WASHINGTON (3/12/13)--The Community Development Financial Institutions (CDFI) Fund continues to develop its bond guarantee program, and has released a powerpoint presentation to educate credit unions and other CDFI Fund participants on the program before it is implemented.
Under the CDFI Fund bond program, notes or bonds of up to 30 years duration issued by CDFIs would have full guarantees from the U.S. Treasury. The bond program, which is still being developed, would support CDFI lending and investment by providing a source of long-term, patient capital to CDFIs, the CDFI Fund said. The bond guarantee program was enacted by the Small Business Jobs Act of 2010.
The bond program development is currently in the interim final rule stage. Comments on the interim final rule will be accepted until April 8.
The 85-page powerpoint presentation is identical to the document released at a series of February information sessions. The CDFI Fund said the document includes:
- An introduction to the program's secondary loan requirements;
- An overview of the CDFI Bond Guarantee Program's Interim Rule and financial structure;
- Information on financial structure terms, requirements and timing, and risk assessments with respect to a bond issuance; and
- Details on repayment and relending terms.
The CDFI Fund also plans to post transcripts of its information sessions, clarify elements of the rule through frequently-asked-question documents, and release webisodes to detail "more complex components" of the bond guarantee program. Additional workshops on the program are being planned.
The Credit Union National Association has recommended that credit unions that are designated CDFIs be eligible for guarantees on notes that could be used as secondary capital. CUNA added that credit unions should be allowed to count any proceeds from these bonds as supplemental capital.
For the CDFI Fund release, use the resource link.