Community Development Revolving Loan Fund Program for Credit Unions

Congress created NCUA?s CDRLF program to stimulate economic development in low income communities served by credit unions.

Credit unions play a significant role in providing needed financial services to low-wealth, underserved consumers.

Through the CDRLF, credit unions have access
to reduced-rate loans and technical assistance grants.

Low-income credit unions use these funds to develop relevant products and services for low-wealth individuals.

This support results in improved access to financial services, an opportunity for increased member savings, and improved employment opportunities in low-income communities.



NCUA?s Office of Small Credit Union Initiatives administers and manages the
Community Development Revolving Loan Fund.

NCUA does not use funds for the administration of the CDRLF.

All administrative costs associated with the program are borne by the agency?s Operating Fund.

NCUA?s Office of Small Credit Union Initiatives serves as the administrator of the CDRLF.

The overall objectives for the CDRLF, including its operating principles, are outlined in Part 705 of NCUA?s Rules and Regulations.

To summarize, the objective of the fund is to support low-income designated credit unions in their efforts to: 1) Provide basic financial and related services to its members and their communities; 2) Enhance their capacity to better serve their members and the communities in which they operate; and 3) Respond to emergencies.
Related Programs

Examples of Funded Projects

Fiscal Year 2016: Capacity & Growth The Capacity and Growth initiative helped credit unions establish new financial service relationships with their members.

Grant funds were used to improve outreach efforts through the implementation of new deposit and lending products, enhance digital service channels, and explore other strategies for growth.

Cybersecurity The cybersecurity initiative strengthened credit union technology systems against potential threats and vulnerabilities to confidential member information.

Credit unions were able to enhance their security posture by investing in data encryption technology, biometric and multi-factor authentication systems and risk assessments for their IT systems.

Staff and Volunteer Training As the credit union system evolves, credit unions must be diligent in obtaining the required training for management, staff, and volunteers.

This initiative provided funds for low-income credit unions to offset the cost of training relevant to improving credit union operations and staff performance.

Credit unions used grant funds to attend credit union management schools, attend credit union course trainings, purchase online training libraries, and participate in webinars.

NCUA encouraged credit unions to attend training for compliance, lending and collections and financial counseling for front-line staff. Student Internships Student internship grant funds allowed credit unions to introduce students to the credit union system.

Interns gained meaningful hands-on experience by assisting small credit unions in areas where, many times, there was a gap in staff expertise.

Interns assisted credit unions in developing new marketing strategies including social media and web development, as well as providing insight to the younger demographics? product and service needs.

Through this initiative, students are better equipped to transition into a career in the financial services industry.

Fiscal Year 2017: Each credit union may apply for funding under one of three initiatives: ? Leadership development (maximum grant $10,000)?Credit unions may use this grant to promote career development, management succession planning, diversity and inclusion training, or structuring essential employment positions. ? Digital services and security (maximum grant $7,500)?Credit unions can improve digital member services as well as cybersecurity and fraud prevention under this initiative.

This grant can be used to offer services like remote deposit capture, digital payments and wallets, or mobile loan applications or to provide cybersecurity training or digital encryption. ? Small, low-income credit union capacity (maximum grant $7,500)?Credit unions with assets of less than $30 million may apply for funding under this initiative to address operational challenges such as upgrading technology systems for greater efficiency and improved operations.

Applicants must fall under the $30 million asset limit. In addition to those initiatives, each credit union may apply for a grant of up to $25,000 to support projects designed to reach people living in underserved communities.

Fiscal Year 2018: Not available.


Agency - National Credit Union Administration

Office - None.

Central Office - OSCUIAPPS@NCUA.GOV.
Website Address

http://www.ncua.gov




Selected Recipients for this Program


RecipientAmount Start DateEnd Date
Mountain Star Federal Credit Union $ 15,000   2016-07-212017-03-31
Texas Tech Federal Credit Union $ 15,000   2016-07-212017-03-31
Jemez Valley Credit Union $ 15,000   2016-07-212017-03-31
Integris Federal Credit Union $ 15,000   2016-07-212017-03-31
Indiana Heartland Federal Credit Union, Inc $ 0   2016-07-212017-03-31
Oregon Community Credit Union $ 15,000   2016-07-212017-03-31
Nw Priority Credit Union $ 15,000   2016-07-212017-03-31
Center City Credit Union $ 15,000   2016-07-212017-03-31
City Co Federal Credit Union $ 15,000   2016-07-212017-03-31
Fivepoint Credit Union $ 15,000   2016-07-212017-03-31



