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Inactive Financial Institution Letters


[Federal Register: December 27, 2001 (Volume 66, Number 248)]
[Notices]               
[Page 66975-66978]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de01-180]                         

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DEPARTMENT OF THE TREASURY

 
Office of the Assistant Secretary for Financial Institutions; 
Notice of Funds Availability (NOFA) Inviting Applications for the First 
Accounts Program

AGENCY: Office of the Assistant Secretary for Financial Institutions, 
Department of the Treasury.

ACTION: Notice of Funds Availability (NOFA) inviting applications.

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SUMMARY: The Consolidated Appropriations Act, 2001 (Public Law 106-554, 
114 Stat. 2763, 2763A-126) and the Department of Transportation and 
Related Agencies Appropriations Act, 2001 (Public Law 106-346, 114 
Stat. 1356, 1356A-44) appropriated funds to the Department of the 
Treasury (``Treasury'') to develop and implement programs to expand 
access to financial services for low- and moderate-income individuals 
(the ``First Accounts Program''). This NOFA invites grant applications 
from eligible entities that will either directly, or through one or 
more insured depository institutions/insured credit unions, provide 
low-cost electronic, checking, or other types of accounts to low- and 
moderate-income individuals who currently do not have an account with 
an insured depository institution or an insured credit union. The 
paramount goal of the First Accounts Program grants to be awarded under 
this NOFA is to move a maximum number of ``unbanked'' low- and 
moderate-income individuals to a ``banked'' status with either an 
insured depository institution or an insured credit union. Treasury 
intends to award up to $8 million in appropriated funds under this 
NOFA. Treasury reserves the right to award in excess of $8 million in 
appropriated funds under this NOFA provided that the funds are 
available, and Treasury deems it appropriate. Eligible entities 
include, but are not limited to, insured depository institutions, 
insured credit unions, financial services electronic networks, 
employers of unbanked low- and moderate-income individuals, community 
development financial institutions, nonprofit organizations, States, 
Local Governments, Indian Tribal Governments, and labor organizations.

DATES: Applications may be submitted at any time, commencing December 
27, 2001, and may be submitted by mail or by overnight/express delivery 
service, or electronically, in the format prescribed by Treasury. 
(Applications sent by facsimile or delivered by hand will not be 
accepted). The deadline for receipt of an application is March 20, 
2002. Paper applications received in the specific Treasury office 
designated below after that date will not be considered, except as 
follows. An application mailed via the United States Postal Service 
will be considered as having met the application deadline if it is 
clearly postmarked on or before midnight March 20, 2002. An application 
sent by overnight/express delivery will be considered as having met the 
application deadline if it is placed in transit by no later than March 
20, 2002 with an overnight/express delivery service. In each such case, 
it is advisable to obtain documentation from the carrier showing the 
date the application was placed in transit. A single, clear date stamp 
will help in determining whether the delivery of a paper application 
has met the deadline requirements set forth above. Electronic 
applications received at the specific email address set forth below 
after March 20, 2002 will not be considered. While Treasury will accept 
electronic applications, it is currently unable to collect electronic 
signatures for the First Accounts Program. As a result, an applicant 
sending an application electronically shall also submit by mail or 
overnight/express delivery service signed and dated hardcopy signature 
pages and certifications contained in the First Accounts Program 
application packet. Such hardcopies must be

[[Page 66976]]

received in the specific Treasury office designated below by 6 p.m. EST 
on April 3, 2002. Hardcopy signature pages and certifications received 
in the specific Treasury office designated below after that date and 
time will result in the related application being eliminated from 
consideration for a grant award.

ADDRESSES: Paper applications shall be sent to: Department of the 
Treasury, ATTN: First Accounts, Main Treasury Building, Room 5017, 
Washington, DC 20220. Electronic applications shall be sent to: 
first.accounts@do.treas.gov.

OBTAIN APPLICATIONS: Applications are available on the Treasury website 
at www.treas.gov/firstaccounts.

FOR FURTHER INFORMATION CONTACT: Questions regarding the programmatic 
requirements for the First Accounts Program may be submitted 
electronically to Jean Whaley, Director, Office of the Assistant 
Secretary for Financial Institutions, at jean.whaley@do.treas.gov. All 
questions and accompanying answers will be posted and made available to 
the public at www.treas.gov/firstaccounts.

