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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4255 Introduced in Senate (IS)]

<DOC>

116th CONGRESS
  2d Session
                                S. 4255

To amend the CARES Act to establish community investment programs, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 21, 2020

   Mr. Warner (for himself, Mr. Booker, Ms. Harris, and Mr. Schumer) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To amend the CARES Act to establish community investment programs, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Jobs and Neighborhood Investment 
Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to--
            (1) establish programs to revitalize and provide long-term 
        financial products and service availability for, and provide 
        investments in, low- and moderate-income and minority 
        communities;
            (2) respond to the unprecedented loss of Black-owned 
        businesses and unemployment; and
            (3) otherwise enhance the stability, safety and soundness 
        of community financial institutions that support low- and 
        moderate-income and minority communities.

SEC. 3. CONSIDERATIONS; REQUIREMENTS FOR CREDITORS.

    (a) In General.--In exercising the authorities under this Act and 
the amendments made by this Act, the Secretary of the Treasury shall 
take into consideration--
            (1) increasing the availability of affordable credit for 
        consumers, small businesses, and nonprofit organizations, 
        including for projects supporting affordable housing, 
        community-serving real estate, and other projects, that provide 
        direct benefits to low- and moderate-income communities, low-
        income and underserved individuals, and minorities;
            (2) providing funding to minority-owned or minority-led 
        eligible institutions and other eligible institutions that have 
        a strong track record of serving minority small businesses;
            (3) protecting and increasing jobs in the United States;
            (4) increasing the opportunity for small business, 
        affordable housing and community development in geographic 
        areas and demographic segments with poverty and high 
        unemployment rates that exceed the average in the United 
        States;
            (5) ensuring that all low- and moderate-income community 
        financial institutions may apply to participate in the programs 
        established under this Act and the amendments made by this Act, 
        without discrimination based on geography;
            (6) providing transparency with respect to use of funds 
        provided under this Act and the amendments made by this Act;
            (7) promoting and engaging in financial education to would-
        be borrowers; and
            (8) providing funding to eligible institutions that serve 
        consumers, small businesses, and nonprofit organizations to 
        support affordable housing, community-serving real estate, and 
        other projects that provide direct benefits to low- and 
        moderate-income communities, low-income individuals, and 
        minorities directly affected by the COVID-19 pandemic.
    (b) Requirement for Creditors.--Any creditor participating in a 
program established under this Act or the amendments made by this Act 
shall fully comply with all applicable statutory and regulatory 
requirements relating to fair lending.

SEC. 4. SENSE OF CONGRESS.

    It is the sense of Congress that the investments made by the 
Secretary of the Treasury under this Act and the amendments made by 
this Act should be designed to maximize the benefit to low- and 
moderate-income and minority communities and contemplate losses to 
capital of the Treasury.

SEC. 5. NEIGHBORHOOD INVESTMENT PROGRAMS.

