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CDFI Certification Procedures

2009

CommunityDevelopment

FinancialInstitutions

Fund

Table of Contents

Introduction..............................................................................................................................................4Overview of the CDFI Fund.............................................................................................................4CDFI Certification Criteria...............................................................................................................4Types of CDFI Certification Review................................................................................................5Certification Process Roles...............................................................................................................5

New Applications.....................................................................................................................................7Overview..............................................................................................................................................7Intake....................................................................................................................................................7

Intake Overview...............................................................................................................................7Intake Steps.......................................................................................................................................8

Review................................................................................................................................................12Review Overview...........................................................................................................................12New Application Review Steps......................................................................................................13

Timeline..............................................................................................................................................15Timeline Overview.........................................................................................................................15Timeline Table................................................................................................................................15

Material Events.......................................................................................................................................16Overview............................................................................................................................................16Intake..................................................................................................................................................17

Intake Overview.............................................................................................................................17Intake Steps.....................................................................................................................................18

Review................................................................................................................................................18Material Event Review Overview..................................................................................................18Material Event Review Steps.........................................................................................................18


Recertification........................................................................................................................................21Overview............................................................................................................................................21Intake..................................................................................................................................................21


Review................................................................................................................................................22Recertification Review Overview..................................................................................................22Recertification Review Steps..........................................................................................................22


Decertification........................................................................................................................................25Overview............................................................................................................................................25Intake..................................................................................................................................................25


Review................................................................................................................................................26Decertification Review Overview..................................................................................................26Decertification Review Steps.........................................................................................................26

Revision Date: 9/28/09


Target Market Modification Requests....................................................................................................29Overview............................................................................................................................................29Intake..................................................................................................................................................29


Review................................................................................................................................................29Target Market Review Overview...................................................................................................29Target Market Review Steps..........................................................................................................30



Introduction

Overview of the CDFI Fund

The Community Development Financial Institutions Fund (the CDFI Fund) provides a variety of programs that expand the capacity of financial institutions to provide credit, capital, and financial and technical assistance services to underserved populations and communities in the United States.

In order to qualify to apply for those services, organizations must first become certified by the CDFI Fund. Certification is a three-year renewable designation given to an organization that meets the Fund’s seven criteria for eligibility. Once certified, an organization is eligible to apply for the following financial and technical assistance awards, or new markets tax credits:

Direct financial or technical assistance investments to Community Development Financial Institutions (CDFIs) for loans, investments, financial services, and technical assistance to underserved populations and communities.

New Markets Tax Credits (NMTC) to Community Development Entities (CDEs) for attracting private sector business investments in low-income communities.

A Bank Enterprise Award (BEA) program to provide monetary incentives to banks to invest in distressed communities and CDFIs.

Financial and technical assistance from the Native American CDFI Assistance (NACA) program for Native American CDFIs and other Native community entities proposing to become or create Native American CDFIs. “Native” is defined as Native American, Alaska Native and Native Hawaiian people.

CDFI Certification applicants comprise a broad range of entities, from community development banks and credit unions to micro-enterprise loan and venture capital funds. What they must have in common is the proven ability to provide financial products and services to a defined underserved and/or economically distressed market using the CDFI Fund’s seven criteria of eligibility as a benchmark.

The seven criteria that organizations are required to meet for CDFI Certification are the following:

CDFI Certification Criteria

1. Legal entity – Must be duly organized and validly exist under the laws of the state jurisdiction in which it is incorporated or established.

2. Primary mission – Have a primary mission of promoting community development. 3. Financing entity – An organization whose predominate business activity is the provision of financial

products and development services. 4. Target markets – Serve a specific targeted population or investment area. 5. Development services – Provide client services that prepare borrowers to manage their financing

activities. 6. Accountability - Demonstrate accountability to the target market, through governing board

representation and/or other means. 7. Non-government entity - Not be under control of any government entity (tribal governments typically

excluded).


Types of CDFI Certification Review

Types of CDFI Certification Reviews typically fall into several categories:

New Certification Application – An organization must apply for and become a Certified CDFI if it intends to access many of the CDFI Fund’s programs. An organization may also apply for CDFI certification, even if it does not intend to apply for CDFI Program funding. Typically, financial institutions that seek the CDFI Certification outside of CDFI Fund program assistance have a fundraising strategy directed towards private foundations and state development assistance programs. Certification Applications are received by the CDFI Fund throughout the year on a rolling basis. However, any organization that anticipates seeking financial or technical assistance funding under a CDFI Program must submit a Certification Application to the CDFI Fund prior to a funding application deadline as cited in the applicable Federal Register Notice of Funds Availability (NOFA). Certification of Material Events Form - A “Material Event” is an occurrence that effects an organization’s strategic direction, mission, or business operation and, thereby, its status as a CDFI, and/or its compliance with the terms and conditions of an assistance agreement. Material Events must be reported to the CDFI Fund within 30 days of when they occur, and the staff will review them to determine whether the organization continues to meet the certification requirements for CDFI Certification.

