Small Business Lending and Economic Inequality Reduction Act of 2015

Summary: Small Business Lending and Economic Inequality Reduction Act of 2015  This bill amends the Small Business Act to establish a Community Advantage Program, under which the Small Business Administration (SBA) may guarantee loans up to $350,000 made by specified kinds of institutions, including:  development companies eligible for the state and local development company program, nonprofit intermediaries, non-federally regulated entities certified as community development financial institutions, and any other SBA-approved nonprofit organizations.  At least 60% of these loans must be made to businesses in certain underserved markets, such as low- or moderate-income communities, HUBZones, empowerment zones, or enterprise communities. The SBA must promulgate regulations for this Program, which shall be substantially similar to its Community Advantage Pilot Program, which shall terminate when these regulations take effect. The Federal Home Loan Bank Act is amended to authorize Federal Home Loan Banks to make long-term secured advances to their members to provide funds to community development financial institutions.  At the time of origination or renewal of a loan or advance, a Bank must obtain and maintain a security interest in collateral eligible pursuant to any secured loan for any community development financial institution.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Lending and Economic 
Inequality Reduction Act of 2015''.

SEC. 2. COMMUNITY ADVANTAGE PROGRAM.

    (a) In General.--Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)) is amended by adding at the end the following:
            ``(35) Community advantage program.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `covered institution' 
                        means--
                                    ``(I) a development company (as 
                                defined in section 103 of the Small 
                                Business Investment Act of 1958 (15 
                                U.S.C. 662)) that is eligible to 
                                participate in the program established 
                                under title V of such Act (15 U.S.C. 
                                695 et seq.);
                                    ``(II) a nonprofit intermediary (as 
                                defined in subsection (m)(11));
                                    ``(III) a non-Federally regulated 
                                entity certified as a community 
                                development financial institution by 
                                the Community Development Financial 
                                Institutions Fund established under 
                                section 104(a) of the Riegle Community 
                                Development and Regulatory Improvement 
                                Act of 1994 (12 U.S.C. 4703(a)); or
                                    ``(IV) any other nonprofit 
                                organization approved by the Small 
                                Business Administration;
                            ``(ii) the term `program' means the 
                        Community Advantage Program established under 
                        subparagraph (B);
                            ``(iii) the term `Reservist' means a member 
                        of a reserve component of the Armed Forces 
                        named in section 10101 of title 10, United 
                        States Code;
                            ``(iv) the term `service-connected' has the 
                        meaning given that term in section 101(16) of 
                        title 38, United States Code; and
                            ``(v) the term `small business concern in 
                        an underserved market' means a small business 
                        concern--
                                    ``(I) that is located in--
                                            ``(aa) a low- or moderate-
                                        income community;
                                            ``(bb) a HUBZone; or
                                            ``(cc) a community that has 
                                        been designated as an 
                                        empowerment zone or an 
                                        enterprise community under 
                                        section 1391 of the Internal 
                                        Revenue Code of 1986;
                                    ``(II) that has more than 50 
                                percent of employees residing in a low- 
                                or moderate-income community;
                                    ``(III) that has been in existence 
                                for not more than 2 years on the date 
                                on which a loan is made to the small 
                                business concern under the Community 
                                Advantage Program established under 
                                subparagraph (B);
                                    ``(IV) owned and controlled by 
                                veterans;
                                    ``(V) owned and controlled by 
                                service-disabled veterans; or
                                    ``(VI) not less than 51 percent of 
                                which is owned and controlled by 1 or 
                                more--
                                            ``(aa) members of the Armed 
                                        Forces participating in the 
                                        Transition Assistance Program 
                                        of the Department of Defense;
                                            ``(bb) Reservists;
                                            ``(cc) spouses of veterans, 
                                        members of the Armed Forces, or 
                                        Reservists; or
                                            ``(dd) surviving spouses of 
                                        veterans who died on active 
                                        duty or as a result of a 
                                        service-connected disability.
                    ``(B) Establishment.--There is established a 
                Community Advantage Program, under which the 
                Administration may guarantee loans made by covered 
                institutions under this subsection, including loans 
                made to small business concerns in underserved markets.
                    ``(C) Requirements.--Not less than 60 percent of 
                loans made by a covered institution under the program 
                shall consist of loans made to small business concerns 
                in underserved markets under the program.
                    ``(D) Maximum loan amount.--The maximum loan amount 
                under the program is $350,000.
                    ``(E) Regulations.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of this paragraph, 
                        the Administrator shall promulgate regulations 
                        to carry out the program, which shall be 
                        substantially similar to the Community 
                        Advantage Pilot Program of the Administration, 
                        as in effect on the day before the date of 
                        enactment of this paragraph.
                            ``(ii) Pilot program.--Beginning on the 
                        date on which the regulations promulgated by 
                        the Administrator under clause (i) take effect, 
                        the Administrator may not carry out the 
                        Community Advantage Pilot Program of the 
                        Administration.''.
    (b) Technical and Conforming Amendment.--Section 3(r) of the Small 
Business Act (15 U.S.C. 632(r)) is amended--
            (1) in paragraph (1), by inserting before the period at the 
        end the following: ``, but does not include a covered 
        institution, as defined in section 7(a)(35)(A)''; and
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``means a business concern'' and inserting the 
                following: ``--''
                    ``(A) means a business concern if--'';
                    (B) by redesignating subparagraphs (A), (B), and 
                (C) as clauses (i), (ii), and (iii), respectively, and 
                adjusting the margins accordingly;
                    (C) in subparagraph (A)(iii), as so redesignated, 
                by striking the period at the end and inserting ``; 
                and''; and
                    (D) by adding at the end the following:
                    ``(B) does not include a covered institution, as 
                defined in section 7(a)(35)(A).''.

SEC. 3. EXPANDING THE PURPOSES OF ADVANCES AND COLLATERAL AVAILABLE TO 
              COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

    Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) 
is amended--
            (1) in paragraph (2)(B), by inserting ``or community 
        development financial institution (as defined in section 103 of 
        the Riegle Community Development and Regulatory Improvement Act 
        of 1994 (12 U.S.C. 4702))'' after ``community financial 
        institution''; and
            (2) in paragraph (3)(E), by inserting ``or community 
        development financial institution (as defined in section 103 of 
        the Riegle Community Development and Regulatory Improvement Act 
        of 1994 (12 U.S.C. 4702))'' after ``community financial 
        institution''.