The SSBCI statute, at 12 U.S.C. 5702(c)(4), authorizes Treasury to terminate the availability of any SSBCI allocated funds not transferred to a participating jurisdiction if the jurisdiction has not received its second tranche by the three-year anniversary of the date that Treasury approves the jurisdiction for participation in the SSBCI Capital Program.
To avoid a termination of funding under this provision of the statute, a participating jurisdiction should, within three years after the execution of its allocation agreement, (1) expend, obligate, or transfer at least 80 percent of its first tranche disbursement of allocated funds, and (2) submit a disbursement request to Treasury in accordance with FAQ #4 in Section III.b. If either of these criteria is not met, Treasury expects to terminate the participating jurisdiction’s second and third tranche allocated funds that have not been transferred to the jurisdiction.
During Treasury’s disbursement review described in FAQ #3 in Section III.b, Treasury or the participating jurisdiction may identify certain transactions or administrative costs that are not compliant under SSBCI program rules and therefore may not count toward the 80 percent threshold. If, after excluding those transactions or costs, the participating jurisdiction would fall below the 80 percent threshold, then Treasury expects to terminate the jurisdiction’s remaining allocated funds unless the jurisdiction can identify alternative compliant transactions or costs that were expended, obligated, or transferred prior to the jurisdiction’s three-year anniversary.
For example, assume a participating jurisdiction’s three-year anniversary is January 1, 2026, and it submits a second tranche disbursement request on December 20, 2025, certifying to 81% deployment of the first tranche, but on January 5, 2026, Treasury determines that a transaction comprising 2% of the jurisdiction’s first tranche is non-compliant. In that case, the jurisdiction may meet its threshold if it identifies alternative and compliant uses of funds (equal to at least 1% of the first tranche) that occurred on or before January 1, 2026. If the jurisdiction identifies a qualifying alternative use of funds, the jurisdiction’s allocation for its second and third tranches will not be terminated based on the three-year deadline. However, Treasury reserves the right to 11 take any other appropriate action regarding any identified non-compliance, including the remedies set forth in Section 5.2 of the Allocation Agreement, and jurisdictions are advised to consider unenrollment and replenishment as set out in Section XII of the Guidelines.
This FAQ does not extend the otherwise applicable December 31, 2027, final deadline for disbursement requests under FAQ #4 in Section III.b. This FAQ also does not limit Treasury’s other authorities to withhold or terminate the availability of funding in accordance with the SSBCI statute, Allocation Agreement, and program rules, including Treasury’s authority to determine that a general event of default has occurred under Section 5.1 of the Allocation Agreement and to exercise associated remedies.