United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED July 5, 2023 No. 22-30080 Lyle W. Cayce Clerk OnPath Federal Credit Union,

Plaintiff—Appellant,

versus

United States Department of Treasury, Community Development Financial Institutions Fund,

Defendant—Appellee.

Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:20-CV-1367

Before Dennis, Elrod, and Ho, Circuit Judges. James C. Ho, Circuit Judge: When an application for federal funding contains materially false information, it’s reasonable for the federal agency to want the money back. And that is so even if it turns out that the recipient might’ve been eligible to receive the funds on some other basis not presented in the application. No harm, no foul may be appropriate in sports—but it’s not a rule that judges may unilaterally impose on the funding decisions of federal agencies. We accordingly affirm the district court and hold that the agency here did not abuse its discretion by requiring repayment under these circumstances. Case: 22-30080 Document: 00516809768 Page: 2 Date Filed: 07/05/2023

No. 22-30080

I. The Treasury Department administers the Community Development Financial Institutions Fund. The Fund supports financial institutions that serve low-income clients and communities. See 12 U.S.C. § 4701(b). To be eligible for funding, a financial institution must apply for and receive certification. See 12 C.F.R. § 1805.200(a)(2). As part of its certification application, the institution must show that it serves either (1) an Investment Area or (2) a Targeted Population. See id. § 1805.201(b)(3)(i). An Investment Area is a geographic unit defined by its objective economic distress or its designation by the Internal Revenue Code. See id. § 1805.201(b)(3)(ii). A Targeted Population is a group of individuals who are low-income or lack access to financial services. Id. § 1805.201(b)(3)(iii). Under the terms of the certification application, an applicant institution must prove that it directs at least 60% of its activities toward either an Investment Area or a Targeted Population. If an applicant does not meet this 60% threshold, it will not be certified. In 2005, OnPath Federal Credit Union submitted a certification application. Its application stated that OnPath did not serve an Investment Area, but that it did serve a Targeted Population. Using year-end 2004 data, OnPath indicated that it served a Low-Income Targeted Population in three regions of Louisiana. In these areas, OnPath explained, it directed more than 60% of its activities toward a Low-Income Targeted Population. The Fund certified OnPath in January 2006. As a result, OnPath received over $12 million in awards over the next several years. The Inspector General of the Treasury Department subsequently started an audit of OnPath. Based on this detailed, multi-year audit, the Inspector General issued a report concluding that OnPath had “submitted invalid information in its