    Title IV of the CARES Act (Public Law 116-136) is amended--
            (1) in section 4002 (15 U.S.C. 9041)--
                    (A) by redesignating paragraphs (7) through (10) as 
                paragraphs (8) through (11), respectively; and
                    (B) by inserting after paragraph (6) the following:
            ``(7) Low- and moderate-income community financial 
        institution.--The term `low- and moderate-income community 
        financial institution' means any financial institution that 
        is--
                    ``(A) a 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); or
                    ``(B) a minority depository institution, as defined 
                in section 308 of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 
                note), for which the majority of the community served 
                by the minority depository institution is minority, as 
                defined in such section.'';
            (2) in section 4003 (15 U.S.C. 9042), by adding at the end 
        the following:
    ``(i) Neighborhood Capital Investment Program.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `community development financial 
                institution' has the meaning given the term in section 
                103 of the Riegle Community Development and Regulatory 
                Improvement Act of 1994 (12 U.S.C. 4702);
                    ``(B) the term `Fund' means 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));
                    ``(C) the term `minority' means any Black American, 
                Native American, Hispanic American, or Asian American; 
                and
                    ``(D) the term `Program' means the Neighborhood 
                Capital Investment Program established under paragraph 
                (2).
            ``(2) Establishment.--The Secretary shall establish a 
        Neighborhood Capital Investment Program to support low- and 
        moderate-income community financial institutions to provide 
        loans and forbearance to borrowers in low- and moderate-income 
        communities, especially for borrowers who are historically 
        disadvantaged, including minorities, and borrowers in rural and 
        urban low-income and underserved communities.
            ``(3) Investments.--Under the Program, the Secretary shall 
        establish a fund to facilitate direct capital investments, 
        including purchases and modifications of those purchases, of 
        senior preferred non-voting stock, subordinated debentures, and 
        other financial instruments (including equity equivalent 
        capital and secondary capital investments described in section 
        216(o)(2)(C) of the Federal Credit Union Act (12 U.S.C. 
        1790d(o)(2)(C)) from low- and moderate-income community 
        financial institutions on such terms as are determined by the 
        Secretary in accordance with this subtitle.
            ``(4) Application.--
                    ``(A) Acceptance.--The Secretary shall begin 
                accepting applications for capital investments under 
                the Program not later than the end of the 30-day period 
                beginning on the date of enactment of this subsection, 
                with priority in distribution given to low- and 
                moderate-income community financial institutions that 
                are minority-owned or minority-led lenders.
                    ``(B) Requirement to provide a neighborhood 
                investment lending plan.--
                            ``(i) In general.--At the time that an 
                        applicant submits an application to the 
                        Secretary for a capital investment under the 
                        Program, the applicant shall provide the 
                        Secretary, along with the appropriate Federal 
                        banking agency, an investment and lending plan 
                        that--
                                    ``(I) demonstrates that not less 
                                than 30 percent of the lending of the 
                                applicant over the past 2 fiscal years 
                                was made directly to low- and moderate 
                                income borrowers, to borrowers that 
                                create direct benefits for low- and 
                                moderate-income populations, to other 
                                targeted populations as defined by the 
                                Fund, or any combination thereof, as 
                                measured by the total number and dollar 
                                amount of loans;
                                    ``(II) describes how the business 
                                strategy and operating goals of the 
                                applicant will address community 
                                development needs, which includes the 
                                needs of small businesses, consumers, 
                                nonprofit organizations, community 
                                development, and other projects 
                                providing direct benefits to low- and 
                                moderate-income communities, low-income 
                                individuals, and minorities within the 
                                minority, rural, and urban low-income 
                                and underserved areas served by the 
                                applicant;
                                    ``(III) includes a plan to provide 
                                linguistically and culturally 
                                appropriate outreach, where 
                                appropriate;
                                    ``(IV) includes an attestation by 
                                the applicant that the applicant does 
                                not own, service, or offer any 
                                financial products at an annual 
                                percentage rate of more than 36 percent 
                                interest, as defined in section 
                                987(i)(4) of title 10, United States 
                                Code, and is compliant with State 
                                interest rate laws; and
                                    ``(V) includes details on how the 
                                applicant plans to expand or maintain 
                                significant lending or investment 
                                activity in low- or moderate-income 
                                minority communities, to historically 
                                disadvantaged borrowers, and to 
                                minorities that have significant unmet 
                                capital or financial services needs.
                            ``(ii) Community development loan funds.--
                        An applicant that is not an insured community 
                        development financial institution or otherwise 
                        regulated by a Federal financial regulator 
                        shall submit the plan described in clause (i) 
                        only to the Secretary.
                            ``(iii) Documentation.--In the case of an 
                        applicant that is certified as a community 
                        development financial institution as of the 
                        date of enactment of this subsection, for 
                        purposes of clause (i)(I), the Secretary may 
                        rely on documentation submitted the Fund as 
                        part of certification compliance reporting.
            ``(5) Incentives to increase lending and provide affordable 
        credit.--
                    ``(A) Requirements on preferred stock and other 
                financial instrument.--Any financial instrument issued 
                to Treasury by a low- and moderate-income community 
                financial institution under the Program shall provide 
                the following:
                            ``(i) No dividends, interest or other 
                        payments shall exceed 2 percent per annum.
                            ``(ii) After the first 24 months from the 
                        date of the capital investment under the 
                        Program, annual payments may be required, as 
                        determined by the Secretary and in accordance 
                        with this section, and adjusted downward based 
                        on the amount of affordable credit provided by 
                        the low- and moderate-income community 
                        financial institution to borrowers in minority, 
                        rural, and urban low-income and underserved 
                        communities.
                            ``(iii) During any calendar quarter after 
                        the initial 24-month period referred to in 
                        clause (ii), the annual payment rate of a low- 