Recertification – In order to maintain its certification status, a certified CDFI must demonstrate that it continues to meet the certification criteria at the end of the three-year certification term. This recertification follows the general processing procedures as certification, but evaluation focuses on what has changed since the initial CDFI certification approval or the most recent recertification approval.

Decertification – If it comes to the attention of the CDFI Fund, through a Recertification or Material Event review, or otherwise, that a certified CDFI may not be meeting all of the certification criteria, the CDFI Fund will conduct a review of that CDFI’s adherence to the CDFI Certification criteria. If the CDFI Fund finds that a certified CDFI no longer meets all of the CDFI Certification criteria, it will decertify the CDFI.

Target Market Modification Request – At any time a certified CDFI may request a modification to its certified Target Market. A certified CDFI may wish to make such a change because, among many reasons, the areas or populations that it serves is expanding or contracting. However, if a certified CDFI is unable to continue to meet the Target Market certification criterion because 60% of its activities are no longer directed to it certified Target Market, the CDFI must request a Target Market Modification or face decertification.

Certification Process Roles

The CDFI Fund’s certification review staff comprises the following rolls:

Approving Official (AO) – Makes reviewer assignments and is the final decision-making authority for certification applications. Team Leader (TL) – Reviews recommendations of Application Reviewers prior to submission to Approving Official, and is a resource to Application Reviewers.Application Reviewer (AR) – Reviews applications, communicates with applicants and makes recommendations to the Approving Official.Certification Application Coordinator (CAC) – Intakes applications and updates database information.Decision Letter Coordinator (DLC) – Sends certification decision notifications to applicants.


Mail Clerk (MC) – Receives and date-stamps applications in central mailroom and delivers to CAC.

Note: For detailed information regarding the review of CDFI Certification applications, please see CDFI Certification Application Review Guidance.


New Applications

Overview

Certification as a CDFI allows organizations to participate in the CDFI Program, NACA Program and to obtain additional benefits under the BEA Program. The CDFI Certification page on the CDFI website contains the program regulation, application materials, lists of certified CDFIs by organization name, state, and type of institution, and other supplemental resources that make it easy for an entity to apply for certification.

The CDFI Fund application for new certification application is located at: http://www.cdfifund.gov/docs/certification/CDFI/CDFIcertificationApplication.pdf

New applications may be submitted, and will be reviewed, on a rolling basis throughout the year, and decisions will be made within 90 calendar days of application submission

Intake

Intake Overview

When prospective CDFI certification applications come into the Fund mailroom, they are opened and date-stamped by a mail clerk who then hand-delivers them to the certification application coordinator or designee. The coordinator logs each application into two different information and tracking database forms.

The first Intake form the certification application coordinator uses is the Certification Application Tracking Report, which is an Excel spreadsheet that basically tracks the progress of the application. It is updated throughout the application process when information becomes available, and it includes basic processing information such as organization name, control #, Reviewer name, review status, due date, and a brief comment on issues related to the application.


http://www.cdfifund.gov/docs/certification/CDFI/CDFIcertificationApplication.pdf

Sample CDFI Certification Tracking Report

Using an organization’s submitted application, key pieces of contact, organization and affiliate information are then entered by the certification application coordinator into the second intake form called the Certification Systems Database (see pages 9-11). Once this has been completed, a control number is automatically assigned to the application, and it is ready for to be assigned for review.

Control Number

The Control Number is a unique number that will follow each application from folder to file to certification.

021CE002310 - Example of a CDFI Certification Control Number

First two characters indicate the fiscal year in which the application was received. Third character identifies the application within that fiscal year. (This is significant only if multiple

applications from the same applicant are received in the same fiscal year. In most cases the third character will be a one.)

Fourth and fifth characters will always be “CE” for certification application control numbers. Final six characters are a unique numeric identifier.

Intake Steps

1. Application Receipt: Certification Application (original and a copy) arrives at the Fund and is opened and date stamped by a mail clerk who then delivers the 2 copies to the Certification Application Coordinator. (2 days)

2. Certification Systems Database Initial Data Entry: Certification Application Coordinator (or designee) enters basic application information into the Certification Systems Database on the Intranet: CDFI Systems > Certification & Training > CDFI Certification Systems > Intake. The process is detailed in the sub-section below titled, “Certification Systems Database Data Entry Procedure.” (2 days)


3. CDFI Certification Tracking Report Update: The Certification Application Coordinator logs the application into the CDFI Certification Tracking Report spreadsheet located on the J drive > Certification & Training > CDFI Certification > CDFI Certification Tracking Report. The CAC then places application in the certification file cabinet. (2 days)

Certification Systems Database Initial Data Entry Procedure

The following are step-by-step instructions for filling out the Certification Systems Database form.


