00:01:21:21 - 00:01:54:03 Speaker 1 So it's a minute after. So we've got some introductory slides to do. So I'm going to have us go ahead and get started because I suspect there will be questions and we're going to answer as best we can based upon what you're going to see is our theme. So, Tanya, why don't you hit the next slide and we'll we'll we'll get started. 00:01:54:05 - 00:02:37:17 Speaker 1 So joining me today, I'm Mike Bell and the chief experience officer for SIU Strategic Planning, Stacy Augustine, the CEO of SIU Strategic Planning is here. Kristine Duncan, VP of Compliance is here. Shirley Sin has also joined us. So you've got a lot of of our good experience here and on board. A couple of things. Just as housekeeping notes, please do use the Q&A feature and we will try to answer all of those questions as we go. 00:02:37:19 - 00:03:04:02 Speaker 1 There may be things that we're we're getting to towards the end. So we may we may defer till we get to them. Don't hesitate to put those in. Also, we are recording this webinar and so we'll have it available for you to pass around to others that may be interested in it and will, we'll be able to send you the link to that. 00:03:04:02 - 00:03:35:20 Speaker 1 So I don't know whether we'll have that in the Q&A or not, but we'll be sure to get that to you. So welcome, Stacy. Welcome, Christine. Glad to have smart people here. So let's keep going. Tanya. So who are we at SIU? Strategic planning. We do it all from the beginning to the completion certifications. How your credit union qualifies as CDF II. 00:03:35:22 - 00:04:13:24 Speaker 1 We are on top of all the upcoming rules that we are seeing slowly head towards the end of the pause. We will be ready to help every credit union with recertification, as that's may or may not be necessary. But we also are very involved in doing many of your annual certification reports, and I recommend that we do them because then they are the foundation for the work that we do in the grant writing and submission stage. 00:04:14:01 - 00:04:46:19 Speaker 1 Our staff is is doing those correctly and by a full time trained staff that is our our employees, they're not farmed out to somewhere else, you know, grant submissions many of you one through us writing these ERP is we have the best track record in the business. And then I think most importantly, and that's part of why you're here is this grant reporting how you comply with all of the CDF rules. 00:04:46:19 - 00:05:28:08 Speaker 1 We are your CDF compliance department. Christine heads that up and she is always watching worry, keeping track of the dates. All of that is an ongoing part of what we do and a lot of data collection, a lot of making sure all of that is is correct and right. So this is probably going to be one of the most complex grant reporting activities we're involved in and CDF, I hasn't made it completely clear yet what the requirements are, so that's who we are. 00:05:28:08 - 00:06:07:13 Speaker 1 So keep going and we'll we'll go at this being a codify. I think that we have really come to embrace this. Being a CDF is who you are, not what you do. It is. It is a it is a place, it is your heart. It's not a department, it's not a separate product. It's not a product line. It is the sum total of accrediting and doing what it does as both a lender and, you know, a safe place to say and the products and services, development services that it offers. 00:06:07:13 - 00:06:41:00 Speaker 1 So we really believe in this next slide. So most recently and Stacy, I want to bring you into this definitely the community Development Advisory Board and their subcommittee met. They recently announced they were going to hold this meeting. Then they canceled it and then they rescheduled it. And you you couldn't speak in it. You couldn't you had to send written comments. 00:06:41:02 - 00:06:49:05 Speaker 1 Stacy, do you want to touch on some of these bullet points and maybe add some of your thoughts into them? 00:06:49:07 - 00:07:23:06 Speaker 2 Well, I think the overall thing is that we've all been waiting What's going to happen next on certifications. Our is the CDF going to consider many of the concerns out there among credit unions, among other CDF eyes, the way they had written their certification requirements were very prescriptive. They were very bright line oriented. They seem to be very focused on protecting the CDF Funds brand as CDF eyes and labeling some activities as predatory that may or may not have been predatory. 00:07:23:10 - 00:08:00:14 Speaker 2 Some perhaps worse, probably weren't, depending on your market. So we had heard some back chatter about how the CDF fund staff basically were saying that they weren't going to make any changes. They were just kind of putting a pause on it, waiting for things to cool down and not going to make changes. So we were really encouraged to see that yesterday or on Monday, Wednesday, Monday, the subcommittee made a report to the advisory board to the sort of the supervisory committee, to the CDF, so to speak. 00:08:00:14 - 00:08:24:01 Speaker 2 It's a sounding board government party and the the group accepted those recommendations. There were eight of them. I won't get into the real specifics of what they were, but I think almost all of them were good. They were really good suggestions. We're glad. We were really glad that the were accepted them as recommendations and hopefully will implement them. 00:08:24:03 - 00:08:46:20 Speaker 2 Some of them, for example, really focused on getting away from bright line standards and instead allowing for a an applicant to create by application point itself. You know, broad narrative about why perhaps it is charging a higher rate than they would like to see or something like that. So those were all really good things. But now the question is what happens next? 00:08:46:20 - 00:09:08:22 Speaker 2 And I know Mike likes to get his crystal ball out from time to time. And that's the question that we we're not sure. No timelines were given. I might guess if I got my crystal ball out that they might not want to implement these things until they have a new director or they're without a CDF by the rector right now. 00:09:08:24 - 00:09:36:07 Speaker 2 So there are a lot of unknowns right now, but they were very helpful recommendations. I think we would give all of them a thumbs up somewhere, a little bit less applicable to credit unions, but they were all very good recommendations. I think our only disappointment is that there were only eight of them, whereas there were many, many, many comments from our industry and other industries that highlighted concerns across. 00:09:36:09 - 00:10:11:23 Speaker 1 Stacy, I'm going to add, I think that you wrote an amazing letter and I think a lot of what we commented on turned up in the written report. The written report is just out today. We're we're moving our way through it. One of the things I did see in the written report is that one of the recommendations is that for credit unions, that credit union board members be given credit for the other boards that they're on that the that are representative of the target market. 