                        and moderate-income community financial 
                        institution shall be adjusted downward to 
                        reflect the following schedule, based on 
                        lending by the institution relative to the 
                        baseline period:
                                    ``(I) If the institution in the 
                                most recent annual period prior to the 
                                investment provides significant lending 
                                or investment activity in low- or 
                                moderate-income minority communities, 
                                historically disadvantaged borrowers, 
                                and to minorities that have significant 
                                unmet capital or financial services, 
                                the annual payment rate shall not 
                                exceed 0.5 percent per annum.
                                    ``(II) If the amount of lending 
                                within minority, rural, and urban low-
                                income and underserved communities and 
                                to low- and moderate-income borrowers 
                                has increased dollar for dollar based 
                                on the amount of the capital 
                                investment, the annual payment rate 
                                shall not exceed 1 percent per annum.
                                    ``(III) If the amount of lending 
                                within minority, rural, and urban low-
                                income and underserved communities and 
                                to low- and moderate-income borrowers 
                                has increased by twice the amount of 
                                the capital investment, the annual 
                                payment rate shall not exceed 0.5 
                                percent per annum.
                    ``(B) Contingency of payments based on certain 
                financial criteria.--
                            ``(i) Deferral.--Any annual payments under 
                        this subsection shall be deferred in any 
                        quarter or payment period if any of the 
                        following is true:
                                    ``(I) The low- and moderate-income 
                                community institution fails to meet the 
                                Tier 1 capital ratio or similar ratio 
                                as determined by the Secretary.
                                    ``(II) The low- and moderate-income 
                                community financial institution fails 
                                to achieve positive net income for the 
                                quarter or payment period.
                                    ``(III) The low- and moderate-
                                income community financial institution 
                                determines that the payment would be 
                                detrimental to the financial health of 
                                the institution.
                            ``(ii) Testing during next payment 
                        period.--Any deferred annual payment under this 
                        subsection shall be tested against the metrics 
                        described in clause (i) at the beginning of the 
                        next payment period, and such payments shall 
                        continue to be deferred until the metrics 
                        described in that clause are no longer 
                        applicable.
            ``(6) Restrictions.--
                    ``(A) In general.--Each low- and moderate-income 
                community financial institution may only issue 
                financial instruments or senior preferred stock under 
                this subsection with an aggregate principal amount that 
                is--
                            ``(i) not more than 15 percent of risk-
                        weighted assets for an institution with assets 
                        of more than $2,000,000,000;
                            ``(ii) not more than 25 percent of risk-
                        weighted assets for an institution with assets 
                        of not less than $500,000,000 and not more than 
                        $2,000,000,000; and
                            ``(iii) not more than 30 percent of risk-
                        weighted assets for an institution with assets 
                        of less than $500,000,000.
                    ``(B) Holding of instruments.--Holding any 
                instrument of a low- and moderate-income community 
                financial institution described in subparagraph (A) 
                shall not give the Treasury or any successor that owns 
                the instrument any rights over the management of the 
                institution.
                    ``(C) Sale of interest.--With respect to a capital 
                investment made into a low- and moderate-income 
                community financial institution under this subsection, 
                the Secretary--
                            ``(i) except as provided in clause (iv), 
                        during the 10-year period following the 
                        investment, may not sell the interest of the 
                        Secretary in the capital investment to a third 
                        party;
                            ``(ii) shall provide the low- and moderate-
                        income community financial institution a right 
                        of first refusal to buy back the investment 
                        under terms that do not exceed a value as 
                        determined by an independent third party; and
                            ``(iii) shall not sell more than a 5 
                        percent ownership interest in the capital 
                        investment to a single third party; and
                            ``(iv) with the permission of the 
                        institution, may gift or sell the interest of 
                        the Secretary in the capital investment for a 
                        de minimus amount to--
                                    ``(I) a mission aligned nonprofit 
                                affiliate of an applicant that is an 
                                insured 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); or
                                    ``(II) 1 or more mission-aligned 
                                nonprofit organizations selected by the 
                                institution that are not affiliated 
                                with the institution.
                            ``(v) Calculation of ownership for minority 
                        depository institutions.--The calculation and 
                        determination of ownership thresholds for a 
                        depository institution to qualify as a minority 
                        depository institution described in section 
                        4002(7)(B) shall exclude any dilutive effect of 
                        equity investments by the Federal Government, 
                        including under the Program or through the 
                        Fund.
            ``(7) Available amounts.--In carrying out the Program, the 
        Secretary shall use such sums as may be necessary, but not less 
        than $7,000,000,000, from amounts made available under 
        subsection (b), notwithstanding the limitations on the use of 
        such funds under paragraphs (1) through (4) of such subsection 
        (b).
            ``(8) Treatment of capital investments.--Any capital 
        investment under the Program shall receive Tier 1 capital 
        treatment, as defined by the Federal Financial Institutions 
        Examination Council, or shall be treated as a secondary capital 
        investment described in section 216(o)(2)(C) of the Federal 
        Credit Union Act (12 U.S.C. 1790d(o)(2)(C)).
            ``(9) Outreach to minorities.--The Secretary shall require 
        low- and moderate-income community financial institutions 
        receiving capital investments under the Program to provide 
        linguistically and culturally appropriate outreach and 
        advertising describing the availability and application process 
        of receiving loans made possible by the Program through 
        organizations, trade associations, and individuals that 
        represent or work within or are members of minority 
        communities.
            ``(10) Inapplicability of restrictions.--The restrictions 
        and limitations described in subparagraphs (E) and (F) of 
        paragraph (2) and paragraph (3)(A)(ii) of subsection (c) of 
        section 4003 and in section 4004 shall not apply to the 
        Program.
            ``(11) Termination of investment authority.--The authority 
        to make capital investments in low- and moderate-income 
