Community Development Bank Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Development Bank Act''.

SEC. 2. STATEMENT OF PURPOSES.

    The purposes of this Act are as follows:
            (1) To increase the amount of credit available for the 
        economic revitalization of distressed urban and rural 
        communities.
            (2) To enable economically disadvantaged persons and small, 
        minority-owned, and women-owned businesses to have improved 
        access to the resources of our financial system, and to use 
        such resources as a foundation for economic growth, increased 
        employment and community development.
            (3) To increase the supply of mortgage credit and other 
        financing necessary for the private sector to rehabilitate the 
        housing stock in inner cities and rural areas for low- and 
        moderate-income families.
            (4) To provide capital for housing construction and 
        development, small businesses, and community development 
        projects.
            (5) To provide technical and managerial assistance to small 
        businesses and other entrepreneurs located in economically 
        distressed areas.
            (6) To encourage the establishment of privately capitalized 
        community development banks to serve the credit needs of 
        financially underserved residents of urban and rural areas of 
        our country.

                  TITLE I--COMMUNITY DEVELOPMENT BANKS

SEC. 101. ESTABLISHMENT OF A COMMUNITY DEVELOPMENT BANKERS' BANK.

    (a) In General.--The Comptroller of the Currency is hereby 
authorized to issue a certificate of authority to commence the business 
of banking to a national banking association that is owned exclusively 
(except to the extent directors' qualifying shares are required by law) 
by one or more insured depository institutions and will be engaged 
primarily in community development activities.
    (b) Required Name.--A national banking association chartered 
pursuant to subsection (a) shall be known as a ``community development 
bank'', and shall use the term ``community development bank'' and the 
name of the community in which it is located and will serve, in its 
title.
    (c) Regulation.--A community development bank chartered pursuant to 
subsection (a) shall be subject to such rules and orders as the 
Comptroller deems appropriate, and, except as otherwise specifically 
provided in this title or in such rules and orders, shall be vested 
with and subject to the same rights, duties and limitations that apply 
to other national banking associations, including the right to accept 
deposits.
    (d) Board of Directors.--At least 25 percent of members of the 
community development bank's board of directors shall be individuals 
residing in and representing the interests of the community that the 
bank will serve.

SEC. 102. AUTHORITY TO INVEST IN A COMMUNITY DEVELOPMENT BANK.

    An insured depository institution may invest in the shares of one 
or more community development banks. Such investment may not exceed, in 
the aggregate, an amount in excess of 5 percent of the depository 
institution's tier one or core capital or, in the case of a particular 
institution, such lesser amount as the appropriate Federal banking 
agency determines to be necessary in order to protect the safety and 
soundness of the institution.

SEC. 103. EXPEDITED PROCEDURES.

    Within six months after the date of enactment of this Act, the 
Comptroller of the Currency shall develop and publish in the Federal 
Register expedited procedures for the consideration of applications for 
a certificate to commence the business of banking for a community 
development bank. The Federal Deposit Insurance Corporation shall 
develop expedited procedures for consideration of an application by a 
community development bank for deposit insurance. Final decisions shall 
be made by the Comptroller and the Federal Deposit Insurance 
Corporation within nine months after the receipt of completed 
applications.

SEC. 104. COMMUNITY DEVELOPMENT BANK ACTIVITIES.

    (a) Primary Purpose.--A community development bank may only make 
loans and other investments designed to provide a reasonable economic 
return to the bank and its shareholders, consistent with its primary 
purpose of providing credit, capital, and related services to targeted 
persons and targeted geographic areas within its community.
    (b) Loan and Investment Activities.--In order to accomplish the 
purposes of this Act, a community development bank may engage in 
activities consistent with this Act, including the making or providing 
of the following:
            (1) Residential mortgage loans.
            (2) Residential construction loans.
            (3) Small business commercial loans.
            (4) Home improvement and rehabilitation loans.
            (5) Neighborhood commercial revitalization loans.
            (6) Small farm loans.
            (7) Industrial development loans.
            (8) Equity investments in low- and moderate-in-come real 
        estate development and rehabilitation projects.
            (9) Equity investments in community development 
        corporations and projects.
            (10) Equity investments in small business development 
        corporations.
            (11) Marketing and management assistance.
            (12) Business planning and counseling services.
            (13) Financial and technical services.
            (14) Vocational training.
            (15) Deposit funds in credit unions serving predominately 
        low-income members as defined by the National Credit Union 
        Administration Board.
    (c) Coordination.--A community development bank shall coordinate 
its activities with activities and programs of the Department of 
Housing and Urban Development, the Department of Veterans Affairs, the 
Department of Commerce, the Small Business Administration, and other 
agencies with respect to the development and financing of community 
development organizations and projects and small businesses.
    (d) Competition With Existing Institutions.--A community 
development bank shall target its activities to customers do adequately 
served by existing depository institutions.

