I 

112TH CONGRESS 

1ST SESSION H. R. 3635 

To encourage initiatives for financial products and services that are appropriate and accessible for millions of American small businesses that 

do not have access to the financial mainstream. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 12, 2011 

Mrs. MALONEY (for herself and Ms. RICHARDSON) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To encourage initiatives for financial products and services 

that are appropriate and accessible for millions of American small businesses that do not have access to the 

financial mainstream. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Investing in America’s 

5 Small Businesses Act of 2011’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 


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1 (1) Small businesses in underserved areas have 

2 for generations been unable to access affordable 

3 credit. 

4 (2) The financial crisis of 2008 only served to 

5 exacerbate efforts by entrepreneurs to access capital 

6 for the purpose of creating jobs and improving eco7 nomic outcomes in the community. 

8 (3) The Create Jobs for USA campaign by 

9 Starbucks Coffee Company and Opportunity Fi10 nance Network, through community development fi11 nancial institutions, will provide loans to under12 served small businesses and microenterprises to cre13 ate and sustain jobs throughout America. This will 

14 allow Americans to help Americans create and sus15 tain jobs, but will not be enough to help our Na16 tion’s small businesses. 

17 (4) Small business investments revitalize com18 munities by creating jobs but also contribute to the 

19 local tax base, which helps finance investments in 

20 schools, hospitals, infrastructure, and public safety. 

21 (5) The Community Development Financial In22 stitutions Fund, an agency of the Federal Govern23 ment located within the United States Department 

24 of the Treasury, has reported that in 2010 alone, 

25 community development financial institutions awardVerDate Mar 15 2010 00:55 Dec 17, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3635.IH H3635

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1 ees originated loans or investments totaling more 

2 than $1 billion, and financed almost 18,000 afford3 able housing units; more than 5,200 business and 

4 microenterprise loans; and created or maintained 

5 over 25,000 jobs and leveraged $1.5 billion in pri6 vate investment. 

7 (6) The Community Development Financial In8 stitutions Fund awardees have almost tripled jobs 

9 created since 2007, making almost 14,000 loans to 

10 small businesses on average each year, representing 

11 an average investment of close to $1 billion annu12 ally. 

13 (7) The Community Development Financial In14 stitutions Fund is well placed to complement the 

15 Create Jobs for USA campaign through careful, tar16 geted investments in community development finan17 cial institutions for the purposes of improving eco18 nomic outcomes for underserved families across the 

19 country. 

20 SEC. 3. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 

21 FUNDS FOR SMALL BUSINESS LENDING. 

22 (a) IN GENERAL.—The Community Development 

23 Banking and Financial Institutions Act of 1994 (12 

24 U.S.C. 4701 et seq.) is amended by adding at the end 

25 the following: 


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1 ‘‘SEC. 123. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 

2 FUNDS FOR SMALL BUSINESS LENDING. 

3 ‘‘(a) PURPOSES.—The purposes of this section are— 

4 ‘‘(1) to make financial assistance available from 

5 the Fund in order to help community development 

6 financial institutions defray the costs of operating 

7 small business loan programs, by providing the 

8 amounts necessary for such institutions to establish 

9 their own loan loss reserve funds to mitigate some 

10 of the losses on such small business loan programs; 

11 ‘‘(2) to encourage community development fi12 nancial institutions to establish and maintain small 

13 business loan programs that would help provide bor14 rowers access to mainstream financial institutions 

15 and combat high cost small business lending; and 

16 ‘‘(3) to encourage community development fi17 nancial institutions to expand the development serv18 ices they offer and to serve new investment areas 

19 and new targeted populations. 

20 ‘‘(b) GRANTS.— 

21 ‘‘(1) LOAN-LOSS RESERVE FUND GRANTS.— 

22 ‘‘(A) IN GENERAL.—The Fund shall make 

23 grants to community development financial in24 stitutions to enable such institutions to estab25 lish a loan-loss reserve fund in order to defray 


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1 the costs of a small business loan program es2 tablished or maintained by such institution. 