00:10:12:00 - 00:10:50:15 Speaker 1 That's how a number of many, many, many of our credit unions are certified. And if that were to be considered, we would be back to about where we were before all of this started. And that would head off perhaps advisory boards for a large number of credit unions. You know, there's a there's a whole wait and see that we're going to have to see of of what's accepted and and how those those eight recommendations make their way or maybe not make their way into the final certification rule. 00:10:50:15 - 00:11:31:21 Speaker 1 But some progress definitely. I've heard some rumors that this could be more towards the end of the year than even the October November that that we've been hearing to this point. So, you know, anybody's guess is is still is still a good one. Maybe we should be doing a, you know, a lottery of everybody pick a date. But the pause certainly seems to be potentially going to be in place until late in 2023. 00:11:31:23 - 00:12:05:24 Speaker 1 All right. Let's keep moving. So I called this whole entire agenda, the ERP Netflix episode. If you're like me, I like for my program to give me all ten or 12 episodes so I can binge watch the CDF. I has certainly not been able to be accused of downloading all of the episodes. A We can say this is the slowest roll out of a program I think ever. 00:12:05:24 - 00:12:34:10 Speaker 1 The money came in 2020 at the beginning. Here it is, you know, nearly August of 2023, and we don't have award agreements. So the slow rollout you'll hear us talk about, we want you to be ready for your year award agreement. What you have gotten to date is a template. And we're going to talk about the template and what's missing, because what's missing is, you know, the old Wendy's commercial. 00:12:34:10 - 00:13:05:02 Speaker 1 Where's the beef? Well, it's not in the template, that's for sure. So we want you to be prepared for it with an implementation plan. And we're we're ready to help with that. And great reporting in place. And again, remembering your target market and remembering to focus on those census tracks, because that's the key. That's the heart of of this program. 00:13:05:05 - 00:13:31:02 Speaker 1 So we're going to be talking through the ERP, Netflix that was so ads that have been given out to date. Believe me that the exciting finale are episodes that haven't dropped yet, so we still have more. So Tanya next one. So the disclaimer I love the disclaimer and I've used some orange, you know, again, three years in the making. 00:13:31:02 - 00:14:04:21 Speaker 1 The awards were announced in April 23, and they gave themselves a June 30th deadline for the award agreements to come out. And they blew right past that and they blew right past 4th of July. And so then they decided to send you everyone was very excited. The the template and again, the where's the beef? There wasn't much so the award template disclaimers, it is provided for illustrative purposes only. 00:14:04:23 - 00:14:31:09 Speaker 1 It features boilerplate provisions and the exact terms are still to come. If if there's any way that CDF, I could drag this out and make more drama for the final episodes. They have done it. That's the disclaimer. So that's what we're working with. So if you haven't really read that template, when you do, you're you're, you're going to be disappointed. 00:14:31:09 - 00:15:00:01 Speaker 1 You're going to see some of that. We're going to walk through it today. So, Tanya, what we do know, the award agreement structure, but the actual contract looks a lot almost exact the same structure as an FAA grant. So you're not going to get an award agreement that looks absolutely different. But there are some strange things in here. 00:15:00:03 - 00:15:32:08 Speaker 1 The grant does require at least five years of reporting. There's an untangle meant of years, three and five, because there are some requirements for you to spend money and report it by those years three and five. And Christine's going to get into that a little bit later. We don't want you to sign these award agreements. Ultimately, even when they come out until you know what's required, we're going to stay watching for the deadlines to sign. 00:15:32:10 - 00:15:57:06 Speaker 1 It seems as though Cdphe is going to require you to attend their own webinar in order to be able to accept the money. Christine I don't think we've ever seen that before and again, we're going to have to be ready for what is the first year of implementation. And the big hint, the spoiler alert is it's already started. 00:15:57:06 - 00:16:24:09 Speaker 1 It started April 10th, so you'll see us remind you what that means. We don't know what year one looks like. Is that the end of 2023? Is it the end of 2024? Again, lots of lots of exciting episodes to come in the download of this. Let's keep going. What we don't know. I think this is important to every one of you. 00:16:24:11 - 00:16:56:09 Speaker 1 And Stacey, I really want you to comment here. What we don't know and what they did not give us in the template is how exactly they intend to require CDF to measure and identify loans to minority targeted populations. And Stacey, that's been a key concern for so many credit unions. They didn't we've waited for over three years for them to lay out what this is, and we didn't get it with this template right? 00:16:56:11 - 00:17:22:24 Speaker 2 No, we certainly didn't get the methodology. And Mike and I have joked that we'll probably get the methodology about a year after you're required to report it, after they've looked at how some guys are successfully already implementing it, they'll probably put out a frequently asked questions saying, Hey, here are some good ways to do it. What we do know is that the assistance agreement in several sections does double down on Section 5.6 and Section 5.15. 00:17:23:01 - 00:17:48:21 Speaker 2 Both require the collection of beneficiary demographic data data. So we know what's required and we know that it provided the appropriating language, provided an express exemption from the equal Credit Opportunity Act. But it's going to make everyone very nervous. But I can also tell you, though, is that in here I can't remember. It's in the assistance agreement or if it's in one of the frequently asked questions. 00:17:48:23 - 00:18:10:17 Speaker 2 There are some there are some methodologies hinted at for if you put the money into your allowance account or capital. So it sounds like they might be able to you might be able to use some kind of we might be able to use a formula for capital and we're trying to work it out with them. They haven't given us any guidance. 00:18:10:17 - 00:18:27:05 Speaker 2 But if you're making these loans, financial products or grants, there will need to be you will need to collect racial and ethnic data from the end borrower or grantee. 00:18:27:07 - 00:19:06:08 Speaker 1 So, Stacey, in the in the what just came out from the subcommittee, there was also a recognition that the credit unions, especially for consumer lending, have had requirements that that run up against ACA and run up against some other rules and regulations from their prudential regulator being NCUA or other state regulators. So it does seem that inside Treasury we've even had this discussion with them one on one at Treasury with ESF reporting. 00:19:06:10 - 00:19:17:08 Speaker 1 It does appear that they're slowly coming to grips with that. This is not an easy thing for credit unions to do. In particular, Would you agree? 00:19:17:10 - 00:19:47:08 Speaker 2 Yes. Yeah, I think that I think that this outside group had some credit union representatives and some people that I respect on it, and they certainly read the comments on it. They I think they processed the problems. However, I think this would turn back and say, listen, the congressional appropriation gave you an express exemption on this and we're going to require it for this grant because we have an express exemption. 