in December 2023, there are some additional CDFI Certification policy changes, as well as changes to the CDFI Certification Application and its supporting tools (ACR and abbreviated TLR) that the CDFI Fund is seeking public comment on. These changes ensure CDFI Certification is aligned with the Administration's executive orders and efforts to reduce waste, fraud, and abuse within federal programs.

The proposed changes to the ACR and abbreviated TLR are to bring them in alignment with the proposed changes to the CDFI Certification Application. These changes include the elimination of any references to “Other Targeted Population—African American,” “Other Targeted Population—Hispanic,” “Other Targeted Population—Other Pacific Islander,” “Other Targeted Population—Filipino,” and “Other Targeted Population—Vietnamese” which will no longer be eligible Target Market types. The CDFI Fund will no longer allow any Other Targeted Population (OTPs) Target Market types that are based on the race and/or ethnicity of the borrower. This policy change extends to any Section Zero Application submission proposing approval of a new Target Market type.

The Abbreviated TLR will no longer include any data fields collecting information about minority status or sex of the business owner as well as climate-centered financing. Several questions are being added to the ACR to assess the Certified CDFI's and any relevant Affiliate's changes in administrative proceedings history and compliance in other federal award programs. In addition, the ACR's subsection on “BOARD AND EXECUTIVE STAFF DEMOGRAPHIC INFORMATION” will be eliminated except for two questions on the total size of governing leadership members and total size of Executive Staff. The CDFI Fund will also be eliminating the “Accountability” section and the “Native American TM Accountability Attestation” question related to board accountability from the ACR. There will no longer be a requirement of CDFI Certification connecting Target Market Accountability to board representation instead Accountability will be measured through Target Market activity. There are other minor changes to question wording or answer choices throughout the ACR and ATLR to better align the forms with the current versions in AMIS. The CDFI Fund anticipates that the overall effect of the changes to the Application will be a net reduction in burden to Certified CDFIs and CDFI Certification Applicants.

Current Actions: Revision of a currently approved collection.

Type of Review: Regular.

Form: Annual Certification and Data Collection Report.

Affected Public: Certified CDFIs.

Estimated Number of ACR Respondents: 1,277.

Frequency of ACR Responses: Annually.

Estimated Total Number of ACR Annual Responses: 1,277.

Estimated Annual Time per ACR Respondent: 20 hours.

Estimated Total ACR Annual Burden Hours: 25,540 hours.

Form: Abbreviated Transaction Level Report.

Affected Public: Non-Financial Assistance Certified CDFIs seeking Recertification (699) and new CDFI Certification Applicants (150).

Estimated Number of abbreviated TLR Respondents: 849.

Frequency of ATLR Responses: Annually.

Estimated Total Number of ATLR Annual Responses: 849.

Estimated Annual Time Per ATLR Respondent: 20 hours.

Estimated Total ATLR Annual Burden Hours: 16,980 hours. ( printed page 61932)

Request for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record at www.cdfifund.gov. The CDFI Fund is seeking input on the content of the revised CDFI Certification Application. The application and related guidance may be obtained on the CDFI Fund's website at www.cdfifund.gov/​programs-training/​certification/​cdfi/​Pages/​default.aspx.

Comments 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 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 to provide information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

In addition, the CDFI Fund requests comments in response to the following questions:

1. With the proposed change to eligible Target Market types, currently Certified CDFIs with an approved Target Market component of “Other Targeted Population—African American,” “Other Targeted Population—Hispanic,” “Other Targeted Population—Other Pacific Islander,” “Other Targeted Population—Filipino,” and/or “Other Targeted Population—Vietnamese” will no longer qualify as Target Markets for CDFI Certification and therefore, must seek approval to serve one of the remaining eligible Target Market Components. The CDFI Fund is planning on a one-year transition period for Certified CDFIs that currently rely on a now-prohibited Target Market, to qualify under one or more of the remaining eligible Target Market types. With the exception of a longer transition period, is there anything that the CDFI Fund could do to make this deadline more feasible for your organization?

2. Are there certain questions that should be added to the ACR and abbreviated TLR to ensure CDFI Certification is adequately addressing the Administration's concerns around waste, fraud, and abuse in federal programs?

3. To strengthen the financial entity portion of the ACR, the CDFI Fund is considering whether to require the submission of audited financial statements for any questions referencing the most recently completed fiscal year balance sheets. What would the estimated burden hours be for an institution to comply with this requirement?

4. Under current policy, in order to maintain CDFI Certification, Certified CDFIs need to have closed at a minimum, one (1) financial product in their proposed Target Market during their most recently completed fiscal year prior to the ACR submission date. The CDFI Fund is considering raising this threshold. What is a reasonable threshold that Certified CDFIs should meet in order to be eligible to retain CDFI Certification? Should this threshold vary by the financial institution type or other organizational defining characteristics such as years in operation, financial product offerings ( i.e., residential mortgages v. small business loans v. small dollar loans)?

5. For consumer loans only, regulated entities currently report their activity at an aggregated level by census tract. This aggregation makes it difficult for CDFI Fund staff to verify which loan transactions go to which designated Target Market type if an Applicant or Certified CDFI has multiple Target Market types applicable to different loan transactions in that census tract. To solve this problem, the CDFI Fund is considering eliminating the current Consumer Loan Report (CLR) and requiring regulated entities to report their consumer loans at an individual loan level using the abbreviated TLR or the full-length TLR. Would this policy change impose a burden on a regulated entity's ability to complete and submit their ACR and TLR in a timely manner?

6. In revising the Accountability requirement to be measured through Target Market activity rather than board representation, the CDFI Fund is evaluating whether minimum thresholds of Target Market activity should be set for entities that are approved to serve more than one Target Market type. What should be the minimum threshold per approved Target Market type for an institution to comply?

(Authority: 44 U.S.C. 3501 et seq.)

91 FR 61930