Step One: Contact Info Tab


Date Received – Enter review date by typing in the numbers or by using the calendar icon to the right of the “Date Received” box. Using the receipt date stamped on the application.

Application Type - Select the type of application that’s being submitted. Note: The page will not save without entering this information.

Signed by Authorized Representative – Select the box verifying that the application been signed by the applicant’s Authorized Representative. Note: If there is no signature, call the Applicant and request a faxed signature. Date Signed – This is the date the Authorized Representative signed the application.

Save – Click Save and move on to the next tab.

Step Two: Organizational Tab

Native CDFI – Use the dropdown arrow to choose whether or not the applicant is a Native CDFI. Note: Native CDFI information can be found on # 11 of the Applicant’s CDFI Questionnaire.

Is the applicant duly organized and validly existing… - Does the Applicant have Articles of Incorporation, a regulatory charter, Certificate of Incorporation, or other similar organizing documents?

Total Assets of applicant… - Total asset number is located on the Applicant’s Signature (cover) page. Note: When entering the number, do not add commas or periods

Save - Click Save and move on to the next tab.


Step Three: Affiliate/Financial Tab


Affiliates – If the signature page indicates one or more affiliates, enter the name and CDFI certification status of the affiliates into this table.

Most recently completed fiscal year end date – Information for this date is on the Applicant’s Signature (cover) page.

Staff – Enter number of Full-Time Equivalents (FTE) staff. Note: This information can be found in the “Staff Allocation Table” of the Application.

Total Assets - Total asset number is located on the Applicant’s Signature (cover) page. Note: When entering the number, do not add commas or periods

Save - Click Save. Note: To start a new Intake, click the New tab on the Intake Form, and enter a new EIN number from the Search By drop-down arrow.

Review

Review Overview

Once the Application has gone through Intake, a Reviewer, assigned by the Approving Official, will review the application and attached documentation. (Assignments for CDFI Application’s Intake and Review are made by the CDFI Approving Official, and are primarily based on a Reviewers existing workload.)

There are two forms used in the Application review process:

Certification Review Database (CRD)

The Certification Review Database (CRD) on the CDFI Intranet is the first of two forms used in the application review process. With this form, the certification application coordinator confirms that the key pieces of Applicant information have been included in the CRD. (Some information – including the application, or control, number – has already been pre-populated from the Intake Form.)

When the review process is complete, the applicant letter coordinator will return to the CRD and update it with criteria eligibility results, notes, comments, communications with the Applicant, target markets, and the final certification determination.

Sample CRD Form (Figure 1)


Certification Substantive Review Form (CSR)

Once the relevant information has been entered in the Review Database, the application is ready for review. The Reviewer uses the Certification Substantive Review (CSR) form to actually review the CDFI Application. By the time the Reviewer has concluded his assessment, the CSR form will contain all the information and analysis the Approving Official needs to evaluate the Reviewer’s recommendation and to render a final certification decision. Reviewer responses on the CSR form are thorough and analytical, and support the evaluation of each certification criteria and final recommendation.

Sample CSR Form (Figure 2)

New Application Review Steps

1. Assignment (2 days)

a. Approving Official assigns a new application to a Reviewer, a Team Leader, and a due date (based on Reviewer workload).

b. The certification application coordinator (CAC) updates the CDFI Certification Tracking report to reflect the assignment.

c. The CAC opens the electronic Certification Review Database (CRD) located in CDFI Systems > Certification & Training > CDFI Certification System > Review (Figure 1), and enters the Reviewer assignment and the date of the assignment.

2. Review (20 days)

a. Analysis – The Reviewer will read the application, and using the Reviewer Guidance document, perform the necessary analysis to evaluate and determine whether or not the


Applicant meets the certification criteria requirements.

b. Communication with the Applicant – If the Reviewer finds that there is information missing from the Application, or that there are items in the Application that require clarification, the Reviewer will contact the Applicant by phone with a follow-up email to obtain that information. The following timeline guidelines are used when communicating with an Applicant:

1. Reviewer typically gives the Applicant 5 days, which begin when the Applicant has acknowledged the request, to provide information

2. If needed, the review period may be extended an additional 3 days. The Reviewer should not spend more than 8 business days (consecutive or non-consecutive) communicating with the Applicant during a review. If the Applicant is unable to provide the requested information within the 8 business day time frame, the Reviewer will complete the review with whatever information has been obtained at that point.

c. Write-up and Recommendation: Using the CSR Form (Figure 2) at: J drive > Certification & Training > CDFI Certification > Working Cert. Review Folder > CSR Form Final, the Reviewer will document his/her analysis and make a recommendation to certify or not to certify the Applicant.

d. Submission: The Reviewer submits the completed CSR Form, the desk copy of the application, and copies of any additional information or documentation, to the Team Leader (TL). The TL reviews the CSR form for completeness and accuracy; the TL may return the CSR form to the Reviewer for further analysis or edits. Once the TL is satisfied, the TL submits the CSR form to the Approving Official.