        community financial institutions, including commitments to 
        purchase preferred stock or other instruments, provided under 
        the Program shall terminate on the date that is 36 months after 
        the date of enactment of this subsection.
            ``(12) Collection of data.--Notwithstanding the Equal 
        Opportunity Credit Act (15 U.S.C. 1691 et seq.)--
                    ``(A) any low- and moderate-income community 
                financial institution may collect data described in 
                section 701(a)(1) of that Act (15 U.S.C. 1691(a)(1)) 
                from borrowers and applicants for credit for the 
                purpose of monitoring compliance under the plan 
                required under paragraph (4)(B); and
                    ``(B) a low- and moderate-income community 
                financial institution that collects the data described 
                in subparagraph (A) shall not be subject to adverse 
                action related to that collection by the Bureau of 
                Consumer Financial Protection or any other Federal 
                agency.
            ``(13) Deposit of funds.--All funds received by the 
        Secretary in connection with purchases made pursuant this 
        subsection, including interest payments, dividend payments, and 
        proceeds from the sale of any financial instrument, shall be 
        deposited into the Fund and used to provide financial and 
        technical assistance pursuant to section 108 of the Riegle 
        Community Development and Regulatory Improvement Act of 1994 
        (12 U.S.C. 4707), except that subsection (e) of that section 
        shall be waived.''.
    ``(j) Neighborhood Loan Program.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `financial institution' means any 
                entity regulated by the Comptroller of the Currency, 
                the Board of Governors of the Federal Reserve System, 
                or the Federal Deposit Insurance Corporation;
                    ``(B) the term `intermediary' means any entity 
                engaged in aggregating loans originated by low- and 
                moderate-income community financial institutions; and
                    ``(C) the term `Program' means the Neighborhood 
                Loan Program established under paragraph (2).
            ``(2) Establishment.--The Secretary, in conjunction with 
        the Board of Governors of the Federal Reserve System, shall 
        establish a Neighborhood Loan Program to create facilities 
        under section 13(3) of the Federal Reserve Act (12 U.S.C. 
        343(3)) to provide liquidity and encourage equity equivalent 
        capital investments for low- and moderate-income community 
        financial institutions serving low- and moderate-income and 
        minority communities.
            ``(3) Minimization of burden.--Any guidance, regulations, 
        frequently asked question, or other written or verbal 
        communications provided by the Secretary or the Board of 
        Governors of the Federal Reserve System in connection with the 
        Program shall be designed to minimize any burden to the 
        relevant low- and moderate-income community financial 
        institution and to ensure that the Program is actively utilized 
        by the low- and moderate-income community financial institution 
        for which the Program is being created.
            ``(4) Small business community loan participations.--
                    ``(A) In general.--The facilities created under 
                paragraph (2) shall purchase 90 percent of the balance 
                of eligible small business loans described in 
                subparagraph (B), either directly from low- and 
                moderate-income community financial institutions, or 
                from intermediaries, to increase access to credit and 
                build wealth in low- and moderate-income and minority 
                communities.
                    ``(B) Criteria for eligible small business loans.--
                An eligible small business loan described in this 
                subparagraph shall have--
                            ``(i) a maximum loan balance of $250,000;
                            ``(ii) reasonable loan origination and 
                        service fees; and
                            ``(iii) other terms as prescribed by the 
                        Secretary.
                    ``(C) Eligibility.--To be eligible under 
                subparagraph (A), a low- and moderate-income community 
                financial institution shall hold not less than 10 
                percent of each eligible small business loan described 
                in subparagraph (B), or 10 percent of the loans as 
                represented in a loan pool described in subparagraph 
                (D).
                    ``(D) Loan pool.--Each loan pool described in 
                subparagraph (A)--
                            ``(i) shall be composed of not less than 50 
                        loans that amount to not less than $1,000,000;
                            ``(ii) shall be originated by a low- and 
                        moderate-income community financial institution 
                        for a commercially reasonable fee charged by 
                        the facility created under the Program;
                            ``(iii) shall be serviced by a low- and 
                        moderate-income community financial institution 
                        for a commercially reasonable fee charged by a 
                        facility created under the Program; and
                            ``(iv) shall be representative of the risk 
                        in the total loan portfolio of the low- and 
                        moderate-income community financial 
                        institution.
                    ``(E) Prioritization.--Low- and moderate-income 
                community financial institutions shall prioritize the 
                purchase of eligible small business loans described in 
                subparagraph (B) that are made to minority-owned small 
                businesses.
            ``(5) Equity equivalent loan participations.--
                    ``(A) In general.--The facilities created under 
                paragraph (2) shall purchase 90 percent participations 
                in loans made by financial institutions to low- and 
                moderate-income community financial institutions that 
                meet the eligibility requirements in this paragraph.
                    ``(B) Eligibility.--To be eligible under 
                subparagraph (A), a financial institution shall retain 
                not less than 10 percent of each loan described in 
                subparagraph (C).
                    ``(C) Loans.--A loan described in this subparagraph 
                shall be--
                            ``(i) for not more than $10,000,000;
                            ``(ii) originated after March 15, 2020;
                            ``(iii) serviced by a financial 
                        institution; and
                            ``(iv) treated as an equity equivalent 
                        investment, as defined by the Comptroller of 
                        the Currency, the Board of Governors of the 
                        Federal Reserve System, or the Federal Deposit 
                        Insurance Corporation.
            ``(6) Application date.--The Secretary shall begin 
        accepting applications under the Program not later than the end 
        of the 30-day period beginning on the date of enactment of this 
        subsection.
            ``(7) Inapplicability of restrictions.--The restrictions 
        and limitations described in subparagraphs (E) and (F) of 
        paragraph (2) and paragraph (3)(A)(ii) of subsection (b) of 
        section 4003 and in section 4004 shall not apply to the 
        Program.
            ``(8) Available amounts.--In carrying out the Program, the 
        Secretary shall use such sums as may be necessary, but not less 
        than $8,000,000,000, from amounts made available under 
        paragraph (4) of subsection (b), notwithstanding the 
        limitations on the use of such funds under that paragraph.
            ``(9) Termination.--The Program shall terminate on the date 
        that is 48 months after the date of enactment of this 
        subsection.
    ``(k) Application of the Military Lending Act.--
            ``(1) In general.--No low- and moderate-income community 
        financial institution that receives an equity investment under 
        subsection (i) or sells a loan participation under subsection 
        (j) shall, for so long as the investment or participation 
        continues, make any loan at an annualized percentage rate above 
        36 percent, as determined in accordance with section 987(b) of 
        title 10, United States Code (commonly known as the `Military 
        Lending Act)'.
            ``(2) No exemptions permitted.--The exemption authority of 
        the Bureau under section 105(f) of the Truth in Lending Act (15 
        U.S.C. 1604(f)) shall not apply with respect to this 
        subsection.''.

