To amend the Community Development Banking and Financial Institutions Act of 1994 to provide financial assistance to community development financial institutions to help defray the costs of operating small dollar loan programs, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Safe Affordable Small Dollar Loan 
Act of 2010''.

SEC. 2. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    The Community Development Banking and Financial Institutions Act of 
1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the 
following:

``SEC. 122. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    ``(a) Purposes.--The purposes of this section are to--
            ``(1) make financial assistance available from the Fund in 
        order to help community development financial institutions 
        defray the costs of operating small dollar loan programs, by 
        providing the amounts necessary for such institutions to 
        establish their own loan loss reserve funds to mitigate some of 
        the losses on such small dollar loan programs; and
            ``(2) encourage community development financial institution 
        to establish and maintain small dollar loan programs that would 
        help give consumers access to mainstream financial institutions 
        and combat payday lending.
    ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--The Fund shall make 
        grants to community development financial institutions or to 
        any partnership between such community development financial 
        institutions and any other federally insured depository 
        institution with a primary mission to serve targeted investment 
        areas, as such areas are defined under section 103(16), to 
        enable such institutions or any partnership of such 
        institutions to establish a loan-loss reserve fund in order to 
        defray the costs of a small dollar loan program established or 
        maintained by such institution.
            ``(2) Matching requirement.--A community development 
        financial institution or any partnership of institutions 
        established pursuant to paragraph (1) shall provide non-Federal 
        matching funds in an amount equal to 50 percent of the amount 
        of any grant received under this section.
            ``(3) Use of funds.--Any grant amounts received by a 
        community development financial institutions or any partnership 
        between or among such institutions under paragraph (1)--
                    ``(A) may not be used by such institution to 
                provide direct loans to consumers;
                    ``(B) may be used by such institution to help 
                recapture a portion or all of a defaulted loan made 
                under the small dollar loan program of such 
                institution; and
                    ``(C) may be used to designate and utilize a fiscal 
                agent for services normally provided by such an agent.
            ``(4) Technical assistance grants.--The Fund shall make 
        technical assistance grants to community development financial 
        institutions or any partnership between or among such 
        institutions to support and maintain a small dollar loan 
        program. Any grant amounts received under this paragraph may be 
        used for technology, staff support, and other costs associated 
        with establishing a small dollar loan program.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Consumer reporting agency that compiles and maintains 
        files on consumers on a nationwide basis.--The term `consumer 
        reporting agency that compiles and maintains files on consumers 
        on a nationwide basis' has the same meaning given such term in 
        section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 
        1681a(p)).
            ``(2) Small dollar loan program.--The term `small dollar 
        loan program' means a loan program under which a community 
        development financial institution or any partnership between or 
        among any such institutions offers loans to consumers that--
                    ``(A) are made in amounts not exceeding $2,500;
                    ``(B) must be repaid in installments;
                    ``(C) have no pre-payment penalty;
                    ``(D) the institution has to report payments 
                regarding the loan to at least 1 of the consumer 
                reporting agencies that compiles and maintains files on 
                consumers on a nationwide basis; and
                    ``(E) meet any other affordability requirements as 
                may be established by the Administrator.
    ``(d) Report to Congress.--Before the end of the 1-year period 
beginning on the date of the enactment of the Safe Affordable Small 
Dollar Loan Act of 2010, and each year thereafter, the Administrator 
shall submit to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives a report describing--
            ``(1) the activities carried out by the Fund pursuant to 
        this section; and
            ``(2) any measurable results, as appropriate and available, 
        related to the achievement of the purposes of this section as 
        described in subsection (a).
    ``(e) Authorization of Appropriations.--
            ``(1) Grant program.--There are authorized to be 
        appropriated for fiscal years 2010 through 2015 such sums as 
        may be necessary to carry out the grant program established 
        under this section.
            ``(2) Administrative expenses.--There is authorized to be 
        appropriated to the Fund for each fiscal year beginning in 
        fiscal year 2010, an amount equal to the amount of the 
        administrative costs of the Fund for the operation of the grant 
        program established under this section.''.

Summary: Safe Affordable Small Dollar Loan Act of 2010 - Amends the Community Development Banking and Financial Institutions Act of 1994 to require the Community Development Financial Institutions Fund to make grants to community development financial institutions or to any related partnership in order to enable such institutions to establish a loan-loss reserve fund to defray the costs of a small dollar loan program. Requires a community development financial institution to provide non-federal matching funds equal to 50 of the amount of any grant received. Prohibits the use of such grants to make direct loans to consumers. Permits a community development financial institution to use such a grant to: (1) help recapture a portion or all of a defaulted loan made under its small dollar loan program. And (2) designate and utilize a fiscal agent for services the agent normally provides. Requires the Fund to make technical assistance grants to community development financial institutions to support and maintain a small dollar loan program.