00:19:47:10 - 00:20:13:08 Speaker 1 Right. Well, there's more to come in the episodes that are ahead. And this is this is one of the episodes that we are watching for closely, but we don't have that at the moment. So let's keep going. So when does this ERP start? Will Here's a you know, here's a surprise. If you haven't really already thought about it, you've had a Netflix and chill rollout. 00:20:13:09 - 00:20:37:24 Speaker 1 You're already in it. The the start date was April ten, 2023. So you don't even know the rules of how to look at the lending you're doing or other things you may be doing, but you're already in. So the first episodes apparently dropped a while ago. You're going to have to go back and look at some of those. 00:20:37:24 - 00:21:13:24 Speaker 1 But keep this in your calendar, April ten, 2023, and start to look at some of the things you've done because you're going to be able to roll forward with that date. Let's move on. So Christine, this is something unlike I've ever seen this chart. It is one that looks like the chart from the FAA grant, but it has some messiness in here with the fiscal year end date. 00:21:13:24 - 00:21:40:00 Speaker 1 And I love what I feel are the inappropriate, inappropriate use of I don't know, not commas. They're all over the place with their grammar to this, but for single audit, for financial statements and for TLR, this looks like the FAA. Right. But we don't know. Start mandates. 00:21:40:02 - 00:22:10:15 Speaker 2 That's right. So it does look like they're going off the same schedule as the FAA awards. So if you're already reporting in those awards, you'll be looking at the same deadlines. What we don't know in this and I'm sure that's going to be coming, is is what what fiscal year and they're talking about. So what year we're going to start reporting it or what what the first performance period is going to look like. 00:22:10:17 - 00:22:47:13 Speaker 1 So those dates look like they they you know, it's hard to even predict. These all have to be filled in year. The next slide gives us a little bit more, a little bit tinier, more information. So, Christine, here you go. You've got the periods of performance. And I think you and I, you've taught me this, which is the period of performance is from the announcement date, which I don't know why we couldn't. 00:22:47:13 - 00:23:06:19 Speaker 1 It just put April ten, 2023, which would have at least given a tiny bit of some of the information. But the the the end is the fiscal year end date, But we don't know whether that fiscal year end date is 2023 or 2024. 00:23:06:21 - 00:23:33:03 Speaker 2 That's right. Yeah. If they follow that how they they put together the FAA award this year, it would be 2024. So we'd be looking at what is that, 18 months? No more or less. More than that 20 months of performance before your first progress report is due. So everyone likes the sound of that gives you a little extra breathing room. 00:23:33:05 - 00:24:04:15 Speaker 2 But as they did with the RPA war, they could also be taking out a partial year in the RPA Award. They did that as an interim reporting, so it wasn't a full year. They just said, We want to know what you're up to. And I honestly think that there is a possibility that the CDF funds will be doing that with this because it has been so long since they have reported back to Congress on this particular funding round. 00:24:04:17 - 00:24:35:18 Speaker 1 I think that that hits us. We do have a question that takes us back to the the race and ethnicity questions for Michael Abernathy. And I think that, Michael, the the the reality is and Stacey, I think you'd concur, is without guidance here, I, I think I think where you're headed is, you know, potentially the the answer is yes. 00:24:35:20 - 00:25:06:08 Speaker 1 But I think that we're going to know more when the language is out and we're going to know what to what level of specificity that they're going to require this and to what level, you know, that utilizing the grant for other activities comes in and how you balance it. So there's lots of pieces to this. Stacey, you want to add to my my start to an answer here? 00:25:06:10 - 00:25:39:12 Speaker 2 So I'm kind of reading between the lines and interpreting the key background here. But if you read the assistance agreement, it says that if you're using your award in the allowance for one last category, 90% of the dollar volume of the loans used to ally is used for must be deployed in eligible geographies. So that tells me that as long as it's in eligible geographies and you have a reasonable formula to show that and it's a similar question for capital. 00:25:39:15 - 00:26:17:00 Speaker 2 It says if you put it into capital reserves, you just have to show that the financial products that that capital has supported is an eligible geography. That also tells me that can be a formula. So I think it might end up being a way to end run the requirement to collect it on individual financial products. If you put the money into your allowance account or your capital, if you are instead using the funds to actually make grants or loans, then you would have to collect race and ethnicity. 00:26:17:05 - 00:26:45:12 Speaker 2 If you're doing it for grants, though, maybe it's not such a big deal. You know, if people are getting something, if you are getting a value for something, they don't mind disclosing something like that. A lot of times if you are giving them a down payment assistance loan and you say, Hey, listen, we're required to keep reporting, collect this information as part of this grant, I don't think they're going to mind it very much as an interpretation. 00:26:45:14 - 00:27:16:07 Speaker 1 So hang in there, Michael. If there's a lot of there's a lot of the season in the Netflix show to come. So, Tanya, let's go on to the next part of this performance. And Christine, this is where, hey, they did put the April 10th in. Very excited to see at least some specificity and they've got five years of performance here. 00:27:16:09 - 00:27:45:05 Speaker 1 So but the year one of performance in the FAA, as you said, typically has been the the April 2023 through the end of 2024, which would make year to end of 2025 and year three, 2026 and year for 2027 and year five, 2028. It did I get that right? 00:27:45:07 - 00:27:50:17 Speaker 2 Yeah, it sounds like a long way away, but that. 00:27:50:19 - 00:28:33:02 Speaker 1 Will all be working from the moon by that point. But it feels like a long way off. So the period of performance that helps us look ahead to how we'll be using this. So let's hit the next slide. Stacey, this is you all You Stacey's done a lot of work here. You saw in a couple of the slides back that that the sink and go audit the 133 audit was mentioned as Stacey without going too deep would you like to give your legal put your legal hat on here for just a minute. 00:28:33:04 - 00:29:07:22 Speaker 2 The way background I've been fighting with the CBI on this for a good long while and the argument was that we it doesn't seem fair that a bank does not have to have an A1 33 audit if it receives over $750,000 in or expense more than $750,000 a year, how come a credit passed and it got caught up in the whole definition between then not understanding difference between a nonprofit and a not for profit? 