SEC. 105. OTHER COMMUNITY DEVELOPMENT BANKS.

    Any insured depository institution may apply to the appropriate 
Federal banking agency to be certified as a ``community development 
bank''. The agency shall issue such certification if it finds that such 
bank is primarily engaged in community development activities, and 
otherwise complies with the provisions of this Act, other than 
subsections (a), (b) and (c) of section 101, and that such 
certification will further the purposes of this title.

SEC. 106. COMMUNITY REINVESTMENT ACT EVALUATION.

    (a) Examination.--The appropriate Federal banking agency shall 
conduct an annual onsite examination and evaluation of every community 
development bank in order to determine compliance with this Act and to 
assess the bank's record of meeting the credit needs of its community, 
as described in section 804 of the Community Reinvestment Act of 1977.
    (b) Hearing Required.--Prior to issuing a final Community 
Reinvestment Act evaluation and rating, the appropriate Federal banking 
agency shall--
            (1) publish in two or more newspapers of general 
        circulation a statement that an informal hearing on the bank's 
        success in meeting the credit needs of its community is to be 
        held; and
            (2) directly notify known representatives of consumer and 
        community groups located within the bank's community that an 
        informal hearing is to be held.
    (c) Notice.--The publication and notice required under subsection 
(b) shall state the date and place for the hearing, which must be at 
least thirty days following the date of the publication or mailing of 
the notice, and shall invite interested persons and organizations to 
provide oral and written testimony concerning the performance of the 
community development bank.
    (d) Consideration of Testimony.--The appropriate Federal banking 
agency shall consider and take into account the testimony and 
statements provided by community representatives in evaluating the 
performance of a community development bank under this section.
    (e) Final Evaluation.--Following the hearing, the appropriate 
Federal banking agency shall provide a final Community Reinvestment Act 
of 1977 evaluation and rating, including a written explanation for any 
findings and conclusions.
    (f) Re-evaluation.--A community development bank that receives a 
final rating that is less than a satisfactory rating shall be 
reevaluated within ninety days by the appropriate Federal banking 
agency in order to determine whether it has made the necessary changes 
in policies or practices to warrant a satisfactory rating.

SEC. 107. COMMUNITY REINVESTMENT ACT COMPLIANCE.

    (a) Effect of Rating.--For purposes of the Community Reinvestment 
Act of 1977, the evaluation and rating of a community development bank 
shall be deemed to be the evaluation and rating of each insured 
depository institution that has made a qualifying investment in such 
community development bank. Any insured depository institution 
receiving a satisfactory or outstanding rating pursuant to this section 
shall be deemed to have met the credit needs of its community.
    (b) Coordination With Other Law.--An insured depository institution 
that maintains a qualifying investment in a community development bank 
shall not be subject to an evaluation conducted pursuant to section 804 
of the Community Reinvestment Act of 1977.
    (c) Effect of Non-qualifying Investment.--An insured depository 
institution that makes an investment that is not a qualifying 
investment shall have that investment considered by the appropriate 
Federal banking agency when that institution is evaluated under 
sections 804 and 807 of the Community Reinvestment Act of 1977.

SEC. 108. BANK HOLDING COMPANY ACT.

    No person shall be considered a bank holding company, or subject to 
the Bank Holding Company Act of 1956, due to an investment in a 
community development bank authorized under this title.

SEC. 109. DEFINITIONS.

    For purposes of this title--
            (1) the term ``community development bank'' means--
                    (A) a bank established pursuant to section 101, or
                    (B) certified as a community development bank 
                pursuant to section 105,
        that is primarily engaged in the business of providing credit 
        and investment capital and related services to targeted 
        populations and targeted geographic areas;
            (2) the term ``targeted population'' means minority-owned 
        and women-owned businesses, non-profit organizations, community 
        groups, and economically disadvantaged persons;
            (3) the term ``targeted geographic area'' means a 
        neighborhood or other geographic area that is suffering 
        economic distress, as measured by unemployment, poverty, 
        condition of housing stock, availability of credit, or other 
        indicator of relative economic condition;
            (4) the term a community development bank's ``community'' 
        means one or more contiguous geographic areas that represent 
        the combined market or service areas of the financial 
        institutions that have made qualifying investments in such 
        bank;
            (5) the term ``insured depository institution'' shall have 
        the meaning given such term in section 3 of the Federal Deposit 
        Insurance Act;
            (6) the term ``appropriate Federal banking agency'' shall 
        have the meaning given such term in section 3 of the Federal 
        Deposit Insurance Act; and
            (7) the term ``qualifying investment'' means an investment 
        in the equity shares of a community development bank in an 
        amount that is equal to the maximum permissible amount for that 
        investing institution, as prescribed in section 102.

