The Consolidated Appropriations Act, 2021, signed into law on December 27, 2020, added Section 104A of the Community Development Banking and Financial Institutions Act of 1994 (the âActâ). Section 104A authorizes the Secretary of the Treasury to establish the Emergency Capital Investment Program (âECIPâ or the âProgramâ) to support the efforts of low- and moderate-income community financial 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, including persistent poverty counties, that may be disproportionately impacted by the economic effects of the COVID-19 pandemic by providing direct and indirect capital investments in low-and moderate-income community financial institutions.
Treasury seeks approval for an application form and associated documents which are necessary to open a small second round of funding and to close investments. The Act appropriated $9 billion in funding for the Program, for Treasury to make investments to the greatest extent possible, less administrative expenses, during the national emergency related to the COVID-19 pandemic. Treasury opened an initial application round in March 2021, with an application deadline of September 1, 2021. Treasury made decisions on the submitted applications in December 2021 and closed and funded approximately $8.34 billion in investments between April and November 2022 out of a total of $8.73 billion in total planned investments. Some approved applicants chose not to accept an investment, and others chose to accept less than they were offered. As a result, Treasury now has up to approximately $350 million in remaining funding, pending some additional anticipated closings. The Program has determined to open a small second round of applications to disburse this remaining funding amount. Treasury views it essential to the Treasury mission to invest the remaining ECIP funding authority as quickly as possible and to the maximum amount authorized, to provide support to communities disproportionately impacted by COVID-19
Under the Act, Treasuryâs authority to make new investments under the Program terminates âon the date that is 6 months after the date on which the national emergency concerning the novel coronavirus disease (COVIDâ19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates.â 12 U.S.C. § 4703a(j)(1). In order to complete a second round, Treasury will need to: (i) open the application process and provide potential applicants with sufficient time to apply; (ii) review and make decisions on the submitted applications, including consulting with the federal banking regulators and NCUA as required under the Act; (iii) notify applicants about Treasuryâs determinations; (iv) prepare for closing, including providing applicants with sufficient time to prepare all the relevant documentation; and (v) close and fund the investments. As noted, for the initial round, it took approximately eight months between the application deadline and the completion of the majority of closings. Treasury understands that discussions are ongoing regarding the termination of the COVID-19 national emergency. Given the length of time required to complete a second round, any delay in opening a second round might jeopardize the Programâs ability to disburse the remaining funds prior to the expiration of Treasuryâs investment authority. This would result in up to $350 million in taxpayer funding being uninvested, resulting in a significant opportunity cost for the financial institutions who could receive this funding and the underserved communities that could benefit. Thus, public harm is reasonably likely to result from compliance with the normal clearance procedures, which would delay the opening of a second round.
Treasury now has up to approximately $350 million in remaining funding, pending some additional anticipated closings. The Program has determined to open a small second round of applications to disburse this remaining funding amount. Treasury views it essential to the Treasury mission to invest the remaining ECIP funding authority as quickly as possible and to the maximum amount authorized, to provide support to communities disproportionately impacted by COVID-19
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State Regulatory Response Form
ECIP Waterfall Approach for ECIP.pptx
ECIP Emergency Justification Memo 11.21.22.docx
ECIP Emergency PRA Approval Justification Memo - Letter Agreements.pdf
ECIP State Regulatory Response Form