FR 2021-03354

Summary

The document in question is a notice from the Community Development Financial Institutions (CDFI) Fund, which is inviting applications for financial assistance (FA) or technical assistance (TA) grants under the Native American CDFI Assistance (NACA) Program for the fiscal year 2021. Through this program, FA awards of up to $1 million are offered to Certified Community Development Financial Institutions (CDFIs) that serve Native American, Alaska Native, or Native Hawaiian populations. The goal of these awards is to boost their lending capabilities. Additionally, TA grants of up to $150,000 are intended to bolster the organizational infrastructure of these CDFIs. The availability of these funds depends on current funding and applicants must meet various eligibility guidelines set by the Treasury Department's CDFI Fund.

Significant Issues and Concerns

Several concerns arise from this document. First, the language used is often technical and complex, potentially rendering the information less accessible to smaller organizations or those without specialized legal or financial expertise. This complexity could be a significant barrier for organizations that would otherwise benefit from these grants but lack the resources to decipher the requirements.

There is also potential ambiguity in the subjective aspects of the award process, such as the application of "geographic diversity," which may cause stakeholders to perceive favoritism or inconsistencies in the selection process. Furthermore, the document does not clearly define what constitutes "Eligible Markets" or "Target Markets," which could create confusion regarding applicants' eligibility.

Additionally, the CDFI Fund reserves the right to reject applications based on reasons like "administrative errors" or factors that "adversely affect" the application. These are not explicitly detailed, which may lead to perceptions of inconsistency or unfair treatment among applicants.

Impact on the Public

For the broader public, particularly communities that are served by Native CDFIs, the funding opportunity could lead to increased access to financial products and services, potentially fostering economic development in Native American, Alaska Native, and Native Hawaiian areas. However, if the application process remains convoluted, deserving organizations might miss out on funding opportunities, which could ultimately limit the program's impact.

Impact on Specific Stakeholders

For CDFIs serving the targeted Native communities, this funding could significantly enhance their lending capacity and organizational development. However, the challenges surrounding the clarity and accessibility of application and eligibility criteria may pose hurdles, especially for smaller or newly emerging institutions that do not have the support infrastructure to handle complex application processes.

On the positive side, the document states that Native American CDFIs do not need to provide matching funds, potentially lowering the barrier for these institutions to access support. However, the uncertainty around what constitutes a "high compliance risk" could discourage some organizations from applying if they are unsure how they might be assessed.

Overall, the NACA Program has the potential to significantly benefit Native communities, but its impact will depend heavily on how well the application process and criteria are communicated and understood by eligible organizations.

The document outlines the availability of funds through the Native American CDFI Assistance (NACA) Program as part of the Community Development Financial Institutions (CDFI) Fund. The aim of the program is to provide financial assistance to certified CDFIs serving Native American, Alaska Native, or Native Hawaiian populations and areas. The financial references and allocations in the document are central to understanding how these awards are intended to support these communities.

Funding Allocations and Awards:

The document specifies different types of financial awards available through the NACA program. FA (Financial Assistance) awards can go up to $1 million, aimed at improving the financial capacity of certified CDFIs to lend in Eligible Markets or Target Markets. On the other hand, TA (Technical Assistance) grants are set at a maximum of $150,000 to help build the organizational capacity of emerging CDFIs or aid in creating new CDFIs that serve Native Communities.

For the fiscal year 2021, the CDFI Fund anticipates distributing approximately $16.5 million through the NACA program. However, it reserves the right to adjust these amounts based on available funding and other criteria, suggesting some flexibility and adaptability in the allocation process.

Relation to Identified Issues:

The financial references, while clearly outlined in terms of amounts, intersect with some potential issues of accessibility and interpretation. For example, the use of specialized terminology such as "Eligible Markets" and "Target Markets" can create uncertainty for applicants unfamiliar with these terms. This lack of detailed definition might lead organizations to question their eligibility for the awards. Consequently, organizations might inadvertently misunderstand the scope of eligible activities and applications.

Another concern is the perceived subjectivity in how fund allocations might be adjusted. The document mentions the potential for reallocating funds to other CDFI Fund initiatives, which introduces uncertainty about how funds might be redirected and based on what criteria. This lack of transparency could be interpreted as favoritism, especially if geographic diversity and administrative errors also play a role in funding decisions in ways that are not clearly delineated.

Moreover, while the document reserves the right to increase initial payment amounts to ensure minimum subsequent payments of at least $25,000 for FA and $5,000 for TA awards, it does not detail the criteria or process for such adjustments. This lack of specificity could lead to questions regarding consistency and fairness in the fund distribution process.

In essence, while the document sets forth clear intentions regarding financial assistance to Native Communities through structured awards, some areas related to financial allocation processes and criteria could benefit from further clarification to ensure fair and equitable access for all potential applicants.