SEC. 6. SUPPORTING THE CDFI FUND.

    (a) Appropriations.--Of the amounts made available to the Secretary 
of the Treasury under section 4027 of the CARES Act (Public Law 116-
136), $2,900,000,000 shall be made available to the Fund to carry out 
this section.
    (b) Set Asides.--Of the amounts made available under subsection 
(a), the following amounts shall be set aside:
            (1) Up to $1,000,000,000, to remain available until 
        September 30, 2021, to support, prepare for, and respond to the 
        economic impact of the coronavirus, provided that the Fund 
        shall--
                    (A) provide grants funded under this paragraph 
                using a formula that takes into account criteria such 
                as certification status, financial and compliance 
                performance, portfolio and balance sheet strength, a 
                diversity of CDFI business model types, and program 
                capacity, of which not less than $25,000,000 may be for 
                grants to benefit Native American, Native Hawaiian, and 
                Alaska Native communities; and
                    (B) make funds available under this paragraph not 
                later than 60 days after the date of enactment of this 
                Act.
            (2) Up to $1,000,000,000, to remain available until 
        expended, to provide grants to CDFIs--
                    (A) to expand lending or investment activity in 
                low- or moderate-income minority communities and to 
                minorities that have significant unmet capital or 
                financial services needs; and
                    (B) using a formula that takes into account 
                criteria such as certification status, financial and 
                compliance performance, portfolio and balance sheet 
                strength, a diversity of CDFI business model types, and 
                program capacity, as well as experience making loans 
                and investments to those areas and populations 
                identified in this paragraph.
            (3) Up to $400,000,000, to remain available until expended, 
        for technical assistance, technology, and training under 
        sections 108(a)(1)(B) and 109, respectively, of the Riegle 
        Community Development and Regulatory Improvement Act of 1994 
        (12 U.S.C. 4707(a)(1)(B), 4708), with a preference for 
        minority-led and minority-owned CDFIs that primarily serve low- 
        and moderate-income communities.
            (4) Up to $500,000,000, to remain available until expended, 
        to provide grants to recipients that are minority-led and 
        minority-owned CDFIs.
    (c) Administrative Expenses.--Funds made available under this 
section may be used for administrative expenses, including 
administration of Fund programs and the New Markets Tax Credit Program 
under section 45D of the Internal Revenue Code.
    (d) Emergency Designation.--
            (1) In general.--The amounts provided under this section 
        are designated as an emergency requirement pursuant to section 
        4(g) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 
        933(g)).
            (2) Designation in senate.--In the Senate, this section is 
        designated as an emergency requirement pursuant to section 
        4112(a) of H. Con. Res. 71 (115th Congress), the concurrent 
        resolution on the budget for fiscal year 2018.
    (e) Definitions.--In this section:
            (1) CDFI.--The term ``CDFI'' means a 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).
            (2) Fund.--The term ``Fund'' means 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)).
            (3) Minority.--The term ``minority'' means any Black 
        American, Native American, Hispanic American, or Asian 
        American.

