COVID-19 Government Resources for CDFI Banks and Borrowers
Multiple federal agencies are responding to the needs of CDFI banks and their customers during the COVID-19 crisis. To address the needs of small business, the Keeping American Workers Paid & Employed Act was passed as Division A of the Coronavirus Aid, Relief, and Economic Security Act (CARES). Other Divisions of the CARES Act address the regulatory concerns of CDFI banks such as liquidity and asset quality.
Treasury Department Emergency Capital Investment Program (ECIP)
ECIP is open as of March 4, 2021. All applications must be submitted through Treasury’s portal no later than 11:59 p.m., ET on Friday, May 7, 2021.
Established by the Consolidated Appropriations Act, 2021, the Emergency Capital Investment Program (ECIP) was created to encourage low- and moderate-income community financial institutions to augment their efforts to support small businesses and consumers in their communities. Under the program, Treasury will provide up to $9 billion in capital directly to depository institutions that are certified Community Development Financial Institutions or minority depository institutions to, among other things, provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially in low-income and underserved communities, that may be disproportionately impacted by the economic effects of the COVID-19 pandemic. See below for essential program documents:
- Application Instructions
- Senior Preferred Stock Term Sheet
- Subordinated Debt Term Sheet (Mutuals and S Corps)
- Interim Final Rule, Incl. Restrictions on Executive Compensation, Share Buybacks, and Dividends
- Application Portal
- Application Portal Instructions
- OCC, FDIC and FRB Amendment to the Capital Rule to Facilitate the ECIP
For questions about the ECIP and to be informed about program updates, please contact Treasury at ECIPInquiries@treasury.gov.
CDFI Fund Rapid Response Program (RRP) Resources
The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (Act; Pub. L. 116-260) provided $1.25 billion to the CDFI Fund to award CDFIs with grants to deliver immediate assistance in communities impacted by the COVID-19 pandemic. The CDFI Fund will be awarding these funds through its newly established CDFI Rapid Response Program (CDFI RRP), which is designed to quickly deploy capital to Certified CDFIs through a streamlined application and review process. Through the CDFI RRP, CDFIs will be provided with resources necessary to respond to the economic impacts of the COVID-19 pandemic in distressed and uerserved communities and people. To meet the expedited award deadlines required by Congress for the CDFI RRP, the CDFI Fund will utilize and leverage its existing CDFI Certification and CDFI Program Financial Assistance and Technical Assistance application evaluation processes, as well as the Awards Management Information System (AMIS).
- Program Overview Presentation
- Pre-Application Webinar Presentation
- FY 2021 CDFI Rapid Response Program NOFA
- FY 2021 CDFI Rapid Response Program Application Guidance
- FY 2021 CDFI Rapid Response Program Evaluation Process
- Application Financial Data Inputs Workbook - FOR REFERENCE ONLY
- Forms, Assurances, and Certifications
- FY 2021 CDFI Rapid Response Program Frequently Asked Questions (FAQs)
FY 2021 Application Timeline
|February 25, 2021||
FY 2021 FY 2021 Round Opening
|March 22, 2021, 11:59 PM ET||
Deadline for Creating an AMIS Account
|March 22, 2021, 11:59 PM ET||
Deadline to enter EIN and DUNS numbers in AMIS
|March 22, 2021, 11:59 PM ET||
Deadline for Submitting SF-424 through Grants.gov
|March 23, 2021, 5:00 PM ET||
Last Day the CDFI Fund Will Answer Questions About the Application
|March 25, 2021, 5:00 PM ET||
Deadline to Receive AMIS Support from the IT Help Desk
|March 25, 2021, 11:59 PM ET||
Deadline for Submitting CDFI RRP Application through AMIS
FY 2021 CDFI RRP Awards Announced
PPP Program Updates - 2/22/21, 3/4/21 and 3/12/21
SBA released updated FAQs 3/12/21 and an IFR on 3/18/21. Multiple Questions have been adjusted to reflect IFR changes since Jan of this year.
- Frequently Asked Questions: PPP-FAQs-3.12.21
- How to Calculate First Draw Loans: How to Calculate First Draw PPP Loan Amounts
- How to Calculate Second Draw Loans: How to Calculate Second Draw Loan Amounts
- Interim Final Rule 3/18/21: PPP Interim Final Rule - PPP as Amended by American Rescue Plan Act
SBA announced several reforms to "further target the PPP to the smallest businesses and those that have been left behind in previous relief efforts. (Click here for the Fact Sheet). SBA released an Interim Final Rul 3/3.
