89 FR 235 pgs. 97167-97169 - Notice of Information Collection and Request for Public Comment
Type: NOTICEVolume: 89Number: 235Pages: 97167 - 97169
Pages: 97167, 97168, 97169FR document: [FR Doc. 2024-28521 Filed 12-5-24; 8:45 am]
Agency: Treasury Department
Sub Agency: Community Development Financial Institutions Fund
Official PDF Version: PDF Version
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DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Information Collection and Request for Public Comment
ACTION:
Notice and request for public comment.
SUMMARY:
[top] The U.S. Department of the Treasury, as part of a continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act (PRA) of 1995. Currently, the Community Development Financial Institutions Fund (CDFI Fund), Department of the Treasury, is soliciting comments concerning the Small Dollar Loan Program (SDL Program) Application (Application). The Application is an online form submitted through the CDFI Fund's Awards Management
DATES:
Written comments must be received on or before February 4, 2025 to be assured of consideration.
ADDRESSES:
You may submit comments concerning the SDL Program Application via the Federal e-Rulemaking Portal at www.regulations.gov . Follow the instructions on the website for the submission of comments. In general, all comments will be available for inspection at www.regulations.gov . Comments, including attachments and other supporting materials, are part of the public record. Do not submit any information in your comments or supporting materials that you consider confidential or inappropriate for public disclosure. Information regarding the CDFI Fund and its programs may be obtained through the CDFI Fund's website at http://www.cdfifund.gov .
FOR FURTHER INFORMATION CONTACT:
Eddie Tsibulevskiy, Program Manager, SDL Program, CDFI Fund, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220, by email to SDLP@cdfi.treas.gov, or phone 202-653-0421 (Option 3).
SUPPLEMENTARY INFORMATION:
Title: Small Dollar Loan Program Application.
OMB Number: 1559-0051.
Abstract: The Small Dollar Loan Program (SDL Program) was authorized by Title XII-Improving Access to Mainstream Financial Institutions Act of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Pub. L. 111-203), which amended the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4719). Through the SDL Program, the CDFI Fund provides Federal Financial Assistance in the form of grants for loan loss reserves and technical assistance to enable award recipients to establish and/or expand small dollar loan programs. Small dollar loan programs supported by the SDL Program are intended to address the issues of consumer access to mainstream financial institutions and provide alternatives to high-cost small dollar loans. The SDL Program is also intended to enable award recipients to help unbanked and underbanked populations build credit, access affordable capital, and allow greater access into the mainstream financial system.
Through the SDL Program, the CDFI Fund provides:
• Grants for Loan Loss Reserves (LLR): The awards will enable a Certified Community Development Financial Institution (CDFI) to establish a loan loss reserve fund to defray the costs of establishing or expanding a small dollar loan program.
• Grants for Technical Assistance (TA): The awards will support technology, staff support, and other eligible activities to enable a Certified CDFI to establish and maintain a small dollar loan program.
SDL Program Award Recipients are selected through a competitive process involving a careful review of all Applications for program funding. The Application requires the submission of numeric data and narrative responses in three parts: 1. Market Need; 2. Business Strategy and Impact; and 3. Organizational Capacity, including financial and compliance-related data. The Award selection process is defined in the Notice of Funds Availability (NOFA) for each funding round.
SDL Program Award Recipients enter into Assistance Agreements with the CDFI Fund that set forth required terms and conditions of the Award, including reporting and data collection requirements. The Assistance Agreement requires the submission of annual performance reports. The CDFI Fund reviews the information collected in the performance reports to ensure the Recipient's compliance with its Performance Goals and contractual obligations, as well as monitor the overall performance of the program.
This request for public comment relates to the SDL Program form under OMB control number 1559-0051, which includes the Application. Capitalized terms not defined in this Notice (other than titles) have the meaning set forth in the fiscal year (FY) 2024 SDL Program NOFA.
Current Actions: Renewal of existing Information Collection.
Type of Review: Regular Review.
Affected Public: Businesses or other for-profit institutions, non-profit entities, and State, local and Tribal entities participating in CDFI Fund programs.
Estimated Number of Respondents: 100 (Application).
Estimated Annual Time per Respondent: 89 hours (Application).
Estimated Annual Burden Hours: 8,900 hours (Application).
Request for Comments: Comments submitted in response to this Notice will be summarized and/or included in the request for Office of Management and Budget approval. All comments will become a matter of public record and may be published on the CDFI Fund website at https://www.cdfifund.gov . The CDFI Fund is seeking input on the SDL Program Application. The Application may be obtained from the Request for Public Comments page of the CDFI Fund's website at https://www.cdfifund.gov/requests-for-comments .
The CDFI Fund is seeking: (a) specific input on the content of the SDL Program Application and (b) general input on the SDL Program related topics and considerations.
