1. RLF Conference April 10, 2007 1:30 PM: Track 1: How to Establish an RLF – Subsequent Management Randy Frescoln Business – Cooperative Program Director USDA Rural Development

2. Funds established Revolving Loan Funds (RLF) are established through three USDA Rural Development Programs 1.Rural Business Enterprise Grant (RBEG) 2.Rural Economic Development Grant (REDG) 3.Intermediary Relending Program (IRP)

3. Rural Business Enterprise Grant Established by nonprofit organizations and public bodies without an established commercial loan portfolio. –To assist small and emerging private business enterprises. –RLF size is typically smaller - $50,000 - $70,000

4. Rural Economic Development Grant Established by Rural Electric Cooperatives and Rural Telephone Companies who borrower funds from the Agency’s Utility Programs. –To promote rural economic development and job creation projects. – RLF size is typically $300,000 - $400,000

5. Intermediary Relending Program LOAN vs. Grant (1% - 30 years) –Established by nonprofit and public bodies with lending experience and existing commercial loan portfolio. –To alleviate poverty and increase economic activity and employment in rural communities. –RLF size is usually larger > $500,000

6. In general, all Agency RLFs: –Include matching funds –Are administered in accordance with a RLF plan –Are used to provide gap financing –Require periodic reports to the Agency –Require ongoing oversight by the Agency

7. Civil Rights Program Compliance 1.Overview of Civil Rights Laws 2.Why does it apply to your RLF? 3.What is the RLF lender’s responsibility? 4.What is the Agency’s responsibility? 5.Tracking tools 6.Equal Credit Opportunity Act

8. Overview of Civil Rights Laws Title VI of the Civil Rights Act of 1964 “…No person in the United States shall on the ground of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance…”

9. Overview of Civil Rights Laws Title IX of the Education Amendments of 1972 “…No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of or be subjected to discrimination under any educational program or activity receiving Federal financial assistance…”

10. Overview of Civil Rights Laws Section 504 of the Rehabilitation Act of 1973 “…No qualified handicapped person shall, on the basis of handicap be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity receiving Federal financial assistance…”

11. Overview of Civil Rights Laws Age Discrimination Act of 1975 “…No person in the United States shall, on the basis of age, be excluded from participation in, be denied the benefits of or be subjected to discrimination under any program or activity receiving Federal financial assistance…”

12. Why does it apply to your RLF? 1.Code of Federal Regulation Title 7, Part 15, Subpart A 2.RD Instruction 1901-E Civil Rights Compliance Requirements 3.Loan and Grant Documents

13. What is the RLF lender’s responsibility? 1.Sign Form RD 400-4, Assurance Agreement. 2.Collect racial, ethnic and gender data on all applications. 3.Maintain a summary of actions for each application (rejected, withdrawn etc…).

14. What is the RLF lender’s responsibility? 4. Assure that written materials contain nondiscrimination statement. 5. Assure accessibility to facility and program. 6. Display the “And Justice for All” and “Equal Employment Opportunity is the Law” posters.

15. What is the RLF lender’s responsibility? 7.Obtain Assurance Agreement from Ultimate Recipients (RLF Borrower) 8. Obtain employment data from Ultimate Recipients (RLF Borrower)

16. What is the Agency’s responsibility? 1.Obtain Form RD 400-4, Assurance Agreement 2.Advise RLF lender of responsibilities 3.Conduct Civil Rights Compliance Reviews 4.Report instances of noncompliance to Agency Civil Rights Staff

17. Tracking Tools Data Collection Notice RLF Data Collection Table Organization Data Collection Table Ultimate Recipient Data Collection Table

18. Equal Credit Opportunity Act ECOA applies to all lenders notification is issued when an adverse decision has been made notification required 30 days after a complete application is received notification must contain explanation of reasons for denial