3. Decision (10 days)

a. Approving Official (AO) reviews the CSR and either certifies or declines to certify the Applicant. Additionally, the AO may return the CSR to the Reviewer for further analysis or edits prior to rendering a final decision.

b. Once a final decision is made, the AO provides the CSR package to the Decision Letter Coordinator (DLC).

4. Notification (10 days)

a. The DLC prepares the decision letter.

b. The TL reviews the decision letter, and makes updates to the CDFI Certification Tracking Report.

c. The DLC emails the decision letter to the Applicant.

d. The DLC makes the necessary updates to the CDFI Certification Systems Database.

e. The DLC sends the CSR any additional information gathered by the Reviewer and used in the review process, along with a copy of the decision letter, to Records Management for inclusion


in the Application Master File.

f. If the decision is to decline the Application for CDFI Certification, as a courtesy, the AO or TL will contact the Applicant prior to transmission of the decision letter to personally let them know of the decision. This call is not a debriefing. If the Applicant wishes to discuss the details of the declined application and decision letter, they must request a debriefing.

5. Debriefing (1 day)

a. A declined Applicant may request a debriefing to better understand why it did not meet all the CDFI Certification criteria.

b. The TL will arrange a conference call with the Applicant, Reviewer, TL, and if necessary, the AO.

6. Reapplication (180 days)

a. The Applicant has up to six months to re-apply under the existing, but declined application.

b. The Applicant must provide the required information for the certification criteria that were not passed in the review of the Applicant’s initial application.

c. The review process for a Reapplication is the same as for a new application. The Applicant may make only one re-application per new certification application.

Timeline

Timeline Overview

Decisions on new CDFI applications from soup to nuts will be made within 90 calendar days of an application submission. Although the actual decision process may take less time, as the 90 day allowance takes into consideration Reviewer workload, normal delays in communication, vacations and holidays, and other unavoidable circumstances.

Timeline Table

No. of Days to Process 2 2 2 2 20 10 10 1 180

Application Receipt Certification Systems Initial Data EntryCDFI Certification Tracking Report UpdateAssignmentReviewDecisionNotificationDebriefing Re-application


Material Events

Overview

A “Material Event” is an occurrence that effects an organization’s strategic direction, mission, or business operation and, thereby, its status as a certified Community Development Financial Institution (CDFI), and/or its compliance with the terms and conditions of an assistance agreement.

Whenever a CDFI experiences a Material Event, they are required to fill out a brief form, within 30-days of the occurrence, with the date of the event, and an explanation of the event. Also within that form is a caveat that the outcome of the Material Event may affect the certification status of the CDFI.

Decertification

During the three-year certification term, phone or on-site reviews of CDFIs may be made by the Fund to ensure that all Material Events that may have occurred were documented and approved.


Examples of Material Events

The list below provides examples of Material Events that should be reported to the CDFI Fund.

A merger, acquisition, or consolidation with another entity.

Changes in the organization’s legal status.

Events that change one or more of the seven certification criteria. For example, an organization no longer provides Financial Products or Development Services.

Changes in the organization’s balance sheet composition such that Financial Products no longer represent 50% or more of its total assets.

Changes in the organization’s tax and/or corporate structure (e.g., changing from for-profit to non-profit status).

Events that result in a change in control of the organization (e.g., control by, controlling relationships, loss of control - as such term is defined in the assistance agreement - by any entity that is a party thereto).

Organizations becoming a government entity or controlled by a government entity.

Previously certified Target Markets are now less than 60% of the organization’s annual activities.

Changes in the composition of the organization’s Board of Directors (or other governing body) such that the percentage of the governing or advisory board members representing the organization’s Target Market is diminished or altered.

Relocation of the organization’s primary office to another state which alters the organization’s ability to serve or be accountable to its Target Market.

Any other event determined by the CDFI Fund, in its sole discretion, to constitute a Material Event.

Intake

Intake Overview

Certification of Material Event forms are submitted during any time of the year. CDFI Fund staff will review any reported Material Events to determine whether the organization continues to meet the certification requirements for CDFI’s. An organization may be required to submit additional or clarifying information to assist the Fund in making a final determination.


Intake Steps

1. Certification of Material Event Form Receipt: Certification of Material Event Forms are faxed to the CDFI Fund main fax line. The Mail Clerk will make two copies of the submitted Certification of Material Events Form and deliver one copy to Records Management for inclusion in the CDFI Certification Master file, and deliver one copy to the CAC. (2 days)

2. CDFI Certification Tracking Report Update: The certification application coordinator logs the Certification of Material Event Form into the CDFI Certification Tracking Report spreadsheet located on the J drive > Certification & Training > CDFI Certification > CDFI Certification Tracking Reports. The certification application coordinator then places Certification of Material Event Forms in the certification file cabinet. (2 days)

Review

Material Event Review Overview

Only those Certification of Material Event Forms for which the CDFI has indicated that a material event has occurred need to be reviewed. Depending on the details of the specific materials events, a review of a Certification of Material Event form may require the review of only one certification criteria or up to all of the certification criteria. It may also be determined that a reported Material Event does not qualify as a Material Event and does not require a review.

