Financial Freedom Act of 1997

Summary: Financial Freedom Act of 1997 - Amends the Federal Credit Union Act to limit Federal credit union membership to one or more groups each of which has a common bond within such group. 
Repeals the Community Reinvestment Act of 1977. 
Amends the Internal Revenue Code to reduce the corporate tax rate for qualified community lenders.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Freedom Act of 1997''.

SEC. 2. FIELD OF MEMBERSHIP OF FEDERAL CREDIT UNIONS.

    Section 109 of the Federal Credit Union Act (12 U.S.C. 1759) is 
amended by striking ``Federal credit union membership shall be limited 
to groups having a common bond'' and inserting ``the membership of any 
Federal credit union shall be limited to 1 or more groups each of which 
have (within such group) a common bond''.

SEC. 3. REPEAL OF COMMUNITY REINVESTMENT ACT OF 1977.

    The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is 
hereby repealed.

SEC. 4. REDUCED TAX RATE FOR QUALIFIED COMMUNITY LENDERS.

    (a) In General.--Section 11 of the Internal Revenue Code of 1986 
(relating to tax on corporations) is amended by adding at the end the 
following new subsection:
    ``(e) Reduced Tax Rate for Qualified Community Lenders.--
            ``(1) In general.--In the case of a qualified community 
        lender, the tax imposed by subsection (a) for any taxable year 
        shall not exceed 15 percent of the excess (if any) of--
                    ``(A) taxable income for such year, over
                    ``(B) $250,000.
            ``(2) Qualified community lender.--For purposes of this 
        paragraph, the term `qualified community lender' means an 
        insured depository institution (as defined by section 3(c) of 
        the Federal Deposit Insurance Act) if, as determined at the end 
        of the institution's taxable year--
                    ``(A) 60 percent of the aggregate outstanding loans 
                made by such institution, its parent, and its 
                affiliates, consist of loans made to borrowers who 
                are--
                            ``(i) not related persons with respect to 
                        such institution, and
                            ``(ii)(I) are residents of the local 
                        community in which such institution is 
                        chartered, or
                            ``(II) are engaged in a trade or business 
                        in such community, but only if such loans are 
                        made with respect to such trade or business in 
                        such community,
                    ``(B) two-thirds or more of the common stockholders 
                of record of such institution or its parent company are 
                residents of, or engaged in a trade or business in, 
                such community,
                    ``(C) less than 10 percent of all outstanding 
                common stock of such institution or its parent is owned 
                directly or indirectly by persons other than 
                individuals,
                    ``(D) neither the common stock of such institution 
                nor the common stock of its parent is publicly traded 
                on an established securities market, and
                    ``(E) the aggregate assets of such institution, its 
                parent, and its affiliates do not exceed 
                $5,000,000,000.
            ``(3) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Affiliate.--The term `affiliate', with 
                respect to any institution, has the meaning given such 
                term by paragraphs (1) and (2) of section 23A(b) of the 
                Federal Reserve Act (determined without regard to 
                section 23A(b)(2)(E) of such Act).
                    ``(B) Parent.--
                            ``(i) In general.--The term `parent' means, 
                        with respect to an institution--
                                    ``(I) any company which has control 
                                of such institution, and
                                    ``(II) any company which has 
                                control of a company described in 
                                subclause (I).
                            ``(ii) Company and control.--The terms 
                        `company' and `control' have the respective 
                        meanings given such terms by section 2 of the 
                        Bank Holding Company Act of 1956.
                    ``(C) Related person.--Persons shall be treated as 
                related to each other if the relationship between such 
                persons is described in section 267(b) or 707(b).
            ``(4) Inflation adjustment.--In the case of a taxable year 
        beginning in a calendar year after 1997, the $250,000 amount 
        contained in paragraph (1)(B) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment under section 
                1(f)(3) for the calendar year in which the taxable year 
                begins, determined by substituting `calendar year 1996' 
                for `calendar year 1992' in subparagraph (B) thereof.
        If any amount as adjusted under the preceding sentence is not a 
        multiple of $500, such amount shall be rounded to the nearest 
        multiple of $500.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.