00:29:07:24 - 00:29:31:18 Speaker 2 Did it apply to a credit union or didn't apply to a credit? And after after working with them on this for a number of years, we through conversations, through individual guidance, they've given individual credit unions and just through some analysis, we've pretty much come to the conclusion that the credit union does not have to have a single audit. 00:29:31:20 - 00:30:06:07 Speaker 2 You were never intended to believe that requirement was for non-regulated loan funds, which probably do need some additional oversight when they receive large chunks of federal funds. But a credit union does not because credit union is heavily regulated and naturally has oversight from many different sources. And it's annoying that we've kind of gotten some pretty and dragged into this in the past because the plan has not been has not helped us come to this conclusion and has put people through some hoops. 00:30:06:07 - 00:30:25:04 Speaker 2 They didn't have to be there, but the good news is that going forward, I think we're pretty solid on not having to have that, not having to spend your staff time doing it, not having to spend money out of the award to do it. So more money in your programs, less money in your audit function. 00:30:25:06 - 00:31:01:20 Speaker 1 We might have some some better luck with some CPA firms at this and others. I think maybe Clifton Larsen Alan might be more open to at least hearing this. There have been some other, I guess I can say, you know, Moss Adams has been a little bit difficult on on some of these issues. So, you know, it's a conversation that definitely if you're willing to have it with your your CPA auditor, we have the ability to help support you in that discussion. 00:31:01:23 - 00:31:34:03 Speaker 1 So happy to do it and save you some some coin if you if if we can. Okay. Next slide. So transaction level report, everybody loves a good transaction level report, Christine, where we're really looking at every loan and I guess maybe, you know, loans to the Eagles in particular is where you're going to be geocoding. So those are the ones that count, right? 00:31:34:05 - 00:31:58:23 Speaker 2 That's right. So that's how the CBA five fund is going to make sure we're doing what we say we're going to do through the TLR. That's where we look at all of your loans. That's that massive report. But I tell you, trust me, in the end it looks good, but it's it's codes and it will tell those five fund whether or not those loans are made to the Eagles. 00:31:59:00 - 00:32:23:17 Speaker 1 All right. I'm looking at one of the questions that came up for the FAA grant. When did we need to have a an audit? Will this be different? So the the timing to those, Christine, you want to unravel that a little bit? 00:32:23:19 - 00:32:48:03 Speaker 2 Sure. And if you're looking at a single audit, definitely speak with your CPA and they'll be able to give you sort of a timeline on on whether or not, A, they think that you need it, They will usually say yes, but I would lean into giving them all of the the literature that we've given you so that you don't. 00:32:48:05 - 00:33:08:00 Speaker 2 But it really they either do it alongside your regular, regular financial statement audit or they can do it on its own. And the CDF fund does want those to be completed and it needs to be completed by September 30th. 00:33:08:02 - 00:33:43:21 Speaker 1 Amy Cooper You know what? You are trying to skip ahead to the rest of the presentation and the exciting season of ERP on Netflix. So I'm going to hold off there and Sharon, Jessica, Sharon, sorry. We will send that document out. We will we will. I know Stacy's got a little more formalized letter that she can provide and we'll we'll get that out. 00:33:44:01 - 00:34:26:20 Speaker 1 And I'm only teasing Amy, because we've got to we've got some thoughts coming, but we'll keep going. So next slide. So the performance progress report, you know, this is is a typical been typical for FAA. It will be included in CDF. I I'm not going to go deep here. Let's go to the next slide. Tanya and Christine. This is where uses of award come up. 00:34:26:20 - 00:34:47:19 Speaker 1 And obviously that's going to be something that, you know, this year it's a little more fractured because there's lots of different ways that we can use it. And we're going to we're going to talk to those deeper, but we're not we're not losing the uses of award report, are we, Christine? 00:34:47:21 - 00:35:13:00 Speaker 2 No, no. That report is really just a these are the buckets that we use the award in. And it's a pretty clean report that has just a little bit of narrative about those buckets and how they were used in the the ERP. The real me is going to come in those performance progress reports because there's a lot more involved in the usage in those reports. 00:35:13:00 - 00:35:16:14 Speaker 2 Now we'll get into a little later. 00:35:16:16 - 00:35:54:04 Speaker 1 They do continue to say that, you know, obviously there'll be an ACR, the actors or do and the first quarter we are going to be, you know, moving ahead with making sure that that you're prepared. We do a lot of your ACR. We're going to send you the regular agreement. You know, and while also knowing that CFI can change some of this towards when they come out and talk about recertification. 00:35:54:04 - 00:36:43:09 Speaker 1 So those two things will, I think, combine and get mixed to later in the year. But for now, that stage and they did not change that language. So next slide. So see, Amy, when do you get your ERP money? It's the next exciting episode of the Netflix and Chill rollout of ERP, the series. So next slide. Yes. What they didn't tell us, this is like, you know what everybody would like to know, but there are some indicators here, Christine, when you got to spend the money now, you know what, you've won. 00:36:43:09 - 00:37:18:16 Speaker 1 So you have that piece of the puzzle then, Christine. It looks like, well, we have to do five years of reports, transaction level reports. And the others we just went through but special years coming, you know, by the year three, you've got to have used 60% of the dollars you've won. Is that my reading that right, Christine? 00:37:18:18 - 00:37:46:01 Speaker 2 That's correct. And so the the question here from for from my perspective and what we've seen in other awards is that it depends on what sort of payments they're going to be sending these awards out in. Of course, as you guys all know, there's an initial payment that's usually a portion of the award. In the past, they've required you to use 90% of that payment within the first year of having that word in first performance period. 