Updated RLF Regulations Implementation of RLF Risk Analysis System - - PowerPoint PPT Presentation

▶
updated rlf regulations
SMART_READER_LITE
LIVE PREVIEW

Updated RLF Regulations Implementation of RLF Risk Analysis System - - PowerPoint PPT Presentation

Jun 29, 2023 228 likes •582 views

Updated RLF Regulations Implementation of RLF Risk Analysis System Decem ber 14, 2017 1 Webinar Agenda REVOLVING LOAN FUND PROGRAM CHANGES RISK ANALYSIS SYSTEM AND PROPOSED MEASURES PUBLIC COMMENT PROCESS AND REPORTING TRANSITION EDA

slide-1
SLIDE 1

1

Updated RLF Regulations

Implementation of RLF Risk Analysis System Decem ber 14, 2017

slide-2
SLIDE 2

Webinar Agenda

REVOLVING LOAN FUND PROGRAM CHANGES RISK ANALYSIS SYSTEM AND PROPOSED MEASURES PUBLIC COMMENT PROCESS AND REPORTING TRANSITION

slide-3
SLIDE 3

EDA Revolving Loan Funds

EDA RLFs established for lending – Economic Adjustment Assistance Grants to capitalize or recapitalize RLFs most commonly fund business lending, but also may fund public infrastructure or other authorized lending

  • activities. [see 13 CFR § 307.7]
  • About 520 EDA-funded RLFs nationwide
  • EDA investment of $538 million
  • Combined capital base of about $824 million
  • 37,500 loans made and 662,000 jobs created/ retained
  • $3 billion lent and $16 billion leveraged
slide-4
SLIDE 4

Updated RLF Regulations

REVOLVING LOAN FUND PROGRAM CHANGES

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .
slide-5
SLIDE 5

RLF Program Changes

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

RLF

Partnership

slide-6
SLIDE 6

RLF Reporting Income/ Expense Reporting:

  • 12-month fiscal year
  • Required audit

Fiscal Year Reporting:

  • ED-209, revised
  • ED-209I, eliminated
slide-7
SLIDE 7

Risk Analysis System

C – Capital A – Assets M – Managem ent E – Earnings L – Liquidity S – Strategic Results

slide-8
SLIDE 8

Allowable Cash Percentage

Cap ital U tilizatio n Th re s h o ld  Allo w able Cas h Pe rce n tage “75 % Ru le ” Re gio n al Ave rage Se qu e s te re d Exce s s Cas h 1 o f 15 m e as u re s

Seattle Denver Austin Chicago Atlanta Philadelphia

slide-9
SLIDE 9

Total RLF Cash Available for Lending = $8,504,025 Total of All RLF Capital Base Amounts = $33,065,930 $8,504,025 ÷ $33,065,930 = 26% Allowable Cash Percentage

ACP Example

RLF Nam e Capital Base Cash Available Cash Percentage RLF-1 $4,500,000 $1,200,000 27% RLF-2 $7,600,000 $2,800,000 37% RLF-3 $1,670,000 $630,000 38% RLF-4 $13,872,930 $2,974,025 21% RLF-5 $5,423,000 $900,000 17% Regional Total $33,0 65,930 $8 ,50 4,0 25 26%

slide-10
SLIDE 10

Terms Sections

Updates and Reorganization

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Definitions

slide-11
SLIDE 11

What Does Not Change?

PERPETUTITY

FED ERAL CH ARACTER OF RLF FU N D S OU R COMMITMEN T TO YOU

slide-12
SLIDE 12

Risk Analysis System

RISK ANALYSIS SYSTEM AND PROPOSED MEASURES

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .
slide-13
SLIDE 13

RAS Summary

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .
slide-14
SLIDE 14

Capital

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Capital Base Index RLF Capital Base divided by the

  • riginal RLF

Capital Base at the time the RLF was established Greater than 1.5 From 1.0 to 1.5 Less than 1.0

slide-15
SLIDE 15

Assets

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Default Rate RLF Principal Outstanding for Loans in Default divided by RLF Principal Outstanding for Total Active Loans Less than 10% From 10% to 20% Greater than 20%

slide-16
SLIDE 16

Assets

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Default Rate Over Time Number of consecutive months where default rate is over 20% Less than 12 months From 12 to 24 months More than 24 months

slide-17
SLIDE 17

Assets

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Loan Write-Off Ratio The ratio of the number of loans written-off to the number of “inactive loans” (calculated as number of total loans minus number of active loans). Less than 1

  • ut of

every 6 From 1

  • ut of

every 6 to 1 out of every 4 Greater than 1 out

  • f every 4
slide-18
SLIDE 18

Assets

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Dollars Written-Off Loan Losses divided by the difference between Total RLF Dollars Loaned and Total RLF Principal Outstanding. Less than 10% From 10% to 20% Greater than 20%

slide-19
SLIDE 19

Management

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Financial Control Number and magnitude of audit findings No findings Minor findings Material findings*

