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Financial Services Law Insights and Observations

Treasury issues emergency capital investment program FAQs

Agency Rule-Making & Guidance ECIP OCC Federal Reserve Board FDIC Covid-19

Agency Rule-Making & Guidance

On March 30, the U.S. Treasury Department issued frequently asked questions to provide timely guidance concerning all aspects of the Emergency Capital Investment Program (ECIP). The FAQs cover issues regarding:

  • The types of institutions eligible to participate in the ECIP;
  • Submission of an ECIP application and emergency investment lending plan;
  • How Treasury will decide allocation of the available capital among applicants that meet the thresholds for eligibility, including how well an applicant has responded to the needs of communities impacted by the Covid-19 pandemic;
  • Whether an institution can choose to issue preferred stock or subordinated debt in the ECIP; and
  • Compliance and reporting requirements.

The ECIP was established by the Consolidated Appropriations Act of 2021 (covered by InfoBytes here), and will provide up to $9 billion in capital directly to Community Development Financial Institutions and minority depository institutions to provide, among other things, “loans, grants, and forbearance for small and minority businesses and consumers in low income communities” that may be disproportionately impacted by the Covid-19 pandemic. As previously covered in InfoBytes, on March 22, the OCC, Federal Reserve Board, and the FDIC published an interim final rule (IFR) to facilitate the implementation of the ECIP.

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