00:37:46:03 - 00:38:14:16 Speaker 2 They don't have that language in here. But what they are saying is that in order to get additional funds, so getting up to that 60%, you do have to use 90% of that of your whatever money you have to get additional payouts. So that's going to be a fun Mensa puzzle of playing with your award until you can get up to that 60% that that year three is what they're looking at. 00:38:14:18 - 00:38:45:21 Speaker 1 So they're giving plenty of time to get this on the road and implement it with thoughtful process and performance. Year three now so if you follow me through this performance, Tier one could end in 2024 and then year two would be end of year 2025. So this would be end of 2026. You would have to have spent 60% that I do that math. 00:38:45:21 - 00:39:10:17 Speaker 1 Right. See, the whole team worries when I start adding things together, but dates on a calendar even a lawyer could do. So I think I got that. So this is where an 80 to your question. You know, you know what you've won and here you've gotten, I think, a hint towards how you're going to have to use it. 00:39:10:19 - 00:39:57:19 Speaker 1 But you know, like the the disclaimer said, until you get your specific one with your specific numbers, we're playing a little bit of guessing game here. All right. So, Tanya, let's do the next one. This even I get worried about this policy priorities and this is where the super smart people have to step in here. Stacey, Christine, the the at the end of year three and five, you know, you're looking at how the award was expanded. 00:39:57:19 - 00:40:33:01 Speaker 1 Obviously But we've got interim benchmarks and final benchmarks. And and this is only part the second half of this doctrine then is on the next slide. So there's a lot of things to look at and a lot of things to be filled out by CDF, I to even know where begin the calculations on this, correct. Christine, you going to jump in here? 00:40:33:03 - 00:40:54:06 Speaker 2 Yeah. Yes. Is the answer. Yeah. There's a lot that we don't really know until they finish filling this out and looking at it, knowing what those different policy priorities are, what what it may look like on this is that you don't have to report on your performance and tell those that you're three in your five. But that's not true. 00:40:54:06 - 00:41:05:21 Speaker 2 They're going to look for performance then as well. They're just going to give you a benchmark, those two years to have reached by that time. 00:41:05:23 - 00:41:35:22 Speaker 1 So we could see some a new term for us, interim benchmark and final benchmark in the FAA. You get, you know, benchmarks and and we have found them through the FAA is to be flexible on benchmarks. We've had criteria that couldn't meet loan goals or had other issues, and we've issued tickets and put them in the cdphe and they've made changes. 00:41:35:24 - 00:41:42:04 Speaker 1 Do we suspect that they could be flexible here as well? 00:41:42:06 - 00:42:01:16 Speaker 2 I do think that they'll be able to offer some flexibility once those come out and once the performance starts. One of the good things about the CDF, I find, is they do really like an open dialog on your performance. They want to see you succeed. They don't want to see you fail and they'll try to work with you to get you to that. 00:42:01:16 - 00:42:05:13 Speaker 2 That end points as much as they can. 00:42:05:15 - 00:42:28:19 Speaker 1 Okay, let's look at the second half of this because this is where we get down into minority individuals and businesses and even persistent poverty counties. Anything else to pull out of this pristine or spacey? We don't need numbers for sure. 00:42:28:21 - 00:42:56:16 Speaker 2 Yeah. Yeah. That's that's kind of where I've been sitting with these and sort of holding my tongue until we see those numbers come out to let people know how we can start achieving their benchmarks. And a reminder that you won't have all of you in the in your application, you chose one of these to focus on. So in your assistance agreement, we'll have all of these things that will have one of these. 00:42:56:18 - 00:43:15:05 Speaker 2 I know one of our clients had reached out to us and said, Hey, it sounds like we only have to do reporting on year three and you're not knowing how to do annual reporting like Mike and Christine are talking about this is that in year three and year five, you have some additional reporting based on these policies. The policy priority picked out and there will be only one that you picked out. 00:43:15:05 - 00:43:22:16 Speaker 2 So you'll have to have additional reporting in year three and your not just on that one policy priority. 00:43:22:18 - 00:43:44:12 Speaker 1 And with the lending, Christine, it it it's it seems important to note that the the loans that would be identified for this would be stacked around or on top of FAA and other grant awards that have been one. Is that true? 00:43:44:14 - 00:43:59:02 Speaker 2 They will be held separately for those. So you will want to they'll have their own benchmark and we will have the other benchmarks for the phase. But we can help you keep those rates as they go. 00:43:59:04 - 00:44:33:08 Speaker 1 If. Hey, Tanya, again, this is this is Stacey. To your point, it will depend on what you chose and what you may intend to choose. I mean, one of the things all of us know is that that everyone applied for $15 million. You didn't win $15 million. So setting priorities, there's discussion coming and that that we're going to talk about that in a minute. 00:44:33:08 - 00:44:59:06 Speaker 1 We got some questions here. So so Chad Beach, if we allocate funds to allowance for loan loss and meet the 90% to each will there be any goals we need to meet for the percent of loans going to be for TLR? It gets a little complicated to to answer here. I'll let the experts look through that a minute. 00:44:59:08 - 00:45:28:15 Speaker 1 I want to I'll touch on Ninas. Please define any egg. That's a that's a very good that's a very good question. So the way that you qualified for this grant was that you had done more than 30% of the number and the dollar amount of loans into special census tracts that are called the eggs. So that's what those are. 00:45:28:17 - 00:45:39:16 Speaker 1 And that's really where the seed, if I wants to see the money directed, are the a large portion of the money directed. So I get that. 00:45:39:16 - 00:45:52:09 Speaker 2 Stacey Christine wasn't it 90% that 90%. Yeah was I mean it was not just the volume of 90% of loans going to the egg. Yes. Yeah. 00:45:52:11 - 00:46:04:11 Speaker 1 So anybody want to wade into Chad's question or is that something maybe to to touch base or offline? It's a little bit specific. 00:46:04:13 - 00:46:31:22 Speaker 2 It is a little specific. I think something that I sort of note here is the while the transaction level report is as a big report for your for the for everything it it's because it's all of your loans they're just using it as a as a double check. There's no no goals related to the TLR. 00:46:31:24 - 00:47:08:00 Speaker 1 So Michael's question is, you know, this is a five year reporting period. What happens if we're midway through the year B, the ERP grant and still cannot meet new recertification? You know, I think to to stop there or start there? Is that we have been working with credit unions a long time on cure letters and solving cure letters. 00:47:08:00 - 00:48:01:11 Speaker 1 And the re certifications are going to take some work. You know, there are there are situations where credit unions with their lending when they can change, that's one factor to it. The the the connection of the boards to the target market. I, I kind of feel a little better after what I saw in the subcommittee's report. You know, I'm going to you know, the legal battle that you referenced, Michael, I think is a is a very different set of circumstances from attempting to really work through a pretty complex grant, but doing your best to do it and where you may or may not fall short. 