Title 12, Banks and BankingRelease 119-110

§4706 Selection of Institutions

Title 12 › CHAPTER 47 — COMMUNITY DEVELOPMENT BANKING › SUBCHAPTER I — COMMUNITY DEVELOPMENT BANKING AND FINANCIAL INSTITUTIONS › § 4706

Last updated Sep 22, 2026|Official source

Summary

The Fund chooses which community development financial institutions that meet the earlier rules will get help. It looks at 14 factors to decide. These include the chance the applicant’s plan will work, the managers’ experience, how much need and economic trouble exist in the areas or groups served, how much the applicant will focus on those areas or groups, the amount and source of required matching funds and the plan to raise the rest, whether the work will expand local economic opportunity, insured status, community support and ownership, coordination with other institutions, past success serving the community, and any other appropriate factors. The Fund must also try to fund a mix of places. That mix should include applicants from metropolitan, nonmetropolitan, and rural areas.

Full Legal Text

Title 12, §4706

Banks and Banking, Source: USLM XML via OLRC

(a)Selection criteria

Except as provided in section 4712 of this title, the Fund shall, in its sole discretion, select community development financial institution applicants 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 investments, 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 factors are measured by objective criteria;

(5)the extent to which the applicant will concentrate its activities on serving its investment 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 balance of the match;

(7)the extent to which the matching funds are derived from private sources;

(8)the extent to which the proposed activities will expand economic opportunities within the investment areas or the targeted populations;

(9)whether the applicant is, or will become, an insured community development financial institution;

(10)the extent of support from the investment areas or targeted populations;

(11)the extent to which the applicant is, or will be, community-owned or community-governed;

(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 targeted 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 applicants from metropolitan, nonmetropolitan, and rural areas.

Reference

Citations & Metadata

Citation

12 U.S.C. § 4706

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110