SUPPLEMENTARY INFORMATION:

I. Background

    Without basic financial services, low- and moderate-income 
individuals may have a reduced ability to manage their finances, and 
may be limited in planning and saving for the future. Such individuals 
may have limited access to other financial products such as credit 
cards, residential mortgages, or automobile loans. Some of the reasons 
why low- and moderate-income individuals do not have bank accounts are 
a lack of low-cost account products tailored to meet their needs, 
previous problems with bank accounts, insufficient convenient access, a 
lack of consumer education, and a financial services provider 
perception that such accounts may not be profitable. The Federal 
Reserve's 1998 Survey of Consumer Finances indicates that nearly one 
out of ten families in the United States lacks either a checking or 
savings account. Most of those families had annual incomes below 
$25,000, and most lived in low- and moderate-income service areas.
    To address this disparity, Congress appropriated funds for the 
First Accounts Program. Specifically, the Consolidated Appropriations 
Act, 2001 (Public Law 106-554, 114 Stat. 2763, 2763A-126) and the 
Department of Transportation and Related Agencies Appropriations Act, 
2001 (Public Law 106-346, 114 Stat. 1356, 1356A-44) authorized the 
Department of the Treasury (``Treasury'') to develop and implement 
programs to expand access to financial services for low- and moderate-
income individuals. Treasury will implement the First Accounts Program 
through three related mechanisms: (1) Funding private sector provision 
of low-cost accounts and access to Automated Teller Machines (``ATMs'') 
to low- and moderate-income individuals who do not currently utilize 
bank accounts or other financial service opportunities; (2) funding 
financial education for low- and moderate-income individuals; and (3) 
conducting research on the financial services needs of low- and 
moderate-income individuals (this is not the subject of this NOFA). 
This NOFA invites grant applications from eligible entities that will, 
either directly or through one or more partners, provide low-cost 
electronic, checking, or other types of accounts and access to ATMs to 
low- and moderate-income individuals who currently do not have an 
account with an insured depository institution or an insured credit 
union. The paramount goal of the First Accounts Program grants to be 
awarded under this NOFA is to move a maximum number of ``unbanked'' 
low- and moderate-income income individuals to a ``banked'' status with 
either an insured depository institution or an insured credit union 
through the development of financial products and services that can 
serve as replicable models in meeting the financial services needs of 
such individuals in other communities without the need for ongoing 
public subsidies. Additional goals include the provision of financial 
education to unbanked low- and moderate-income individuals to enhance 
the sustainability of the new financial relationship. The following 
contains an illustrative listing of the types of projects that are 
eligible to be funded under this NOFA:
    (1) An insured depository institution/insured credit union 
partnering with one or more small business enterprises that are 
employers of unbanked low- and moderate-income individuals to provide 
such employees with both low-cost electronic accounts, and increased 
access to ATMs through the placement of one or more ATMs on-site.
    (2) An insured depository institution or an insured credit union 
providing low-cost checking accounts to unbanked low- and moderate-
income individuals.
    (3) An insured depository institution or an insured credit union 
providing low-cost electronic accounts to unbanked low- and moderate-
income individuals.
    (4) A labor organization, whose membership consists of unbanked 
low- and moderate-income individuals, establishing a low-income 
designated insured credit union or an insured credit union that will 
become certified as a community development financial institution.
    (5) A faith based nonprofit organization partnering with one or 
more insured depository institutions/insured credit unions to provide 
low-cost accounts and financial education for unbanked low- and 
moderate-income individuals.
    (6) An Indian Tribal Government partnering with one or more insured 
depository institutions and/or insured credit unions to provide 
unbanked low- and moderate-income tribal members with low-cost 
electronic accounts, financial education, and increased access to funds 
through the placement of ATMs on the Indian reservation.
    (7) An insured community development financial institution 
partnering with service industry employers (e.g. fast food restaurant 
franchisees) to provide unbanked low- and moderate-income employees 
with free checking accounts, provided a minimum account balance of $100 
is maintained.
    Treasury intends to award up to $8 million in appropriated funds 
under this NOFA. Treasury reserves the right to award in excess of $8 
million in appropriated funds under this NOFA provided that the funds 
are available, and Treasury deems it appropriate. Treasury reserves the 
right to fund, in whole or in part, any, all, or none of the 
applications submitted in response to this NOFA.