00:48:01:13 - 00:48:53:22 Speaker 1 Our partnership is to really work to make sure that we're communicating with Kd5 and really working on, you know, if there are places that I credit in is falling short, then than we've always talked to them about those. And Cdphe has has opened that dialog. That's something that Christine was mentioning. So I think that I'm just going to leave it at this, that the the legal situation of one individual credit union I think is quite different than a credit unions attempt to to utilize the funds correctly and to report vigorously back on what you're trying to do with this grant. 00:48:54:00 - 00:49:21:20 Speaker 1 So I know you and I have talked clawback quite a bit. And I know your you know, you and I have talked about this, but I don't really see the clawback as a significant problem with the implementation of this grant. But I do want Stacy to turn to you to, you know, do you agree with me? 00:49:21:20 - 00:49:22:23 Speaker 2 Do you? I do. 00:49:23:01 - 00:49:23:09 Speaker 1 See? 00:49:23:13 - 00:49:44:21 Speaker 2 Yeah. Yeah. I had a lot of calls and I know Christine and Sharon have had a lot of calls about that because it's super scary when you see something like that out there. And what I will tell you is that our experience in working with the CDF find is they want to work with folks that have won these awards and qualified for them. 00:49:44:21 - 00:50:08:10 Speaker 2 And they want to make sure that the funds go out there to low income communities. So they are usually very cooperative within reason ability. When you see a case like this, it's not a simple clerical error. You don't see a clawback for something like that. And and I say that I mean, the credit unions under different management, it's entirely different at this point. 00:50:08:10 - 00:50:26:03 Speaker 2 But this was a it was a serious issue at the credit union. And and they they are going to take steps like that without working with you first and trying to ensure that those funds go out to the folks that they were meant to go out. They're very cooperative. 00:50:26:05 - 00:50:59:17 Speaker 1 And I always give the sense of I served on the board of DC Fair reporting, and in 2020 we experienced, like many credit unions, a downward dip of almost 10% in our lending. We could not meet our benchmarks on lending, and we submitted a ticket and we we rewrote the benchmarks. You know, that was just a piece of what had to happen. 00:50:59:20 - 00:51:32:14 Speaker 1 And I think that we will work you on a very vigilant basis to make sure that as we're maneuvering through the next five years into the late 2020s, I like saying that, you know, Mike, that we will we will not see a clawback situation. So Chris is asked a question about can you talk more about geocoding loans made through the CDF Fund going back through April ten? 00:51:32:14 - 00:51:45:03 Speaker 1 So I know, Christine, you're for year end, you're you're used to, you know, pulling all of the loans and now also sorting through them from their April date on. 00:51:45:05 - 00:52:11:16 Speaker 2 That's right. When we do the reporting for those, we do go back and retroactively go everything and make sure that they're they're showing up in the right census tracks and the correct data sets are applied to them to show whether or not they're your own or an investment area, persistent poverty county, the list goes on. There's a lot of acronyms I could throw in here. 00:52:11:18 - 00:52:13:03 Speaker 2 So. 00:52:13:05 - 00:52:41:19 Speaker 1 Gotcha. All right. So we're going to keep going in the next slide and cognizant of our time. So so this is the the priorities on increasing lending in the IRP eligible geographies. And and there will be numbers that are dropped into this as well, Christine, that we're going to have to look at. 00:52:41:21 - 00:52:50:03 Speaker 2 Yeah. Again, that we won't know what that looks like until we get those numbers drop, then. 00:52:50:05 - 00:53:30:23 Speaker 1 Gotcha. Next slide, Tanya. And so what can you spend the ERP money on? This is another future episode, but there are some specifics here. Let's look and let's let's Netflix and chill on how can you spend the money so the program activities there are six of them listed here financial products, loans, financial services which are many things credit cards to development services grants out to members or nonprofits, loan loss reserves and capital reserves. 00:53:30:23 - 00:53:52:08 Speaker 1 It doesn't look very completely different than an essay here. Then total expenditure on financial services and development services cannot exceed. And then there's a dollar amount that's going to be dropped in here. Christine, Is that a am I making this up or is that around 25% effect? 00:53:52:13 - 00:54:01:18 Speaker 2 Yeah, I'm looking at all the information in there. It does look like about 25% of your total grant award. 00:54:01:20 - 00:54:40:04 Speaker 1 Gotcha. And then inside of operational support, you know, and this is where credit unions, I don't think have spent a lot, but there are some things here training costs, travel costs for other things. And on those operational support activities, they're also going to give you a dollar amount that you can't set aside money into those other areas. This was kind of one of those big issues of making sure that, you know, they didn't go into big benefits for executives. 00:54:40:06 - 00:55:16:12 Speaker 1 I think it's a good way they worked worked around to this. So. All right, let's keep going. So, again, where can I spend this money? We may have doubled up on that slide, but let's get the next one. Where can I spend the money? It's the eligible geographies. So 90% of the award has to be spent in those ERP eligible geographies known as AEG's. 00:55:16:14 - 00:55:28:11 Speaker 1 And it does mean that 10% could fall outside. Am I reading that right? Is that right Christine? 00:55:28:13 - 00:56:00:08 Speaker 2 Yeah, it allows it for a little bit of play outside those things just in case there's some other areas of need. I would definitely aim towards other areas of need for that. Just make it not so far outside the what you're planning on for being a CDF I but but doubling down on that, they did go on to say that if you're spending that 10% outside of an e g it has to still be to essentially low income people and businesses. 00:56:00:10 - 00:56:16:09 Speaker 2 So you can't build a branch with it. I mean, it has to be for the program purposes. So it's not a it's not a as much of a cushion as you might think it is. We're still going to have to track that. 00:56:16:11 - 00:56:51:00 Speaker 1 It's Not a it's a free get out of jail, free kind of out of grant. Okay, Next slide. So how do we do ERP grant reporting? I know how. Here's the next slide and we have grant reporting proposals that should be here in your inbox. We had a lot we've had a lot of questions around, are you going to do grant reporting for this? 00:56:51:00 - 00:57:22:15 Speaker 1 The answer was always yes. A number of credit unions wanted us to to just start to roll that out. We're happy in particular that that question can come back straight to me or Christopher to see about those proposals. What we're what we know is that if we wrote your your ERP, we definitely want to be sure that that you you get in touch and that we work on this for you. 00:57:22:17 - 00:57:58:02 Speaker 1 We've shown you the complexity of it's there. We do know that there are other credit unions that one ERP that we didn't write and those credit have also started to touch base with us. So we are also reaching out to you here. So again, we're here to do this work. You know, the folks that are involved, many of you work with Christine, with Sharon, Christine's whole team, Christine's team may be growing as a result of this product. 