3 ‘‘(B) APPLICATION.—A community devel4 opment financial institution that wishes to re5 ceive a grant under this paragraph shall submit 

6 an application to the Administrator in such 

7 form and manner and containing such informa8 tion as the Administrator may require. 

9 ‘‘(C) MATCHING REQUIREMENT.—A com10 munity development financial institution shall 

11 provide non-Federal matching funds in an 

12 amount equal to 50 percent of the amount of 

13 any grant received under this paragraph. 

14 ‘‘(D) USE OF FUNDS.—Any grant amounts 

15 received by a community development financial 

16 institution under this paragraph— 

17 ‘‘(i) may not be used by such institu18 tion to provide direct loans to small busi19 nesses; 

20 ‘‘(ii) may be used by such institution 

21 to help recapture a portion or all of a de22 faulted loan made under the small business 

23 loan program of such institution on or 

24 after the date of the enactment of this sec25 tion; and 


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1 ‘‘(iii) may be used to designate and 

2 utilize a fiscal agent for services normally 

3 provided by such an agent. 

4 ‘‘(2) TECHNICAL ASSISTANCE GRANTS.— 

5 ‘‘(A) IN GENERAL.—The Fund shall make 

6 technical assistance grants to community devel7 opment financial institutions to create, support, 

8 or maintain a small business loan program. Any 

9 grant amounts received under this paragraph 

10 may be used for— 

11 ‘‘(i) technology, staff support, staff 

12 capacity building, and other costs associ13 ated with establishing, supporting, or 

14 maintaining a small business loan pro15 gram; and 

16 ‘‘(ii) establishing, supporting, or 

17 maintaining technical assistance programs 

18 for borrowers. 

19 ‘‘(B) APPLICATION.—A community devel20 opment financial institution that wishes to re21 ceive a grant under this paragraph shall submit 

22 an application to the Administrator in such 

23 form and manner and containing such informa24 tion as the Administrator may require. 


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1 ‘‘(c) REPORTS.—For each fiscal year for which 

2 grants are made under this section, the Administrator 

3 shall submit a report to the Committee on Financial Serv4 ices of the House of Representatives and the Committee 

5 on Banking, Housing, and Urban Affairs of the Senate 

6 containing a description of the activities funded and 

7 amounts distributed under this section for such fiscal year, 

8 as well as measurable results of such actions. 

9 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.— 

10 ‘‘(1) IN GENERAL.—There are authorized to be 

11 appropriated to the Fund $25,000,000 for each of 

12 fiscal years 2012 to 2017 to carry out this section. 

13 ‘‘(2) ADMINISTRATIVE COSTS.—There are au14 thorized to be appropriated to the Fund $5,000,000 

15 for each of fiscal years 2012 to 2017 for the admin16 istrative costs of carrying out this section. 

17 ‘‘(e) DEFINITIONS.—For purposes of this section: 

18 ‘‘(1) SMALL BUSINESS.—The term ‘small busi19 ness’ has the meaning given the term ‘small business 

20 concern’ under section 3(a) of the Small Business 

21 Act (15 U.S.C. 632(a)). 

22 ‘‘(2) SMALL BUSINESS LOAN PROGRAM.—The 

23 term ‘small business loan program’ means a loan 

24 program wherein a community development financial 

25 institution offers loans to small businesses that— 


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1 ‘‘(A) are made in amounts not exceeding 

2 $25,000; 

3 ‘‘(B) have no pre-payment penalty; and 

4 ‘‘(C) meet any other affordability require5 ments as may be established by the Adminis6 trator.’’. 

7 (b) CONFORMING AMENDMENT.—The table of con8 tents for the Riegle Community Development and Regu9 latory Improvement Act of 1994 is amended by inserting 

10 after the item relating to section 121 the following: 

‘‘Sec. 122. Grants to establish loan-loss reserve funds. 

‘‘Sec. 123. Grants to establish loan-loss reserve funds for small business lending.’’. 

Æ 


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