A community action agency shall lose its designation to serve a political subdivision, or a group of political subdivisions, only if the commissioner finds after adequate notice, a written statement of reasons and a fair hearing held in the community served by the agency that such agency has materially failed to comply with sections 17b-885 to 17b-895, inclusive. In such case, the commissioner may provide financial assistance to other public or private nonprofit agencies to aid them in establishing a community action agency in the area no longer served.