SEC. 7. FEDERAL DEPOSITS IN MINORITY DEPOSITORY INSTITUTIONS.

    (a) In General.--Section 308 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended 
by adding at the end the following:
    ``(d) Federal Deposits.--The Secretary of the Treasury shall ensure 
that deposits made by Federal agencies in minority depository 
institutions are fully collateralized or fully insured, as determined 
by the Secretary. Such deposits shall include reciprocal deposits as 
defined in section 337.6(e)(2)(v) of title 12, Code of Federal 
Regulations (as in effect on March 6, 2019).''.
    (b) Technical Amendments.--Section 308 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
1463 note) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``section--'' and inserting ``section:''; and
            (2) in the paragraph heading for paragraph (1), by striking 
        ``financial'' and inserting ``depository''.

SEC. 8. MINORITY BANK DEPOSIT PROGRAM.

    (a) In General.--Section 1204 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note) is amended 
to read as follows:

``SEC. 1204. EXPANSION OF USE OF MINORITY BANKS AND MINORITY CREDIT 
              UNIONS.

    ``(a) Minority Bank Deposit Program.--
            ``(1) Establishment.--There is established a program to be 
        known as the `Minority Bank Deposit Program' to expand the use 
        of minority banks and minority credit unions.
            ``(2) Administration.--The Secretary of the Treasury, 
        acting through the Fiscal Service, shall--
                    ``(A) on application by a depository institution or 
                credit union, certify whether such depository 
                institution or credit union is a minority bank or 
                minority credit union;
                    ``(B) maintain and publish a list of all depository 
                institutions and credit unions that have been certified 
                pursuant to subparagraph (A); and
                    ``(C) periodically distribute the list described in 
                subparagraph (B) to--
                            ``(i) all Federal departments and agencies;
                            ``(ii) interested State and local 
                        governments; and
                            ``(iii) interested private sector 
                        companies.
            ``(3) Inclusion of certain entities on list.--A depository 
        institution or credit union that, on the date of the enactment 
        of this section, has a current certification from the Secretary 
        of the Treasury stating that such depository institution or 
        credit union is a minority bank or minority credit union shall 
        be included on the list described under paragraph (2)(B).
    ``(b) Expanded Use Among Federal Departments and Agencies.--
            ``(1) In general.--Not later than 1 year after the 
        establishment of the program described in subsection (a), the 
        head of each Federal department or agency shall develop and 
        implement standards and procedures to ensure, to the maximum 
        extent possible as permitted by law, the use of minority banks 
        and minority credit unions to serve the financial needs of each 
        such department or agency.
            ``(2) Report to congress.--Not later than 2 years after the 
        establishment of the program described in subsection (a), and 
        annually thereafter, the head of each Federal department or 
        agency shall submit to Congress a report on the actions taken 
        to increase the use of minority banks and minority credit 
        unions to serve the financial needs of each such department or 
        agency.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Credit union.--The term `credit union' has the 
        meaning given the term `insured credit union' in section 101 of 
        the Federal Credit Union Act (12 U.S.C. 1752).
            ``(2) Depository institution.--The term `depository 
        institution' has the meaning given the term `insured depository 
        institution' in section 3 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813).
            ``(3) Minority.--The term `minority' means any Black 
        American, Native American, Hispanic American, or Asian 
        American.
            ``(4) Minority bank.--The term `minority bank' means a 
        minority depository institution as defined in section 308 of 
        this Act.
            ``(5) Minority credit union.--The term `minority credit 
        union' means any credit union for which more than 50 percent of 
        the membership (including board members) of such credit union 
        are minority individuals, as determined by the National Credit 
        Union Administration pursuant to section 308 of this Act.''.
    (b) Conforming Amendments.--The following provisions are amended by 
striking ``1204(c)(3)'' and inserting ``1204(c)'':
            (1) Section 808(b)(3) of the Community Reinvestment Act of 
        1977 (12 U.S.C. 2907(b)(3)).
            (2) Section 40(g)(1)(B) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1831q(g)(1)(B)).
            (3) Section 704B(h)(4) of the Equal Credit Opportunity Act 
        (15 U.S.C. 1691c-2(h)(4)).