Program Accomplishments

Fiscal Year 2016: For the 2016, Grant Round, received 1,430 applications totaling $9.6 million. Grants awarded total to approximately 2.5 million will help 309 low-income credit unions expand services to underserved communities, train staff, improve cybersecurity and provide students with work experience. Funding Information: 309 CREDIT UNIONS RECEIVED $2,499,187 IN GRANT AWARDS. THE 309 OSCUI PROGRAM AWARD RECIPIENTS ARE LOCATED IN 41 STATES, THE DISTRICT OF COLUMBIA, PUERTO RICO, AND THE VIRGIN ISLANDS. 50 ARE MINORITY DEPOSITORY INSTITUTIONS. In the most recent round, NCUA awarded grants in four initiative areas: ? Capacity and growth: NCUA awarded 116 grants, totaling $1,495,163, to credit unions expanding financial access to underserved communities through digital products, lending programs and other growth strategies. ? Cybersecurity: NCUA awarded 112 grants, totaling $752,529, to help credit unions better protect member information and other sensitive data. ? Student internships: NCUA awarded 33 grants, totaling $125,795, for credit unions to provide students with professional work experiences. ? Staff training: NCUA awarded 48 grants, totaling $125,700, for credit unions to train staff in areas like lending, collections and governance. Fiscal Year 2017: $2 Million Projected for the 2017 Grant Round opening on July 1, 2017. Each credit union may apply for funding under one of three initiatives: ? Leadership development (maximum grant $10,000)?Credit unions may use this grant to promote career development, management succession planning, diversity and inclusion training, or structuring essential employment positions. ? Digital services and security (maximum grant $7,500)?Credit unions can improve digital member services as well as cybersecurity and fraud prevention under this initiative. This grant can be used to offer services like remote deposit capture, digital payments and wallets, or mobile loan applications or to provide cybersecurity training or digital encryption. ? Small, low-income credit union capacity (maximum grant $7,500)?Credit unions with assets of less than $30 million may apply for funding under this initiative to address operational challenges such as upgrading technology systems for greater efficiency and improved operations. Applicants must fall under the $30 million asset limit. In addition to those initiatives, each credit union may apply for a grant of up to $25,000 to support projects designed to reach people living in underserved communities. Fiscal Year 2018: Amount unavailable.

Uses and Use Restrictions

In order to meet the objectives of the Community Development Revolving Loan Program for Credit Unions, an applicant must be certified as low-income credit union approved for participation must provide a variety of financial and related services designed to meet the particular needs of the low-income community served.

Federal grants and loans under the program may generally be used for services that include 1) Provide basic financial and related services to its members and their communities; 2) Enhancing their capacity to better serve their members and the communities in which they operate; 3) Responding to emergencies.

The aforementioned are subject to initiatives offered for funding each year.

The funds must be utilized in compliance with the particular project approved for funding and program guidelines, which provide information on expenses the loans and grants may cover.

Details located at: https://www.ncua.gov/services/Pages/small-credit-union-initiatives/grants-loans/grants.aspx.

Current Program for Loans (2017)- Credit unions are eligible to apply for a 5-year balloon note, with a 0.6% interest rate.

Payments are due semi-annually.

There is no penalty for early repayment. Grants: Based on initiatives.

Published on NCUA Website and NOFO published in the Federal Register.

Eligibility Requirements

Applicant Eligibility

All State and federally chartered credit unions with a low-income designation are eligible.

Congress established the fund to provide grants and loans to credit unions serving low-income communities.

For details regarding the low-income designation, see 12 CFR 701.34.

Beneficiary Eligibility

A credit union wishing to participate must serve a field of membership which is comprised primarily of low-income individuals. To participate in the CDRLF Program, a federally chartered credit union must be currently designated as a ?low-income? credit union as set forth in NCUA?s Rules and Regulations. A state-chartered credit union must have the equivalent low-income designation from its respective state supervisory authority and concurrence from NCUA. 12 CFR 701.34 A low-income designated credit union is one in which more than half of its members meet the NCUA definition for a ?low-income member.? Low-income members are those who earn 80 percent or less than the median family income for the metropolitan area where they live, or the national metropolitan area, whichever is greater. Low-income designated credit unions have offices and serve members throughout the United States, Puerto Rico, Guam, and the U.S. Virgin Islands, and on military bases around the world. Depending on the charter type, these credit unions serve occupational groups, associations and communities.