* Material findings pertaining to Organization, Questioned Costs, Solvency, Interrelated party transactions

slide-20
SLIDE 20

Management

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Tenure Shortest tenure of Executive Director, Lending Director, Finance Director, and Reporting Official Greater than 3 years From 2 to 3 years Vacancy

  • r less

than 2 years

slide-21
SLIDE 21

Management

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

RLF Plan Updated RLF Plan where EDA has not granted a time extension RLF Plan up to date, updates submitte d at least every 5 years Updated RLF Plan received more than 5 years since its last update but within 6 years RLF Plan expired and not updated within the last 6 years

slide-22
SLIDE 22

Management

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Financial Reporting Date RLF Financial Report, ED-209 submitted to EDA On time with no corrections needed Up to 60 days late and/ or returned to RLF Recipient for minor corrections More than 60 days late; or sent back for major revision

slide-23
SLIDE 23

Management

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Timely and Complete Reporting Date audit and/ or additional reports (such as SF-425 or Corrective Action Plan) submitted to EDA On time Up to 30 days late Up to 30 days late

slide-24
SLIDE 24

Earnings

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Net RLF Income Portion of RLF Income Used for Administrative Expenses divided by Total RLF Income Less than 50% From 50% to 100% More than 100%

slide-25
SLIDE 25

Liquidity

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Cash Percentage RLF Cash Available for Lending divided by RLF Capital Base Less than 90% of the ACP From 90% to 110% of the ACP More than 110% of the ACP

slide-26
SLIDE 26

Liquidity

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Cash Percentage Over Time Length of time where the Cash Percentage exceeds the Region's ACP Less than 12 months From 12 to 24 months More than 24 months

slide-27
SLIDE 27

Strategic Results

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Cost Per Job RLF Dollars Loaned divided by Total Jobs compared to RLF Plan Target Less than 90% of RLF Plan target 90% to 110% of RLF Plan target Greater than 110% of RLF Plan target

slide-28
SLIDE 28

Strategic Results

 Ple a s e u s e t h e w e b in a r ch a t fe a t u r e t o s u b m it q u e s t io n s

  • r co m m e n t s a t a n y p o in t d u r in g t h e w e b in a r .

Measure: Determ ined by:

3 2 1

Leverage Ratio Total Dollars Leveraged divided by RLF Dollars Loaned. Meets or exceeds required leverage

  • f 2:1

N/ A Less than 2:1

slide-29
SLIDE 29

Risk Analysis Scoring

slide-30
SLIDE 30

Reporting, Rating & Remedy

A = An n u a l R e p o r t in g B = S e m i-An n u a l R e p o r t in g C = S e m i-An n u a l R e p o r t in g & Co r r e ct iv e Act io n

slide-31
SLIDE 31

RLF Program Transition

REVOLVING LOAN FUND PROGRAM CHANGES RISK ANALYSIS SYSTEM AND PROPOSED MEASURES PUBLIC COMMENT PROCESS AND REPORTING TRANSITION

slide-32
SLIDE 32

Public Comment Instructions

Em ail: regulations@eda.gov Include ‘‘Comments on EDA Notice” and “Implementation of Revolving Loan Fund Risk Analysis System” in the subject line of the message. Mail: Ryan Servais, Attorney Advisor Office of the Chief Counsel, Economic Development Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Suite 72023, Washington, DC 20230 Please indicate “Comments on EDA Notice” and “Implementation of Revolving Loan Fund Risk Analysis System” on the envelope. Fax: (202) 482–5671. Please indicate “Attention: Office of Chief Counsel,” “Comments on EDA Notice” and “Implementation of Revolving Loan Fund Risk Analysis System” on the cover page. Co m m e n ts D U E Jan u ary 2 !!

slide-33
SLIDE 33

Implementation Schedule

 D e c. 1 – R e v is e d r e g u la t io n s p u b lis h e d  D e c. 14 – U p d a t e d R LF R e g u la t io n s W e b in a r  Ja n . 2 – R e v is e d R e g u la t io n s b e co m e e ffe ct iv e  Ja n . 2 – R AS Pu b lic Co m m e n t co n clu d e s  M a r ch 3 1 – Fin a l s e m i-a n n u a l r e p o r t in g p e r io d e n d  Ju n e 3 0 – Fir s t la r g e co h o r t fo r fis ca l y e a r e n d r e p o r t in g

slide-34
SLIDE 34

Questions??

OTHER KEY CHANGES: Overview of Other Important Changes

Mitchell Harrison RLF Coordinator Performance & National Programs mharrison@eda.gov Thank you. Jeff Goldsberry RLF Administrator Seattle Regional Office jgoldsberry@eda.gov