Comments concerning the Application 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 to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of technology; (e) estimates of capital or start-up costs and costs of operation, maintenance and purchase of services required to provide information; and (f) whether any additional questions or factors should be considered as part of the CMF Application and/or review process.
Additionally, the CDFI Fund specifically requests comments concerning the following questions:
1. Should any data fields, questions, or tables, be added, removed, or clarified to ensure collection of relevant information?
2. The Application states that LLR Awards cannot exceed 20% of the Applicant's three-year projected total of small dollar loans closed. Is the 20% cap appropriate for the purpose of supporting a wide variety of small dollar loan program designs? If not, provide a rationale and state what alternative cap would be more appropriate.
3. Is the maximum LLR Award size of $350,000 appropriate for the purpose of supporting a wide variety of small dollar loan program designs? If not, what maximum award size would be more appropriate and why?
[top] 4. The Application requests information on how the Applicant will use an LLR Award to establish a small dollar loan program or expand an existing one. Is the requested information adequate to demonstrate a
5. Is the maximum award size for Technical Assistance Awards of $150,000 appropriate to support eligible Technical Assistance activities? If not, what maximum award size would be appropriate and why?
6. Is the data collected in the track record and projections tables adequate and appropriate to assess an Applicant's experience in small dollar lending and projections? Why or why not?
7. The period of performance for SDLP awards is three years. Is three years sufficient to expend the award to launch or expand a small dollar loan program? If it's not sufficient, what period would be more appropriate and why?
8. Is there other information not requested (such as additional detail on other unsecured consumer loans below $10,000) in the Application that would demonstrate an Applicant's experience in small dollar lending and projected small dollar lending activities? If yes, what is that information?
9. The Application includes questions about the intended impact of an Applicant's small dollar lending strategy. (1) How should the CDFI Fund assess the impact of SDL Program Awards on communities served by Applicants? (2) The CDFI Fund has identified a set of impact options for Applicants to choose in the Application. Are the current impact choices sufficient? Why or why not? Are there impacts that should be added or modified and if yes, what are they?
10. The SDL Program Application states that the Awards will not be made to Applicants that engage in the Prohibited Practices listed in Table 1. Are the Prohibited Practices appropriate to prevent predatory or abusive lending practices that low-income borrowers often face? Why are why not? Are there any Prohibited Practices that should be added, eliminated, or clarified? What are they?
| Prohibited practice | Prohibited practice definition |
|---|---|
| i. High-Rate loans | Loans that exceed the lower of the following two rates: (1) an all-inclusive 36% APR (using the methodology prescribed in 32 CFR 232.4 of the Military Lending Act (referred to as the Military Annual Percentage Rate [MAPR]; or (2) the interest rate limit as set by the state agency that oversees financial institutions in your state. |
| ii. Coerced automated repayments | Loans that: (1) have delayed loan disbursements for borrowers who do not agree to automatic repayments, (2) charge fees for borrowers who select manual payments, or (3) require borrowers to make payments using wire transfers or other means that may result in additional fees for borrowers. |
| iii. Excessive refinancing | Loans that allow refinancing before at least 80% of the principal has been repaid. |
| iv. Loan insurance or credit card add-ons | Loans that offer add-on insurance or credit card products, whether they are automatic or not, that require borrowers to opt-in or opt-out to decline coverage or require the borrower to accept or opt-out of a credit card. For example, loans that automatically include insurance products such as credit, life, disability insurance or involuntary unemployment insurance coverage, or loans that automatically open a credit card for the borrower. |
| v. Security interests in household goods, vehicles, or deposit accounts. Exception: loans with a savings account component or credit builder loans | Loans that are secured, except for loans secured by a savings account for loans with a savings component or credit builder loans. |
| vi. Excessive late fees on missed loan payments | Loans that charge more than one fee per late payment. |
| vii. Abusive overdraft practices | Lenders who hold the account from which repayment is being made may not collect a loan payment from the borrower's account that overdraws the account, triggering overdraft fees. |
| viii. Aggressive debt collection practices | Loans in which the lender: • Does not offer a workout program or other accommodations to help struggling borrowers before pursuing other debt collection avenues. • All debt collection activities must comply with the Fair Debt Collection Practices Act, whether conducted by the lender, a contract debt collector or sold to third party debt collectors. • Does not disclose to borrowers the details of its debt collection practices or provide notice to a borrower when its account is placed with debt collectors. |
| ix. Forced arbitration clause, class action ban, and other bans on legal remedies | Loan contracts that contain clauses that prevent borrowers from seeking legal remedies in court, such as mandatory arbitration clauses, or clauses requiring that the borrower waive the right to a trial by jury or the right to participate in a class action lawsuit. |
Authority: (Pub. L. 111-203. 12 U.S.C. 4719, 12 CFR part 1805, 12 CFR part 1815, 12 U.S.C. 4502)
Pravina Raghavan,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2024-28521 Filed 12-5-24; 8:45 am]
BILLING CODE 4810-05-P