Credentials/Documentation

Evidence of Chartering from the National Credit Union Administration Evidence of Low Income Designation (12 CFR 701.34) Applicants must obtain a Data Universal Number System (DUNS) number and be registered in the System for Award Management (SAM) before an Application is considered complete. Additionally, Applications must include a valid and current Employer Identification Number (EIN) issued by the U.S. Internal Revenue Service (IRS). If an Applicant does not fully comply with these requirements, NCUA may deem the Application incomplete and disqualify the Applicant. Other submission requirements include disclosure agreements and mandatory clauses which are specified in the grant guidelines and web-based application system. DUNS Number - Applicants can obtain a DUNS number by visiting the Dun & Bradstreet (D&B) website or calling 1-866-705-5711 to register or search for a DUNS number. Registering for a DUNS number is FREE. Active SAM Registration - Applicants can register by visiting the SAM website. An active SAM account status and CAGE number is required to apply for the OSCUI Grant Program. The SAM registration process is FREE. DUNS Number. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is not applicable.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. Only the Subpart F 'Audit Requirements' under 2 CFR 200, Uniform Administrative Requirements applies. While the loans under this program is limited to a maximum of $500,000 and the grants to a maximum of $25,000; these amounts can be considered when calculating the total of all Federal awards received. For this program alone, audit requirement does not apply due to the amounts involved. Grants - Are reimbursable grants. Allowed projects and expenses are published in the grant guideline. The Application related documents can be found on NCUA?s website at https://www.ncua.gov/services/Pages/small-credit-union-initiatives/grants-loans/grants.aspx. Grants are reimbursable grants -Once approved, awardees incur expenses by completing the approved projects/implementing the approved products/services. The awardee then submit a reimbursement request electronically with the required documentations by the specified deadline.

Award Procedures

Grant Award Procedure: 1) Low-Income Designated Credit Unions Apply Online during the open period 2) Agency (NCUA) Review of Applications 3) Agency (NCUA) Notifies Credit Union of Approval or Denial/Announces Awards 4) Awarded Credit Union Incurs Expense for Approved Project (s) 5) Credit Union Requests Reimbursement Online with supporting documents 6) Agency (NCUA) Reimbursement Review,Approve and Payment via Electronic Funds Transfer Loan Award Procedure: 1) Low-Income Designated Credit Unions Apply Online 2) Agency (NCUA) Review of Applications 3) Agency (NCUA) Notifies Credit Union of Approval or Denial 4) Credit Union and NCUA Sign Loan Documents (if approval) 5) Loan Amount disbursed to Credit Union via Electronic Funds Transfer (if approval) 6) Loan recipient credit union make bi annual interest payment via pay.gov and principal payment at the 5th year. 7) Annual reporting There is no repayment penalty. Loan can be paid off at any time during the five years.

Deadlines

Contact the headquarters or regional office, as appropriate, for application deadlines.

Authorization

Omnibus Budget Reconciliation Act of 1981, as amended, Sections 623,633, and 681. 42 U.S.C 9812,9822 and 9910, Public Law 115-244, Stat. 494,498,518, 42 U.S.C 9812, 9822,9910.

Range of Approval/Disapproval Time

From 60 to 90 days. From 30 to 90 days.

Appeals

From 90 to 120 days. Any applicant whose qualification is denied may appeal that decision to the NCUA Board. Refer to NCUA Rules and Regulations 12 CFR 705.10.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

Statutory Formula: Title 12, Chapter VII, Part 705. Matching Requirements: NCUA may require (in some rare cases) credit unions to match the loan. If necessary, the credit union will be notified as part of the approval process. This program does not have MOE requirements.

Length and Time Phasing of Assistance

Grant Program Credit unions approved for funding must utilize the funds and submit a reimbursement request by the commitment expiration date provided at the time of approval (approval letter). Extension may be granted upon written request up to 12 months from the original date of expiration. Loan Program Financial assistance made available in this program will be in the form of a loan which is to be deposited in the credit union as either a non-member deposit or as a note payable and must be repaid to the Revolving Loan Program at a rate ( Current rate 2016/2017 is at .60%) The term of the loans will not exceed 5 years from the date of award of the loan. Funds will be released directly to the credit union by NCUA, Community Development Revolving Loan Program for Credit Unions. Method of awarding/releasing assistance: lump sum.

Post Assistance Requirements

Reports

Grant Program Credit unions are required to provide a summary of outcome and proof of purchase and payment for the project implemented to receive reimbursement. Loan Program Loan recipients must submit an application along with other financial, business or program reports as required by NCUA and an annual report when requested by NCUA summarizing the activities and accomplishments of the project in relation to the approved goals and objectives. Credit unions are encouraged to notify its membership annually the activities it is undertaking to serve the underserved community.