Material Event Review Steps


a. Approving Official assigns a Certification of Material Event Form to a Reviewer, a Team Leader, and a due date (based on Reviewer workload).

b. The CAC updates the CDFI Certification Tracking report to reflect the assignment.

2. Review (30 days)

a. Analysis – The Reviewer will read the Certification of Material Event Form and using the Reviewer Guidance document, perform the necessary analysis to evaluate and determine whether or not the CDFI continues to meet the certification criteria requirements.

b. Communication with the Applicant – If the Reviewer finds that there is information missing or that there are items that require clarification, the Reviewer will contact the CDFI by phone with a follow-up email to obtain that information. The following timeline guidelines are used when communicating with a CDFI.

1. Reviewer typically gives the CDFI 5 days, which begin when the CDFI has acknowledged the request, to provide information.


2. If more information is needed, a review extension of up to 10 days is permitted.

The Reviewer should not spend more than 15 business days (consecutive or non-consecutive) communicating with the CDFI during a review. If the CDFI is unable to provide the requested information within the 15 business day time frame, the Reviewer will complete the review with whatever information has been obtained at that point.

c. Write up and Recommendation: Using the CSR Form (Figure 2) at: J drive > Certification & Training > CDFI Certification > Working Cert. Review Folder > CSR Form Final, the Reviewer will document his/her analysis and make a recommendation to continue to certify or to decertify the CDFI.

d. Submission: The Reviewer submits the completed CSR Form, the desk copy of the Certification of Material Event form, and copies of any additional information or documentation, to the Team Leader (TL). The TL reviews the CSR form for completeness and accuracy, and may return the CSR form to the Reviewer for further analysis or edits. Once the TL is satisfied, the TL submits the CSR form to the Approving Official. Note: The Reviewer may discuss their recommendations with the Team Leader prior to submission.


a. Approving Official (AO) reviews the CSR and either continues to certify or decertifies the CDFI. Additionally, the AO may return the CSR to the Reviewer for further analysis or edits prior to rendering a final decision.

b. Once a final decision is rendered, the AO provides the CSR package to the TL. TL makes any necessary updates to the CDFI Certification Tracking Report.

c. The TL provides the CSR package to the Decision Letter Coordinator (DLC).


a. If the decision is to continue to certify the CDFI, no notification is made, and the DLC sends the CSR, and any additionally information gathered by the Reviewer and used in the review process, to Records Management for inclusion in the Application Master File. Additionally, the DLC makes any necessary updates to the CDFI Certification Systems Database.

b. If the decision is to decertify, the Decertification process is triggered, (see the Decertification section).

Timeline

Timeline Overview

Material Events should be reported to the CDFI Fund within thirty (30) days of occurrence. Additionally, any certified CDFI that plans to submit a Financial Assistance (FA) Component or Technical Assistance (TA) Component application is required to certify its Material Event status by the deadline outlined in the applicable Notice of Funds Availability (NOFA).


Timeline Table

No. of Days to Process 2 2 2 30 10 10

Certification of Material Event Form ReceiptCDFI Certification Tracking Report UpdateAssignment Review Decision Notification


Recertification

Overview

Recertification is the process of demonstrating continued adherence to the CDFI Certification criteria after the three-year term has expired. Recertification ensures that organizations can continue to be eligible to apply for or receive financial and technical services for their underserved populations and communities. Each recertification also has a three-year term, which means that every three years organizations must recertify their CDFI status for continued funds eligibility.

Intake

Intake Overview

In January and July of each year, the CDFI Fund will send CDFIs a letter notifying them that their eligibility will expire within the next six-month period. For example: a January 2010 notification will be sent to CDFIs due to expire from July, through December of 2010. A July 2010 letter will cover the CDFIs expiring January, through June of the following year.

This gives each applicant ample time to research and resubmit documentation needed for recertification. To ensure that there is no gap in an institution’s certification status, a CDFI Recertification application must be submitted at least 90 days prior to the certification expiration date. For example, if the certification expires on October 1, 2009, the CDFI should submit Recertification materials by July 1, 2009.