- PPP IFR - "Business Loan Program Temporary Changes; Paycheck Protection Program – Revisions to Loan Amount Calculation and Eligibility"
- Loan Calculation and Eligibility Updates - March 4 Presentation Deck
The reforms include:
- A 14-day period, during which only businesses with fewer than 20 employees can apply for relief through the PPP;
- Helping sole proprietors, independent contractors, and self-employed individuals receive more financial support by revising "the loan calculation formula for these applicants so that it offers more relief," including extending the current "farmers and ranchers" definition of income to these businesses;
- Establishing a $1 billion set aside for businesses in this category without employees, who are also located in low- and moderate-income (LMI) areas (Defined as "CRA qualifying" LMI census tracts);
- Eliminating an exclusionary restriction that prevents small business owners with prior non-fraud felony convictions from obtaining relief through the PPP;
- Eliminating an exclusionary restriction that prevents small business owners who are delinquent on their federal student loans from obtaining relief through the PPP;
- Ensuring access for non-citizen small business owners who are lawful U.S. residents by clarifying that they may use Individual Taxpayer Identification Numbers (ITINs) to apply for relief
PPP Guidance and Resources - 2/1/21
- Posted Questions 54-56 on FinCEN, Bank Secrecy Act/Anti-Money Laundering, and public broadcasting stations
PPP and Other SBA Guidance and Resources - 1/29/21
- Information Notice 5000-20087 – Updated Section 1112 Tax Implication Reporting Requirements
- Procedural Notice 5000-20089 – Extend 7(a) and 504 Electronic Signatures through 4-30-21
- Procedural Notice 5000-20090 – Extend Microloan Electronic Signatures through 4-30-21
- Procedural Notice 5000-20088 – Extend Microloan Closings through 4-30-21
- SBA Procedural Notice 5000-20083 - SBA Paycheck Protection Platform Procedures for Addressing Unresolved Issues on Borrower First Draw PPP
- SBA Procedural Notice 5000-20084 - Implementation of Modifications to the 7(a) Loan Program in the Economic Aid to Hard- Hit Small Businesses, Nonprofits, and Venues Act
- SBA Procedural Notice 5000-20085 - Elimination of Certain 504 Loan Program Fees as Authorized by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act
- SBA Procedural Notice 5000-20086 - Notice to Lenders that SBA has Informed Eligible Borrowers of Assistance Available under Section 1112 of the CARES Act
PPP Guidance and Resources - 1/21/21
- Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as Amended by Economic Aid Act (Released 1/19/2021)
- PPP Loan Forgiveness Application Form 3508 (Revised 1/19/21)
- PPP Loan Forgiveness Application Form 3508EZ (Revised 1/19/21)
- PPP Loan Forgiveness Application Form 3508S (Revised 1/19/21)
- Borrower's Disclosure of Certain Controlling Interests (Released 1/19/2021)
PPP Guidance and Resources - 1/19/21
- Procedural Notice - PPP Borrower Resubmissions of Loan Forgiveness Applications Using Form 3508S, Lender Notice Responsibilities to PPP Borrowers, and Offset of Remittances to Lender for Lender Debts
- Procedural Notice - Paycheck Protection Program Excess Loan Amount Errors
- How to Calculate Maximum Loan Amounts for First Draw PPP Loans and What Documentation to Provide – By Business Type
- Second Draw Paycheck Protection Program (PPP) Loans: How to Calculate Revenue Reduction and Maximum Loan Amounts Including What Documentation to Provide
- Guidance on Accessing Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns
- Interim Final Rule on the Paycheck Protection Program (PPP) as Amended by the Economic Aid Act
- Interim Final Rule on PPP Second Draw Loans
- Top line Overview of PPP First Draw Loans
- Top line Overview of PPP Second Draw Loans
- PPP First Draw Borrower Application Form
- PPP First Draw Lender Guaranty Application Form
- PPP Second Draw Borrower Application Form
- PPP Second Draw Lender Guaranty Application Form
- SBA PPP Website
- Treasury PPP Website
News Related to Covid-19
On behalf of the members of the Community Development Bankers Association (CDBA) and the National Bankers Association (NBA), we strongly urge you to support the bipartisan $908 billion package in the pending Senate Coronavirus relief and recovery bill.
CDBA wrote to the Chairman of the Board of Governors of the Federal Reserve System, Jerome Powell, to submit comments and recommendations on the proposed expansion of liquidity facilities to nonprofit entities released by the Board of Governors on June 15, 2020. While CDBA commends the agency for its willingness to step in to help financial institutions meet the credit needs of nonprofits during the crisis, the facilities must position the smaller nonprofits that comprise the great majority of the sector and are part of America’s “Main Street,” for long-term recovery. As such, CDBA recommends that the Federal Reserve lower thresholds so that lenders, particularly CDFIs, may better serve the nonprofit sector.
The entire cohort of Alabama-based Community Development Financial Institutions (CDFIs) wrote to the Chairman of the U.S. Senate Appropriations Committee, Senator Richard Shelby, urging the Senator to support $1 billion in emergency funding for the Community Development Financial Institutions Fund (CDFI Fund) of the U.S. Department of the Treasury in the next economic stimulus package. These institutions further urged Congress to waive any matching funds requirements to get funds onto the street expeditiously. Given the CDFI Fund's reputation as one of the Federal government’s best market-based strategies for restoring economic vitality in underserved markets, the resources will be vital to stabilizing Alabama’s economy, preserving jobs, and creating new job opportunities.
The Community Development Bankers Association (CDBA) and Inclusiv - the trade associations for CDFI banks and credit unions - wrote to Senate and House leadership regarding critical considerations for SBA Paycheck Protection Program reforms. To ensure federal funding meets the needs of small businesses and nonprofits, the associations urge that reform include measures such as reducing the limitations on using PPP loans for non-payroll expenses, updating the fee structure for PPP lenders, and authorizing more forgiveness flexibility. These reforms would not only enable small businesses to retain and rehire employees, but would also ensure CDFIs can address the long-term recovery needs of their business customers in low- and moderate-income markets.
CDBA CEO Jeannine Jacokes wrote to the Secretary Mnuchin of the U.S. Department of the Treasury and Administrator Carranza of the Small Business Administration (SBA) urging the SBA to immediately promulgate revised Interim Final Rules and/or FAQs clearly affirming the eligibility of CDFIs to apply for PPP loans, given their qualification as small businesses or nonprofits under the CARES Act. Under the CARES Act, the great majority of CDFI banks qualify as small businesses. Likewise, their nonprofit counterparts are explicitly eligible as nonprofit 501(c)(3) organizations. Yet, the agency has imposed a rule that arbitrarily excludes some organizations as borrowers based on the type of businesses in which they engage.