No cash reports are required.

Grant Program Credit unions are required to provide a summary of outcome and proof of purchase and payment for the project implemented to receive reimbursement. Loan Program Loan recipients must submit an application along with other financial, business or program reports as required by NCUA and an annual report when requested by NCUA summarizing the activities and accomplishments of the project in relation to the approved goals and objectives.

Grant Program Credit unions are required to provide a summary of outcome and proof of purchase and payment for the project implemented to receive reimbursement.3. Reporting and Reimbursement Requirements: Successful Applicants must submit a reimbursement request in order to receive the awarded funds.

The reimbursement requirements are specific to each initiative.

In general, the reimbursement request will require evidence of expenses, project related documentation, a summary of project accomplishments and outcomes, and a certification form signed by a credit union official (e.g.

CEO, manager, or Board Chairperson) authorized to request the reimbursement and make the certifications.

NCUA, in its sole discretion, may modify these requirements.

Successful Applicants are required to submit the reimbursement request within the expiration date specified in the approval letter.

Additional document requirements are published via the Grant Guideline for each year.

Loan Program Loan recipients must submit an application alon with other financial , business or program reports as required by NCUA and an annual report when requested by NCUA summarizing the activities and accomplishments of the project in relation to the approved goals and objectives.

Grants - As these are reimbursable grants, no performance monitoring required.

Loan recipients must submit an application along with other financial , business or program reports as required by NCUA and an annual report when requested by NCUA summarizing the activities and accomplishments of the project in relation to the approved goals and objectives.

Audits

In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. Maximum amount of the CDRLF Loan is $500,000. The recipient credit union must submit to NCUA when requested the Supervisory Committee's audit report and the annual State or Federal examiner's report.

Records

Loan and grant recipients are required to keep all financial, business and program reports necessary for program review and audit to ensure that funds have been expended in accordance with the applicable regulations, guidelines, loan agreement and terms and conditions.

Financial Information

Account Identification

25-4472-0-3-451 - Community Development Revolving Loans Fund.

Obigations

(Direct Loans) FY 16 $1,375,000; FY 17 est $2,000,000; and FY 18 est $2,000,000 - This portion reflects the loans issued as part of the CDRLF Program. Loan amounts range from $10,000 to $500,000. There are no new congressional appropriations awarded to this revolving loan fund since 2005. This is a revolving fund (X fund). (Project Grants (Special)) FY 16 $2,499,187; FY 17 est $2,000,000; and FY 18 Estimate Not Available(Exp: Awating 2018 COngressional Budge)

Range and Average of Financial Assistance

From $2000.00 to $25,000 for Grants and From $10,000 to $500,000 for Loans.

Regulations, Guidelines, and Literature

NCUA CDRLF Program, Federal Register, 2 CFR 200, Subpart F, 12 CFR 705 and 12 CFR 701.34

Information Contacts

Regional or Local Office

None. Central Office - OSCUIAPPS@NCUA.GOV.

Headquarters Office

Geetha Valiyil 1775 Duke Street, Alexandria, Virginia 22314 Email: gvaliyil@ncua.gov Phone: 703-518-6645

Criteria for Selecting Proposals

The Community Development Revolving Loan Fund Program will use the following to base its consideration for awards on the following priorities: (1) Purpose; (2) Financial Factors and (3) Non-Financial Factors as listed in the application for funds. Details provided in the Notice of Funding Opportunity and/or published guidelines. 1. Criteria: Each grant initiative consists of unique criteria NCUA will use to evaluate Applications. The criteria is distinct from the eligibility criteria that are addressed before an Application is accepted for review. Specific details about the selection criteria are described further in the grant guidelines. 2. Review and Selection Process: i. Eligibility and Completeness Review: NCUA will review each Application to determine whether it is complete and that the Applicant meets the eligibility criteria described in the Regulations, this NOFO, and the grant guidelines. An incomplete Application or one that does not meet the eligibility criteria will be declined without further consideration. ii. 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, this NOFO, and the grant guidelines. 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. iii. Evaluation and Scoring: The evaluation criteria for each initiative will be more fully described in the grant guidelines. iv. Input from Examiners: NCUA may not approve an award to a credit union for which it?s 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 grant 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. v. Award Selection: NCUA will make its award selections based on a consistent scoring system where each Applicant will receive a ranking position. NCUA will also consider the impact of funding and rank Applications based on the factors listed in the grant guidelines.



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