SEC. 9. INVESTMENTS IN MINORITY DEPOSITORY INSTITUTIONS.

    (a) Control for Insured Depository Institutions.--Section 
7(j)(8)(B) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(j)(8)(B)) is amended to read as follows:
            ``(B) `control' means the power, directly or indirectly--
                    ``(i) to direct the management or policies of an 
                insured depository institution; or
                    ``(ii) of a person to vote 25 per centum or more of 
                any class of voting securities of an insured depository 
                institution.''.
    (b) Rulemaking.--The appropriate Federal banking agency (as defined 
in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) 
shall jointly issue rules for de novo minority depository institutions 
to allow 3 years to meet the capital requirements otherwise applicable 
to minority depository institutions.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the appropriate Federal banking agencies (as defined in 
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall 
jointly submit to Congress a report on--
            (1) the principal causes for the low number of de novo 
        minority depository institutions during the 10-year period 
        preceding the date of the report;
            (2) the main challenges to the creation of de novo minority 
        depository institutions; and
            (3) regulatory and legislative considerations to promote 
        the establishment of de novo minority depository institutions.

SEC. 10. CUSTODIAL DEPOSIT PROGRAM FOR COVERED MINORITY DEPOSITORY 
              INSTITUTIONS.

    (a) Establishment.--The Secretary of the Treasury shall establish a 
custodial deposit program (in this section referred to as the 
``Program'') under which a covered bank shall receive monthly deposits 
from a qualifying account.
    (b) Application.--A covered bank shall submit to the Secretary an 
application to participate in the Program at such time, in such manner, 
and containing such information as the Secretary may determine.
    (c) Program Operations.--
            (1) Designation of custodial entities.--The Secretary shall 
        designate eligible custodial entities to make monthly deposits 
        with covered banks selected for participation in the Program on 
        behalf of a qualifying account.
            (2) Custodial accounts.--
                    (A) In general.--The Secretary shall establish a 
                custodial deposit account for each qualifying account 
                with the eligible custodial entity designated to make 
                deposits with covered banks for each such qualifying 
                account.
                    (B) Amount.--The Secretary shall deposit a total 
                amount not greater than 5 percent of a qualifying 
                account into any custodial deposit accounts established 
                under subparagraph (A).
                    (C) Deposits with program participants.--
                            (i) Monthly deposits.--Each month, each 
                        eligible custodial entity designated by the 
                        Secretary shall deposit an amount not greater 
                        than the insured amount, in the aggregate, from 
                        each custodial deposit account, in a single 
                        covered bank.
                            (ii) Limitation.--With respect to the funds 
                        of an individual qualifying account, the 
                        eligible custodial entity may not deposit an 
                        amount greater than the insured amount in a 
                        single covered bank.
                            (iii) Insured amount defined.--In this 
                        subparagraph, the term ``insured amount'' means 
                        the amount that is the greater of--
                                    (I) the standard maximum deposit 
                                insurance amount (as defined in section 
                                11(a)(1)(E) of the Federal Deposit 
                                Insurance Act (12 U.S.C. 
                                1821(a)(1)(E))); or
                                    (II) such higher amount negotiated 
                                between the Secretary and the 
                                Corporation under which the Corporation 
                                will insure all deposits of such higher 
                                amount.
                    (D) Limitations.--The total amount of funds 
                deposited under the Program in a covered bank may not 
                exceed the lesser of--
                            (i) 10 percent of the average amount of 
                        deposits held by such covered bank in the 
                        previous quarter; or
                            (ii) $100,000,000.
            (3) Interest.--
                    (A) In general.--Each eligible custodial entity 
                designated by the Secretary shall--
                            (i) collect interest from each covered bank 
                        in which such custodial entity deposits funds 
                        pursuant to paragraph (2); and
                            (ii) disburse such interest to the 
                        Secretary each month.
                    (B) Interest rate.--The rate of any interest 
                collected under this paragraph may not exceed 50 
                percent of the discount window primary credit interest 
                rate most recently published on the Federal Reserve 
                Statistical Release on selected interest rates (daily 
                or weekly), commonly referred to as the H.15 release 
                (commonly known as the ``Federal funds rate'').
            (4) Statements.--Each eligible custodial entity designated 
        by the Secretary shall submit to the Secretary monthly 
        statements that include the total amount of funds deposited 
        with, and interest rate received from, each covered bank by the 
        eligible custodial entity on behalf of qualifying entities.
            (5) Records.--The Secretary shall issue a quarterly report 
        to Congress and make publicly available a record identifying 
        all covered banks participating in the Program and amounts 
        deposited under the Program in covered banks.
    (d) Requirements Relating to Deposits.--Deposits made with covered 
banks under this section may not--
            (1) be considered by the Corporation to be funds obtained, 
        directly or indirectly, by or through any deposit broker for 
        deposit into 1 or more deposit accounts (as described under 
        section 29 of the Federal Deposit Insurance Act (12 U.S.C. 
        1831f)); or
            (2) be subject to insurance fees from the Corporation that 
        are greater than insurance fees for typical demand deposits not 
        obtained, directly or indirectly, by or through any deposit 
        broker (commonly known as ``core deposits'').
    (e) Modifications.--
            (1) In general.--The Secretary shall provide a 3-month 
        period for public notice and comment before making any material 
        change to the operation of the Program.
            (2) Exception.--The requirements of paragraph (1) shall not 
        apply if the Secretary makes a material change to the Program 
        to comply with safety and soundness standards or other law.
    (f) Termination.--
            (1) By covered bank.--A covered bank selected for 
        participation in the Program pursuant to subsection (c) may 
        terminate participation in the Program by providing the 
        Secretary a notification 60 days prior to termination.
            (2) By secretary.--The Secretary may terminate the 
        participation of a covered bank in the Program if the Secretary 
        determines the covered bank--
                    (A) violated any terms of participation in the 
                Program;
                    (B) failed to comply with Federal bank secrecy 
                laws, as documented in writing by the primary regulator 
                of the covered bank;
                    (C) failed to remain well capitalized; or
                    (D) failed comply with safety and soundness 
                standards, as documented in writing by the primary 
                regulator of the covered bank.
    (g) Definitions.--In this section:
            (1) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (2) Covered bank.--The term ``covered bank'' means a 
        minority depository institution that is regulated by the 
        Corporation or the National Credit Union Administration that is 
        well capitalized (as defined in section 38(b) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1831o(b))).
            (3) Eligible custodial entity.--The term ``eligible 
        custodial entity'' means--
                    (A) an insured depository institution (as defined 
                in section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813));
                    (B) an insured credit union (as defined in section 
                101 of the Federal Credit Union Act (12 U.S.C. 1752)); 
                or
                    (C) a well capitalized State-chartered trust 
                company,
        designated by the Secretary under subsection (c)(1).
            (4) Federal bank secrecy laws.--The term ``Federal bank 
        secrecy laws'' means--
                    (A) section 21 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1829b);
                    (B) section 123 of Public Law 91-508; and
                    (C) subchapter II of chapter 53 of title 31, United 
                States Code.
            (5) Qualifying account.--The term ``qualifying account'' 
        means any account established in the Department of the Treasury 
        that--
                    (A) is controlled by the Secretary; and
                    (B) is expected to maintain a balance greater than 
                $200,000,000 for the following calendar month.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (7) Well capitalized.--The term ``well capitalized'' has 
        the meaning given in section 38 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1831o).

SEC. 11. ESTABLISHMENT OF FINANCIAL AGENT PARTNERSHIP PROGRAM.

    (a) In General.--Section 308 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended 
by adding at the end the following:
    ``(d) Financial Agent Partnership Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Financial agent.--The term `financial agent' 
                means any national banking association designated by 
                the Secretary to be employed as a financial agent of 
                the Government.
                    ``(B) Large financial institution.--The term `large 
                financial institution' means any entity regulated by 
                the Comptroller of the Currency, the Board of Governors 
                of the Federal Reserve System, the Federal Deposit 
                Insurance Corporation, or the National Credit Union 
                Administration that has total consolidated assets of 
                not less than $50,000,000,000.
                    ``(C) Small community financial institution.--The 
                term `small community financial institution' means any 
                financial institution that--
                            ``(i) has total consolidated assets of less 
                        than $3,000,000,000;
                            ``(ii) is an entity regulated by the 
                        Comptroller of the Currency, the Board of 
                        Governors of the Federal Reserve System, the 
                        Federal Deposit Insurance Corporation, or the 
                        National Credit Union Administration; and
                            ``(iii) is--
                                    ``(I) a 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); or
                                    ``(II) a minority depository 
                                institution, as defined in subsection 
                                (b).
                    ``(D) Program.--The term `Program' means the 
                Financial Agent Partnership Program established under 
                paragraph (2).
                    ``(E) Secretary.--The term `Secretary' means the 
                Secretary of the Treasury.
            ``(2) Establishment.--The Secretary shall establish a 
        program to be known as the Financial Agent Partnership Program 
        under which a financial agent designated by the Secretary or a 
        large financial institution may serve as a partner, under 
        guidance or regulations prescribed by the Secretary, and at the 
        request of a small community financial institution, to allow 
        the small community financial institution--
                    ``(A) to be prepared to perform as a financial 
                agent;
                    ``(B) to improve capacity to provide services to 
                the customers of the institution; and
                    ``(C) to participate in contracts awarded by the 
                Secretary under the National Bank Acts of 1863 and 
                1864.
            ``(3) Financial partnerships.--
                    ``(A) In general.--Any large financial institution 
                participating in a program with the Treasury, if not 
                already required to include a small community financial 
                institution, shall offer not more than 5 percent of 
                every contract under that program to a small community 
                financial institution.
                    ``(B) Acceptance of risk.--As a requirement of 
                participation in any financial arrangement under the 
                Program, a small community financial institution shall 
                accept the risk of the transaction equivalent to the 
                percentage of any fee the institution receives under 
                the Program.
                    ``(C) Partner.--A large financial institution 
                partner may work with small community financial 
                institutions, if necessary, to train professionals to 
                understand any risks involved in a contract under the 
                Program.
            ``(4) Outreach.--The Secretary shall--
                    ``(A) issue guidance or regulations to establish a 
                process under which a financial agent, large financial 
                institution, or small community financial institution 
                may participate in the Program; and
                    ``(B) not less frequently than once per year, hold 
                outreach events to promote the participation of 
                financial agents, large financial institutions, and 
                small community financial institutions in the Program.
            ``(5) Report.--The Office of Minority and Women Inclusion 
        of the Department of the Treasury shall include in the report 
        submitted to Congress under section 342(e) of the Dodd-Frank 
        Wall Street Reform and Consumer Protection Act (12 U.S.C. 
        5452(e)) information pertaining to the Program, including--
                    ``(A) the number of financial agents, large 
                financial institutions, and small community financial 
                institutions participating in the Program; and
                    ``(B) the number of contracts awarded by the 
                Secretary where a small community financial institution 
                participated in a financial agent agreement awarded to 
                a large financial institution; and
                    ``(C) the number of outreach events described in 
                paragraph (4) held during the year covered by such 
                report.''.
    (b) Effective Date.--This section and the amendments made by this 
section shall take effect 90 days after the date of the enactment of 
this Act.