00:57:58:04 - 00:58:17:00 Speaker 1 So we'll be there to to work on it for you. I think we've got one question I want to get on. So this is from Brandon. Are you using 2010 or 2020 census track data? Christine? You are. That's all you. 00:58:17:02 - 00:58:49:03 Speaker 2 Get. Yes. And at this time, all of the EEGs are really just ERP eligible. Geography uses what that means. More pages are in the 2010 census tracks. The iPhone has not put out a dataset with the 2020 numbers yet. I do anticipate that kind of changing horses mid-stride for them, but right now it's just 2010. 00:58:49:05 - 00:59:20:23 Speaker 1 All right, Christine answered. Let's go on to the next slide. So we always like to remind you of this booking your Cdphe award. If you don't have a dog eared copy of NCUA Letter to Credit number 2016 Dash oh one get you one. You can Google it. It was written September 19, 20 of 2016. Have it by your side. 00:59:20:23 - 01:00:13:23 Speaker 1 I'm sure your CFO does it. It really lays out how to book this. And if there are questions related to booking as we get into this, we will definitely be working with you on plans. So just remember that resources out there. Next slide. So this is really exciting and for us, and we've been working diligently on four pillars of implementation plans and this is really where surely seeing that many of you know is going to be very active and surely in our peer to share the screen she sees in. 01:00:14:00 - 01:00:19:17 Speaker 1 Let's go on to the next slide. So so Shirley can walk through this bear. We go. 01:00:19:19 - 01:00:48:12 Speaker 2 So as Mike was saying, we're really excited. We've been doing consulting all along the way with quite a few of you on a one off basis, and it's really led to the more formalized department that we're calling see results right now. And it's really an opportunity for us to help the credit union, starting with these plans and really engaging in new and a holistic process of looking at what we're talking about here. 01:00:48:12 - 01:01:19:06 Speaker 2 The four pillars, looking at all the resources that you have, whether it's multiple grants, accounting questions, or just a multitude of things to really set a basis and a foundation for for moving you along a journey map through your community development process, and then leading into looking at ways that we can help with your lending, increasing profitability, and then obviously taking an overall approach of what that looks like in community development planning. 01:01:19:08 - 01:01:44:18 Speaker 2 For the next slide, please. So the first pillar, the City of PHI Resources System, and I was mentioning, I know a lot of you have have been multiple grant winners and this ERP is somewhat unique in some of the ways that you can use those funds that are different than your FAA grant. So we want to make sure that as you're moving along this journey through using those grants, that you do it in an optimal way. 01:01:44:18 - 01:02:22:05 Speaker 2 And any questions you may have, especially as Mike was mentioning, you know, the ERP you can use to actually grant to provide grants for maybe down payment assistance for homes or cars or other uses that normally you can't do in an FAA grant or some of the other programs. So this is really an opportunity for us to sit down with those of you that may need some assistance to really say what is the optimal way that we can stay within the confines of those assistance agreements, but also ultimately use these funds to make those impacts that all of us are so diligently doing. 01:02:22:07 - 01:02:52:06 Speaker 2 And in each one of these pillars, there are going to be unique deliverables that in and of themselves can be used individually. But, you know, we're really encouraging credit unions. We've kind of built this around the needs and challenges and requests that we've heard from our credit union clients. You know, so as Mike was talking about on some of the certifications, for example, one of the foundations of the community development side is really those community development statements or those community development mission statements. 01:02:52:06 - 01:03:27:12 Speaker 2 So, you know, again, making sure that as part of what we're looking at, proposed new certification requirements, that we can keep you engaged and in compliance. And that one of the other things is we wanted to ensure that, you know, as your credit union progresses strategically with revisions and also looking at you know, whether you're changing your field of membership or moving into different kind of community expansions, but also your board of directors from the standpoint of a target market does reflect current state of compliance. 01:03:27:12 - 01:04:09:24 Speaker 2 So, you know, looking at creating board director, advisory committee and target market alignment opportunities for you to engage in those areas. Moving on to the second pillar, which looking really here is some effective lending strategies that take into consideration both your current and potential target markets or eligible markets that you might be looking to move into. And I think one of the foundations here is what we're calling a CDF lending report, and it's really an opportunity for us to look at one point in time we look at what your lending is and in the view of a bunch of different lens and get an idea of where you're at and then really taking that to 01:04:09:24 - 01:04:29:08 Speaker 2 step into and say, okay, let's look at what we're calling an opportunity gap analysis is looking at where you're at right now, where you could go to or want to go to and what what are those gaps in between that are going to help you in development of a plan to get there? And then from that, developing a lending roadmap. 01:04:29:08 - 01:05:09:23 Speaker 2 And as we know, lending isn't isolated. We have to also look at the positive side at membership growth. So this is really going to give us an opportunity to bring all of these different components into play. You know, they're moving forward in and taking into consideration your different needs and challenges. And then, you know, we really want to make sure that as a community development credit union that we're looking at the policies as well as the products that are going to help make you successful or continue to meet the needs of your target markets and community members and as we've been talking about, especially with the ERP, we're we're seeing we don't have the guidelines 01:05:09:23 - 01:05:40:18 Speaker 2 yet, but there's definitely going to be opportunities for us to enhance the way that, you know, we're delving deeper to make more impacts on the various communities that have been underrepresented in the past. The thing here is, as most of you that I've worked with, you know, I've been in the the branch strategy side and advocacy side and grant writing side, and I'm going to be able to take a lot of the experience and really parlay and bridge this over into our consulting area. 01:05:40:20 - 01:06:09:12 Speaker 2 And we're going to be also branching and building out this department with some some pretty heavy players in the market. So