II. Eligibility

    In order to be eligible to receive funding under this NOFA, an 
eligible entity shall, at a minimum, propose to provide low-cost 
electronic, checking or other types of accounts to ``unbanked'' low- 
and moderate-income individuals either directly (in the case of an 
applicant that is an insured credit union or an insured depository 
institution) or indirectly through one or more insured depository 
institutions and/or insured credit unions. In addition, only projects 
that propose new activities or expand existing activities will be 
considered eligible for funding under this NOFA. Eligible entities 
include community development financial institutions, depository 
institution holding companies, employers, financial services electronic 
networks, Indian Tribal Governments, insured credit unions (as an 
insured credit union's charter and field of membership allow),

[[Page 66977]]

insured depository institutions, labor organizations, Local 
Governments, non-profit organizations, and States. Individuals are not 
eligible to receive funding under this NOFA. Each application shall 
identify a single applicant, which must, at the time of application, be 
a duly organized and validly existing legal entity under the laws of 
the jurisdiction in which it is incorporated or otherwise established.

III. Application Packet

    An applicant under this NOFA must submit the materials described in 
the application packet in the format prescribed therein. Applications 
are available on the Treasury website at www.treas.gov/firstaccounts.

IV. Definitions

    The following definitions shall apply to the terms contained in 
this NOFA and the application packet:
    (a) Community development financial institution means an 
organization that has been certified as such pursuant to 12 CFR 
Sec. 1805.201 by the Department of the Treasury's Community Development 
Financial Institutions Fund.
    (b) Depository institution holding company means a bank holding 
company or a savings and loan holding company as defined in section 3 
of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1)).
    (c) Electronic account means an account at an insured credit union 
or an insured depository institution that has the following minimum 
features: (1) Electronic access; and (2) provides the same consumer 
protections that are available to other account holders at the same 
institution.
    (d) Eligible entity means any legal entity including a corporation, 
partnership, governmental body, agency, or association, other than an 
agency or instrumentality of the United States.
    (e) Employee means an individual who provides services or labor for 
an employer for wages or other remuneration but does not mean 
independent contractors.
    (f) Employer means a person or entity that engages the services or 
labor of low- and moderate-income employees to be performed in the 
United States for wages or other remuneration, but shall not include an 
agency or instrumentality of the United States.
    (g) Financial services electronic network means an organization or 
entity that provides electronic access to an individual's account at an 
insured credit union or an insured depository institution, including an 
automated teller machine network, point-of-sale-network, and a provider 
of such services through the Internet.
    (h) Indian reservation has the same meaning as in section 4(10) of 
the Indian Child Welfare Act of 1978 (25 U.S.C. 1903(10)) and, to the 
extent not already included, shall include lands held by incorporated 
Native groups, regional corporations, and village corporations, as 
defined or established pursuant to the Alaska Native Claims Settlement 
Act; public domain Indian allotments; and former Indian reservations in 
the State of Oklahoma.
    (i) Indian Tribal Government means any Indian Tribe, band, pueblo, 
nation, or other organized group or community, including any Alaska 
Native village or regional or village corporation, as defined in or 
established pursuant to the Alaska Native Claims Settlement Act which 
is recognized as eligible for special programs and services provided by 
the United States to Indians because of their status as Indians.
    (j) Insured credit union means any credit union, the member 
accounts of which are insured by the National Credit Union Share 
Insurance Fund.
    (k) Insured depository institution means any bank or savings 
association, the deposits of which are insured by the Federal Deposit 
Insurance Corporation.
    (l) Labor organization means an organization of any kind in which 
employees participate and which exists for the purpose, in whole or in 
part, of dealing with employers concerning grievances, labor disputes, 
wages, rates of pay, hours of employment, or conditions of work.
    (m) Local Government means a political subdivision of a State 
including, without limitation, a county, municipality, city, town, 
township, local public authority school district, special district, 
intrastate district, or any agency or instrumentality of any of the 
foregoing.
    (n) Low- and moderate-income means a family income that does not 
exceed--(1) for nonmetropolitan areas, 80 percent of the statewide 
median family income; or (2) for metropolitan areas, 80 percent of the 
greater of the statewide median family income or metropolitan area 
median family income.
    (o) Low- and moderate-income service area means: (1) An Indian 
reservation; (2) any population census tract located within a 
metropolitan area in which the median family income does not exceed 80 
percent of the greater of the statewide median family income or the 
metropolitan median family income; or (3) any population census tract 
which is not located within a metropolitan area in which the median 
family income does not exceed 80 percent of statewide median family 
income.
    (p) Low-income designated credit union means an insured credit 
union that meets the criteria contained in 12 CFR 701.34.
    (q) State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of 
any of the foregoing.
    (r) Unbanked means an individual who currently does not have an 
account at an insured credit union or an insured depository 
institution.