Intake Steps

1. Recertification Materials Receipt: Recertification Materials (original and a copy) arrive at the CDFI Fund and are opened and date stamped by the Mail Clerk who then delivers the 2 copies to the certification application coordinator. (2 days)

2. CDFI Certification Tracking Report Update: The certification application coordinator logs the Recertification Materials into the CDFI Certification Tracking Report spreadsheet located on the J drive > Certification & Training > CDFI Certification > CDFI Certification Tracking Reports. The certification application coordinator then places Recertification Materials in the certification file cabinet. (2 days)


Review

Recertification Review Overview

Although Recertification applicants are required to submit new application materials, the only information that is automatically required is the Financing Entity and Target Market criteria. For the remaining criteria - Legal Entity, Primary Mission, Development Services, Accountability, and Non-Government Entity - applicants may attest that the information submitted with the Applicant’s previous application has not changed. However, if the information for any of those criteria has changed, the applicant will be required to submit new information for review.

Recertification Review Steps


a. Approving Official assigns a Recertification to a Reviewer, a Team Leader, and a due date (based on Reviewer workload).

b. The Certification Application Coordinator (CAC) updates the CDFI Certification Tracking report to reflect the assignment.

2. Review (30 days)

a. Analysis – The Reviewer will read the Recertification Materials and using the Reviewer Guidance, perform the necessary analysis to evaluate and determine whether or not the CDFI continues to meet the certification criteria requirements.

b. Communication with the Applicant – If the Reviewer finds that there is information missing from the Recertification materials, or that there are items that require clarification, the Reviewer will contact the CDFI by phone with a follow-up email to obtain that information. The following timeline guidelines are used when communicating with a CDFI:

1. Reviewer typically gives the CDFI 5 days to provide information, which begin when the CDFI has acknowledged the request,

2. If needed, the review period may be extended an additional 10 days. The Reviewer should not spend more than 15 business days (consecutive or non-consecutive) communicating with the CDFI during a review. If the CDFI is unable to provide the requested information within the 15 business day time frame, the Reviewer will complete the review with whatever information has been obtained at that point.

c. Write up and Recommendation: Using the CSR Form (Figure 2) at: J drive > Certification & Training > CDFI Certification > Working Cert. Review Folder > CSR Form Final, the Reviewer will document his/her analysis and make a recommendation to continue to certify or


to decertify the CDFI.

d. Submission: The Reviewer submits the completed CSR Form, the desk copy of the Recertification Materials, and copies of any additional information or documentation, to the Team Leader (TL). The TL reviews the CSR form for completeness and accuracy, and may return the CSR form to the Reviewer for further analysis or edits. Once the TL is satisfied, the TL submits the CSR form to the Approving Official. Note: The Reviewer may discuss their recommendations with the Team Leader prior to submission.


a. Approving Official (AO) reviews the CSR and either continues to certify or decertifies the CDFI. Additionally, the AO may return the CSR to the Reviewer for further analysis or edits prior to rendering a final decision.

b. Once a final decision has been made, the AO provides the CSR package to the Decision Letter Coordinator (DLC).




c. The DLC emails the decision letter to the CDFI.


e. The DLC sends the CSR, any additionally information gathered by the Reviewer and used in the review process, and a copy of the decision letter, to Records Management for inclusion in the Application Master File.

f. If the decision is to decertify the CDFI, prior to transmission of the decision letter, either the AO or TL will contact the CDFI to let them know the decision personally.


a. A decertified CDFI may request a debriefing to better understand why it did not meet all the CDFI Certification criteria.



Timeline

Timeline Overview

Reminder: The following Timeline represents the number of business days it takes to process each task that is enumerated in the preceding Review Steps. For example: It will take up to 30 business days to complete a Review of the Recertification Application.

Timeline Table

No. of Days to Process 2 2 2 30 10 10 1

Recertification Materials ReceiptCDFI Certification Tracking Report UpdateAssignmentReviewDecisionNotification Debriefing


Decertification

Overview

The CDFI Fund may decertify a CDFI at any time if the CDFI Fund finds that the certified CDFI no longer meets the required CDFI Certification criteria. However, in general, if the CDFI Fund deems the situation correctable within a given time period, it may allow, in its sole discretion, the certified CDFI a “cure period” of no more than six months to correct the situation. If, by the end of the “cure period,” the certified CDFI is unable to demonstrate that it meets all of the required CDFI certification criteria, it will be decertified.It is rare to decertify a CDFI, but occasionally a situation warrants it. The following are possible reasons why a CDFI would be decertified:

On-site inspection by Compliance Review Team results in information that may affect the status of a CDFI.

CDFI no longer meets certification requirements. Failed recertification. Primary mission of the CDFI has changed. CDFI is no longer in existence.

Intake

Intake Overview

After it is determined that a CDFI is not meeting one or more of the CDFI Certification criteria, (resulting from a Recertification review or a Certification of Material Event form review, or otherwise), the AO reviews the relevant materials and determines whether or not to allow a “cure period” for the CDFI. A “cure period” is the time – up to 6 months - given to CDFIs to complete the organizational or documentation requirements needed to maintain certification and return to the recertification process. This “cure period” decision is made on a case-by-case basis.

