12 U.S.C. § 4706 — Selection of institutions

Page 1736 TITLE 12—BANKS AND BANKING § 4706 (d) Limitation on distribution of assistance Assistance provided upon approval of an appli- cation under this section shall be distributed only to the community development financial institution coapplicant, and shall not be used to fund any activities carried out directly by the community partner or an affiliate or subsidiary thereof. (e) Other requirements and limitations All other requirements and limitations im- posed by this subchapter on a community devel- opment financial institution assisted under this subchapter shall apply (in the manner that the Fund determines to be appropriate) to assist- ance provided to carry out community partner- ships. The Fund may establish additional guide- lines and restrictions on the use of Federal funds to carry out community partnerships. (Pub. L. 103–325, title I, § 106, Sept. 23, 1994, 108 Stat. 2171.) § 4706. Selection of institutions (a) Selection criteria Except as provided in section 4712 of this title, the Fund shall, in its sole discretion, select com- munity development financial institution appli- cants meeting the requirements of section 4704 of this title for assistance based on— (1) the likelihood of success of the applicant in meeting the goals of its comprehensive strategic plan; (2) the experience and background of the management team; (3) the extent of need for equity invest- ments, loans, and development services within the investment areas or targeted populations; (4) the extent of economic distress within the investment areas or the extent of need within the targeted populations, as those fac- tors are measured by objective criteria; (5) the extent to which the applicant will concentrate its activities on serving its in- vestment areas or targeted populations; (6) the amount of firm commitments to meet or exceed the matching requirements and the likely success of the plan for raising the bal- ance of the match; (7) the extent to which the matching funds are derived from private sources; (8) the extent to which the proposed activi- ties will expand economic opportunities with- in the investment areas or the targeted popu- lations; (9) whether the applicant is, or will become, an insured community development financial institution; (10) the extent of support from the invest- ment areas or targeted populations; (11) the extent to which the applicant is, or will be, community-owned or community-gov- erned; (12) the extent to which the applicant will increase its resources through coordination with other institutions or participation in a secondary market; (13) in the case of an applicant with a prior history of serving investment areas or tar- geted populations, the extent of success in serving them; and (14) other factors deemed to be appropriate by the Fund. (b) Geographic diversity In selecting applicants for assistance, the Fund shall seek to fund a geographically diverse group of applicants, which shall include appli- cants from metropolitan, nonmetropolitan, and rural areas. (Pub. L. 103–325, title I, § 107, Sept. 23, 1994, 108 Stat. 2172.) § 4707. Assistance provided by Fund (a) Forms of assistance (1) In general The Fund may provide— (A) financial assistance through equity in- vestments, deposits, credit union shares, loans, and grants; and (B) technical assistance— (i) directly; (ii) through grants; or (iii) by contracting with organizations that possess expertise in community devel- opment finance, without regard to whether the organizations receive or are eligible to receive assistance under this subchapter. (2) Equity investments (A) Limitation on equity investments The Fund shall not own more than 50 per- cent of the equity of a community develop- ment financial institution and may not con- trol the operations of such institution. The Fund may hold only transferable, nonvoting equity investments in the institution. Such equity investments may provide for convert- ibility to voting stock upon transfer by the Fund. (B) Fund deemed not to control Notwithstanding any other provision of law, the Fund shall not be deemed to control a community development financial institu- tion by reason of any assistance provided under this subchapter for the purpose of any other applicable law to the extent that the Fund complies with subparagraph (A). Noth- ing in this subparagraph shall affect the ap- plication of any Federal tax law. (3) Deposits Deposits made pursuant to this section in an insured community development financial in- stitution shall not be subject to any require- ment for collateral or security. (4) Limitations on obligations Direct loan obligations may be incurred by the Fund only to the extent that appropria- tions of budget authority to cover their cost, as defined in section 661a(5) of title 2, are made in advance. (b) Uses of financial assistance (1) In general Financial assistance made available under this subchapter may be used by assisted com- munity development financial institutions to serve investment areas or targeted popu- lations by developing or supporting—