we'll be able to make those announcements here shortly. But we've got some really good depth and experience coming in that understand credit unions understand credit in balance sheets, lending opportunities and challenges that credit unions have experienced, you know, four, four different cycle that we've been in. 01:06:09:12 - 01:06:56:10 Speaker 2 So I'll be really excited that we're when we're building this out and really start start hitting the ground heavy with meeting all those needs that we have for you. Can you the next one, please? So then we're building into the third pillar, which is profitability enhancements and really here helping credit unions as a deliverable city by credit unions, looking at what are optimal pricing for loans and the income and and your deposits and looking at that not from just a perspective of equality where, you know, some credit unions may be offering the same rates regardless of, you know, type of credit or really taking into consideration what will make that individual borrower successful and really 01:06:56:10 - 01:07:34:16 Speaker 2 looking at these also from an equitable standpoint that benefits both the credit union and the member and the bottom line. And then the last when that fourth pillar, really the community development side as know, as far as partnership development really goes above and beyond what we really do well as credit unions, which is, you know, getting involved in in the communities we volunteer to we do sponsorships, but this is really much more in depth and really helping and leverage those community partners that are going to be strategic in helping you meet the goals that you have set along your community development journey. 01:07:34:18 - 01:08:08:07 Speaker 2 And then finally, community economic development summits and what this entails is really bringing your stakeholders to the table, whether those are nonprofits or government officials or other organizations, your faith based organizations, and really bringing everybody to the table and facilitating a an informal conversation to to allow these different players in the market to express their unique needs and working together to help meet these needs. 01:08:08:07 - 01:08:38:12 Speaker 2 And in most cases, the credit union has those solutions already. But it's really an opportunity to show the community what the credit union has to offer and integrating that into helping meet some of these challenges and problems. So we're looking at taking all four pillars training. The next slide, please. You know, the ultimate deliverable that will be back to you is developing a community development journey map and strategic plan and addressing really, you know, how do we do you get there? 01:08:38:12 - 01:08:59:13 Speaker 2 How do we get there? What resources is it going to take, Who's going to be responsible? And obviously for any of this, we want to have that that part of the plan is how do we measure success and what are those unique metrics for you to be able to identify success? So we're really excited about this. And like I said, the beginning of this is going to be with our ear piece. 01:08:59:15 - 01:09:08:20 Speaker 2 So you're going to be getting some information rolled out shortly. We look forward to working with with each and every one of you moving forward. 01:09:08:22 - 01:09:11:04 Speaker 1 Fantastic. Surely it's exciting. 01:09:11:09 - 01:09:12:16 Speaker 2 It is. 01:09:12:18 - 01:09:22:07 Speaker 1 And when you are able to unveil, I think some of the talent that's joining, it's going to be even more exciting. So we'll get to that in August. 01:09:22:07 - 01:09:26:07 Speaker 2 I guess. I'm not a spring chicken anymore, so I'm coming. 01:09:26:09 - 01:10:18:17 Speaker 1 Not at all. On my next slide, which I think is we've we've we've done it. We landed a little bit late, but we want to make sure that we answer more questions. I think the you know, obviously getting in touch with with myself or Christopher, we know that some of the next steps are the the grant reporting. Here's here's one of the things that I think we suspect is that Cdphe is going to probably be coming out quite soon with dates for its next round of webinars, which it seemingly you will be required to attend, which talk about what they're doing. 01:10:18:19 - 01:10:53:17 Speaker 1 That also means that I don't think they are doing those webinars until they have reached out and given you they're the the the award document with all these numbers filled in. Filling in those numbers is, is super important. So when does that happen? Stacy It is a crystal ball. Again, we're almost you know, we're did does that happen before the end of August. 01:10:53:19 - 01:11:05:03 Speaker 2 Who knows? I thought Christine had told me at one point that she had seen something about that webinar occurring in August that is a little bit of an indicator. 01:11:05:05 - 01:11:13:12 Speaker 1 Some rumor. Christine, your ear to the ground, do you think those are coming in? We're already at August 1st. 01:11:13:12 - 01:11:45:15 Speaker 2 So they said that the well here, they said that the webinars would be within the first two weeks of August and then but I would imagine they would include that up to about the 15th of August and then the two weeks. And then and then I would assume after that they'll roll them out. But there is that mandatory attendance, those agreements, the the webinars. 01:11:45:18 - 01:12:20:20 Speaker 1 So well I mean August is a terrible time to do this for for everyone. Kids are getting back to school. Lots of people still taking vacation. It's all over the map there. And and now that we're into August, rolling into August, it's you know, to try to give you guys at least a couple of weeks time to plan for these I think is is also part of this. 01:12:20:20 - 01:13:06:01 Speaker 1 So we'll we'll see where that comes in. But Amy, ultimately, coming back to your question is we know a set of webinars is coming. That should be, I would think, before the end of August, and that's when we will all be working. We will we intend to do another webinar once you have your award agreements and they are filled out and we're going to go through them with be able to talk about the numbers and also be able to talk about some of the guidance that's been given. 01:13:06:03 - 01:13:49:03 Speaker 1 Answering that question of whether or not they give us more information on what what data they want collected along the way of lending, of how we measure that lending to to racial minorities, to to people of color in particular, which is so important for the ERP mission. You know, Stacy, that's that that's the other piece to this is they've they've they've given us lots things to think about, but they really haven't really rolled that answer out. 01:13:49:03 - 01:14:29:03 Speaker 1 And we'll be looking for answers, obviously, on that. So from there, another maybe 4 to 6 weeks or more to, you know, look and sign, maybe that's even in a little longer period that could take us into October for all I know. So that's really where we are you know, now what what we know we've spent a good bit of time looking at this template and tried today to bring you as up to speed as the Netflix series has unfolded. 01:14:29:09 - 01:14:47:01 Speaker 1 So thank you so much for joining us. And again, don't hesitate to get in touch and we will obviously be working to get information out to you as we learn about it with the program.