The Department of Treasury’s, Community Development Financial Institutions (“CDFI”) Fund seeks comment on an interim rule requiring non-profit CDFI Fund awardees to submit audited (not merely reviewed) financial statements as part of their annual report to the CDFI Fund.
Empowering individuals, “unleashing the economic potential of small businesses,” establishing affordable housing, creating employment opportunities, and revitalizing communities, requires “[a]ccess to credit, investment capital, and financial services.” The CDFI Fund (the “Fund”) was created as a “wholly owned government corporation by the Community Development Banking and Financial Institutions Act of 1994” (the “Act”) and placed within the Department of Treasury. The Fund’s programs are intended to make possible the “flow of lending” and “investment capital” to underserved “communities and . . . individuals” who are not able to “take full advantage of the financial services industry.”
The long-term goal of the CDFI Fund (the “Fund”) is to “economically empower America’s underserved and distressed communities” by boosting financial opportunity and encouraging “community development investments” for “underserved populations in the United States.” Specifically, the CDFI Program (the “Program”) promotes “economic revitalization” and “community development” by helping and investing in CDFIs, which focus on serving “underserved markets . . . .”
CDFIs are smaller and frequently have challenges in “raising the capital needed” to provide adequate services. In order to improve the ability of CFIs to provide their products and services to the intended communities, the Fund gives them financial help, via “grants, loans, equity investments and deposits,” to CDFIs chosen through a “merit-based application process.”
Non-profit awardees of the Fund have time and expense challenges in obtaining “audited financial statements” within the required 180-day period after the end of their fiscal year. Thus, current Program regulations allow non-profit CDFI awardees, as part of their annual report, to “submit financial statements” that are “reviewed,” and not “audited” by “independent certified public accounts.”
This interim rule, however, in order to conform to the requirements of the Act, proposes to amend CDFI Program rules and now require non-profit awardees to provide “audited financial statements within 180 days” after the end of their fiscal year end. With this change, a mere review by an independent certified public accountant will no longer suffice for non-profit CDFI awardees.
Interested parties are invited to submit comments, addressed to the CDFI Program Manager, by December 30, 2013 by one of the following methods:
- Electronic: (preferred method) http://www.regulations.gov
- Email: email@example.com
- Fax: (202) 453-2466
- Traditional mail: to the CDFI Program Manager, Community Development Financial Institutions Fund, Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220.
This post was originally published on the legacy ABA Section of Administrative Law and Regulatory Practice Notice and Comment blog, which merged with the Yale Journal on Regulation Notice and Comment blog in 2015.