SEC. 110. SAFETY AND SOUNDNESS.

    Nothing in this title shall be deemed to interfere with the 
authority of the appropriate Federal banking agency or the Federal 
Deposit Insurance Corporation to limit the permissible activities or 
investments of an insured depository institution or depository 
institution holding company, by order or regulation, in order to 
protect the safety or soundness of such institution or holding company.

SEC. 111. DISCRIMINATION AND FAIR HOUSING.

    (a) In General.--Nothing in this title shall be deemed to interfere 
with the authority of the appropriate Federal banking agencies to 
examine institutions for compliance with or to enforce the Equal Credit 
Opportunity Act, the Fair Housing Act, or the Home Mortgage Disclosure 
Act.
    (b) Applicability of Section 107.--Section 107 shall not apply to 
any institution found, in a civil or criminal judicial proceeding or 
final agency adjudication, to have violated any law described in 
subsection (a).

                    TITLE II--CONFORMING AMENDMENTS

SEC. 201. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT UNIONS.

    (a) Repeal.--Section 120(k) of the Federal Credit Union Act (12 
U.S.C. 1766(k)) is repealed.
    (b) Amendment.--The Federal Credit Union Act is amended by 
inserting after section 129 (12 U.S.C. 1772c) the following new 
section:

``SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT 
              UNIONS.

    ``(a) In General.--The Board may exercise the authority granted it 
by the Community Development Credit Union Revolving Loan Fund Transfer 
Act (Public Law 99-609) including any additional appropriation made or 
earnings accrued, subject only to this section and to regulations 
prescribed by the Board.
    ``(b) Investment.--The Board may invest any idle Fund moneys in 
United States Treasury securities. Any interest accrued on such 
securities shall become a part of the Fund.
    ``(c) Loans.--The Board may require that any loans made from the 
Fund be matched by increased shares in the borrower credit union.
    ``(d) Interest.--Interest earned by the Fund may be allocated by 
the Board for technical assistance to community development credit 
unions.
    ``(e) Definition.--As used in this section, the term `Fund' means 
the Community Development Credit Union Revolving Loan Fund.''.

SEC. 202. STUDY OF COMMUNITY DEVELOPMENT CREDIT UNION.

    (a) In General.--The National Credit Union Administration Board in 
consultation with representatives of the credit union industry shall 
conduct a study of community development credit activities by credit 
unions. In conducting the study, the Board shall consider--
            (1) the role of these institutions in providing credit and 
        related financial services to inner city and rural areas,
            (2) the failure rate of these institutions in the past,
            (3) the desirability of establishing a special examination 
        force for community development credit unions, and mentor 
        programs,
            (4) the desirability of establishing a clearinghouse for 
        the recirculation of startup equipment and furniture for 
        community development credit unions, and
            (5) appropriate startup and permanent financing programs 
        for such credit unions.
    (b) Report.--Not later than October 1, 1993, the Board shall issue 
a report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Banking, Finance and Urban Affairs of the 
House of Representatives on the study and the regulatory and 
legislative changes that may be necessary to ensure that community 
development activity by credit unions become and remain viable and 
productive.

Summary: TABLE OF CONTENTS: Title I: Community Development Banks Title II: Conforming Amendments Community Development Bank Act - Title I: Community Development Banks - Authorizes the Comptroller of the Currency to charter certain national banking associations that will: (1) engage primarily in community development activities, (2) be capitalized by insured depository institutions as its shareholders. And (3) provide credit, capital, and related services to revitalize distressed urban and rural communities. Restricts such a bank's loans and investments to provide a reasonable economic return to the bank and its shareholders consistent with its primary community development purpose. Mandates: (1) such bank's coordination with certain Federal agencies regarding its community development activities. And (2) an annual onsite examination to evaluate its compliance with this Act and its record of meeting community credit needs. Title II: Conforming Amendments - Amends the Federal Credit Union Act to: (1) authorize the National Credit Union Administration Board to provide technical assistance to community development credit unions by using the interest earned from authorized investments in Treasury securities. And (2) direct the Board to study and report to certain congressional committees on regulatory and legislative changes that may be necessary to ensure the viability and productivity of community development activities by credit unions.