V. Evaluation

    All applications will be reviewed for eligibility and completeness. 
If determined to be eligible and complete, applications will be 
evaluated by Treasury on a competitive basis in accordance with the 
criteria contained in this NOFA.

Phase One--Scoring Review

    In conducting its initial substantive review, Treasury will 
evaluate each application and assign numeric scores using a 100 point 
scale as follows:
    (a) The Likelihood of Success Criterion (the extent to which the 
project: (1) Will serve a meaningful number of unbanked low- and 
moderate-income individuals; (2) is shown to be likely to result in the 
provision of both low-cost electronic, checking or other types of 
accounts, and expanded access to ATMs, to such individuals; (3) 
demonstrates that costs to be incurred by low- and moderate-income 
individuals are the least necessary to achieve goals; and (4) actively 
involves employers of unbanked low- and moderate-income individuals): 
20 points maximum
    (b) The Reasonableness of Approach Criterion (the extent to which 
project activities demonstrate a well-researched and well-reasoned 
approach toward expanding the provision of financial products and 
services to unbanked low- and moderate-income individuals): 20 points 
maximum.
    (c) The Self-Sustaining Criterion (the extent to which the project 
activities can become self-supporting): 15 points maximum.
    (d) The Model Qualities Criterion (the extent to which the project 
demonstrates a replicable framework on a national, regional, State, or 
local basis): 10 points maximum.
    (e) The Timeliness Criterion (the extent of the speed in which the 
project will be rolled out and begin to achieve measurable, positive 
results): 10 points.

[[Page 66978]]

    (f) The Performance Goal Setting Criterion (the extent to which the 
project has specific, measurable, and relevant performance goals): 10 
points.
    (g) The Experience/Track Record Criterion (the extent to which the 
applicant and other participating entities have previous experience on 
projects of a similar scale and scope, and have a track record of 
success in carrying out such projects): 10 points.
    (h) The Management Capability Criterion (the extent to which the 
management team has the demonstrated ability to manage projects): 5 
points.
    In order to be considered eligible to advance to the next phase of 
substantive review, an applicant must receive a minimum score of 50 
points.

Conditional Selection/Second Phase Review

    Once the initial evaluation is completed, Treasury will determine 
which of those applications that received at least 50 points will be 
conditionally selected based on the Phase One scores and the amount of 
funds available. In addition, Treasury will seek to conditionally 
select a group of applicants whose projects are geographically diverse, 
e.g., covering metropolitan, nonmetropolitan, and rural areas as well 
as different regions of the United States.
    Once Treasury determines which applicants have been conditionally 
selected, Treasury will contact such applicants and may interview third 
parties to obtain clarifying or confirming information on each 
conditionally selected applicant. Once such information has been 
collected and analyzed, Treasury staff will make a recommendation to 
the Treasury selecting official who will make a final funding decision 
based on the applicant's file including, without limitation, Phase One 
evaluations and Phase Two recommendations, the amount of funds 
available, and geographic and institutional diversity considerations.

Award Requirements

    Each awardee will be required to enter into a grant agreement with 
Treasury before it may begin project activities and receive a Treasury 
disbursement of grant funds. The terms and requirements for funding 
will be set forth in both a Notice of Award and the grant agreement. 
Some of these requirements are as follows:
    (a) Grant funds can only be used for the purposes set forth in the 
grant agreement.
    (b) Each awardee will be responsible for completing the project and 
expending the grant funds within the time period set forth in the grant 
agreement.
    (c) Each awardee will be required to submit periodic reports and a 
final report to Treasury.

    Authority: Pub. L. 106-554, 114 Stat. 2763, 2763A-126; Pub. L. 
106-346, 114 Stat. 1356, 1356A-44; 31 U.S.C. 321.

    Dated: December 17, 2001.
Sheila C. Bair,
Assistant Secretary for Financial Institutions.
[FR Doc. 01-31818 Filed 12-26-01; 8:45 am]
BILLING CODE 4810-25-P

Last Updated 01/24/2002 communications@fdic.gov