Intake Steps

1. Notification: The DLC will prepare a letter from the AO, indicating that the CDFI is either being decertified and why, or that the CDFI will be decertified unless it can meet all of the Certification criteria by the end of a specified “cure period”. The letter will instruct the CDFI as to what information it must submit to the CDFI Fund and by when it must make such submission. (up to 180 days)

2. Decertification Materials Receipt: Decertification Materials (original and a copy) arrive at the CDFI Fund and are opened and date stamped by the Mail Clerk who then delivers the 2 copies to the certification application coordinator. (2 days)

3. CDFI Certification Tracking Report Update: The certification application coordinator logs the Recertification Materials into the CDFI Certification Tracking Report spreadsheet located on the J drive > Certification & Training > CDFI Certification > CDFI Certification Tracking Reports. The


certification application coordinator then places Decertification Materials in the certification file cabinet. (2 days)

Review

Decertification Review Overview

Decertification is the result of a Certification of Material Event or Recertification review, which finds that a CDFI no longer meets one or more of the CDFI Certification criteria.

Decertification Review Steps

1. 1. Assignment (2 days)

a. Approving Official assigns a Decertification to a Reviewer, a Team Leader, and a due date (based on Reviewer workload).

b. The Certification Application Coordinator (CAC) updates the CDFI Certification Tracking report to reflect the assignment.

2. Review (30 days)

a. Analysis – the Reviewer will read the Decertification Materials and using the Reviewer Guidance, perform the necessary analysis to evaluate and determine whether or not the CDFI continues to meet the certification criteria requirements.

c. Communication with the Applicant – If the Reviewer finds that there is information missing from the Decertification materials, or that there are items that require clarification, the Reviewer will contact the CDFI by phone with a follow-up email to obtain that information. The following timeline guidelines are used when communicating with a CDFI:


2. If needed, the review period may be extended by up to 10 additional days.

The Reviewer should not spend more than 15 business days (consecutive or non-consecutive) communicating with the CDFI during a review. If the CDFI is unable to provide the requested information within the 15 business day time frame, the Reviewer will complete the review with whatever information has been obtained at that point.

b. Write up and Recommendation: Using the CSR Form (Figure 2) at: J drive > Certification & Training > CDFI Certification > Working Cert. Review Folder > CSR Form Final, the Reviewer will document his/her analysis and make a recommendation to continue to certify or to decertify the CDFI.


c. Submission: The Reviewer submits the completed CSR Form, the desk copy of the Decertification Materials, and copies of any additional information or documentation, to the Team Leader (TL). The TL reviews the CSR form for completeness and accuracy, and may return the CSR form to the Reviewer for further analysis or edits. Once the TL is satisfied, the TL submits the CSR form to the Approving Official. Note: The Reviewer may discuss their recommendations with the Team Leader prior to submission.


a. Approving Official (AO) reviews the CSR and either certifies or declines to certify the Applicant. Additionally, the AO may return the CSR to the Reviewer for further analysis or edits prior to rendering a final decision.

b. Once a final decision has been made, the AO provides the CSR package to the Decision Letter Coordinator (DLC).







f. If the decision is to decertify the CDFI, prior to transmission of the decision letter, either the AO or TL will, as a courtesy, contact the CDFI to let them know the decision personally. This call is not a debriefing. If the Applicant wishes to discuss the details of the declined application and decision letter, they must request a debriefing.


a. A decertified CDFI may request a debriefing to better understand why it did not meet all the CDFI Certification criteria.



Timeline

Timeline Overview

A “cure period” is the time – up to 6 months - given to CDFIs to complete the organizational or documentation requirements needed to maintain certification and return to the recertification process. This “cure period” decision is made on a case-by-case basis.

Timeline Table


No. of Days to Process 180 2 2 2 30 10 10 1

Notification Decertification Materials ReceiptCDFI Certification Tracking Report UpdateAssignmentReview DecisionNotification Debriefing

Target Market Modification Requests

Overview

To be a CDFI, an entity must serve at least one eligible Target Market, which include: Investment Area , Targeted Population, or Other Targeted Population. Within those Target Markets, a CDFI must demonstrate that it is actively engaged in providing products and services, and is accountable to their Target Markets. A certified CDFI must direct at least 60% of its activities to its certified Target Market(s). Thus if the activities directed to the certified Target Market of a certified CDFI fall below 60%, that CDFI must request a modification of its certified Target Market(s) or face decertification.

Note: For detailed information regarding the Target Market mapping, please see “Designating a Target Market In myCDFIFund,” located on cdfi.gov > What we Do > Supplemental Resources > Designating a Target Market in myCDFIFund.

Intake

Intake Overview

Target Market Modifications are submitted during any time of the year.

Intake Steps

1. Target Market Modification Request Receipt: Target Market Modification Requests are submitted via the CDFI Certification Signature Page process through the myCDFI Fund System, and a hard copy of the Signature Page is submitted via the regular postal mail. The hardcopy Signature Page is received and date-stamped by a mail clerk who delivers it to the certification application coordinator, and makes one copy for the Records Management department for inclusion in the Certification Master Files. (2 days)

2. CDFI Certification Tracking Report Update: The certification application coordinator logs the Target Market Modification Request into the CDFI Certification Tracking Report spreadsheet located on the J drive > Certification & Training > CDFI Certification > CDFI Certification Tracking Reports. The certification application coordinator then places Target Market Modification Requests in the certification file cabinet. (2 days)

Review

Target Market Review Overview

The CDFI Fund designates two types of Target Markets:


1. Investment Area – If the Applicant designates an Investment Area as its target Market, it’s required to submit a narrative that describes the unmet needs for credit within the designated Investment Areas. An Applicant may designate one or more Investment Areas. However, if the geographic units are not contiguous, they are considered separate Investment Areas, (except on a Statewide basis).

2. Targeted Population

a. Low-Income Target Population (LITP) - In designating a Target Market for these criteria, the Applicant must identify specific metropolitan, county, and/or state geographies.

b. Other Targeted Populations (OTP) - For OTPs, a narrative must adequately describe the unmet needs if the OTPs include Asian Americans, women, Other Pacific Islanders, or Other.

The following procedures are followed by existing applicants requesting a modification to their certified Target Market:

Electronically designate the organization’s Target Market in its individual “myCDFIFund” account.

Complete and attach the Target Market and Accountability Tables. (This step only applies to a certified CDFI that chooses to amend/expand its current, approved Target Market.)

Complete and submit the CDFI Certification Signature Page according to the instructions provided.

Target Market Review Steps


a. Approving Official assigns a Target Market Modification Request to a Reviewer, a Team Leader, and a due date (based on Reviewer workload).

b. The CAC updates the CDFI Certification Tracking report to reflect the assignment.

2. Review (30 days)

a. Analysis – the Reviewer will download the electronic materials from the myCDFI Fund and read the Target Market Modification Request and using the Reviewer Guidance, perform the necessary analysis to evaluate and determine whether or not the CDFI can be certified for the requested Target Market.

d. Communication with the Applicant –If the Reviewer finds that there is information missing from the Target market materials, or that there are items that require clarification, the Reviewer will contact the CDFI by phone with a follow-up email to obtain that information. The following timeline guidelines are used when communicating with a CDFI:



2. If needed, the review period may be extended up to 10 additional days.

The Reviewer should not spend more than 15 business days (consecutive or non-consecutive) communicating with the CDFI during a review. If the CDFI is unable to provide the requested information within the 15 business day time frame, the Reviewer will complete the review with whatever information has been obtained at that point

b. Write up and Recommendation: Using the CSR Form (Figure 2) at: J drive > Certification & Training > CDFI Certification > Working Cert. Review Folder > CSR Form Final, the Reviewer will document his/her analysis and make a recommendation to certify or not to certify the CDFI for the requested Target Market.

c. Submission: The Reviewer submits completed the CSR Form, the desk copy of the Target Market Modification Request and copies of any additional information or documentation, to the Team Leader (TL). The TL reviews the CSR form for completeness and accuracy, and may return the CSR form to the Reviewer for further analysis or edits. Once the TL is satisfied, the TL submits the CSR form to the Approving Official. Note: The Reviewer may discuss their recommendations with the Team Leader prior to submission.


a. Approving Official (AO) reviews the CSR and either certifies or declines to certify the CDFI for the Target Market modification. Additionally, the AO may return the CSR to the Reviewer for further analysis or edits prior to rendering a final decision.

b. Once a final decision is rendered, the AO provides the CSR package to the TL. TL makes any necessary updates to the CDFI Certification Tracking Report.

c. The TL provides the CSR package to the Decision Letter Coordinator (DLC).







f. If the decision is to not modify the CDFI’s Target Market, prior to transmission of the decision letter, either the AO or TL will contact the CDFI to let them know the decision personally.


This call is not a debriefing. If the Applicant wishes to discuss the details of the declined Target Market Modification Request and decision letter, they must request a debriefing.



a. A CDFI that does not have its Target Market Modification approved may request a debriefing to better understand why its proposed Target Market did not meet the CDFI Certification criteria.

b. The TL will arrange a conference call with the CDFI, Reviewer, TL, and if necessary, the AO.

Timeline

Timeline Overview

Although the complete decision process is measured in days, they are not necessarily consecutive days. That time may be spread out over several weeks or months depending on Reviewer workload, normal delays in communication, additional documentation requests, and other factors.

Timeline Table

No. of Days to Process 2 2 2 30 10 10 1

Target Market Modification Request ReceiptCDFI Certification Tracking Report UpdateAssignmentReviewDecisionNotification Debriefing


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