SEC. 12. APPLICATION OF CARES ACT TO LOW- AND MODERATE-INCOME COMMUNITY 
              FINANCIAL INSTITUTIONS.

    Title IV of the CARES Act (Public Law 116-136) is amended--
            (1) in section 4012(b)--
                    (A) in paragraph (2), by striking ``The interim'' 
                and inserting ``Except as provided in paragraph (3), 
                the interim''; and
                    (B) by adding at the end the following:
            ``(3) Exception for low- and moderate-income community 
        financial institutions.--Notwithstanding paragraph (2), with 
        respect to a qualifying community bank that is a low- and 
        moderate-income community financial institution, the interim 
        rule issued under paragraph (1) shall be effective during the 
        period beginning on the date on which the appropriate Federal 
        banking agencies issue the rule and ending on December 31, 
        2022.''; and
            (2) in section 4013(a)(1)--
                    (A) by striking ``means the period'' and inserting 
                ``means--
                    ``(A) except as provided in subparagraph (B), the 
                period'';
                    (B) in subparagraph (A), as so designated, by 
                striking the period at the end and inserting ``; and''; 
                and
                    (C) by adding at the end the following:
                    ``(B) with respect to a low- and moderate-income 
                community financial institution, the period beginning 
                on March 1, 2020, and ending on December 31, 2022.''.

SEC. 13. SUBMISSION OF DATA RELATING TO DIVERSITY BY COMMUNITY 
              DEVELOPMENT FINANCIAL INSTITUTIONS.

    Section 104 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4703) is amended by adding at the 
end the following:
    ``(l) Submission of Data Relating to Diversity.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `executive officer' has the meaning 
                given the term in section 230.501(f) of title 17, Code 
                of Federal Regulations, as in effect on the date of 
                enactment of this subsection; and
                    ``(B) the term `veteran' has the meaning given the 
                term in section 101 of title 38, United States Code.
            ``(2) Submission of disclosure.--Each Fund applicant and 
        recipient shall provide the following:
                    ``(A) Data, based on voluntary self-identification, 
                on the racial, ethnic, and gender composition of--
                            ``(i) the board of directors of the 
                        institution;
                            ``(ii) nominees for the board of directors 
                        of the institution; and
                            ``(iii) the executive officers of the 
                        institution.
                    ``(B) The status of any member of the board of 
                directors of the institution, any nominee for the board 
                of directors of the institution, or any executive 
                officer of the institution, based on voluntary self-
                identification, as a veteran.
                    ``(C) Whether the board of directors of the 
                institution, or any committee of that board of 
                directors, has, as of the date on which the institution 
                makes a disclosure under this paragraph, adopted any 
                policy, plan, or strategy to promote racial, ethnic, 
                and gender diversity among--
                            ``(i) the board of directors of the 
                        institution;
                            ``(ii) nominees for the board of directors 
                        of the institution; or
                            ``(iii) the executive officers of the 
                        institution.
            ``(3) Annual report.--Not later than 18 months after the 
        date of enactment of this subsection, and annually thereafter, 
        the Fund 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, and make publicly 
        available on the website of the Fund, a report on the data and 
        trends of the diversity information made available pursuant to 
        paragraph (2).''.

SEC. 14. REPORTS.

    The Secretary shall provide to the appropriate committees of 
Congress--
            (1) within 30 days of the end of each month commencing with 
        the first month in which transactions are made under a program 
        established under this Act or the amendments made by this Act, 
        a written report describing all of the transactions made during 
        the reporting period pursuant to the authorities granted under 
        this Act or the amendments made by this Act; and
            (2) after the end of March and the end of September, 
        commencing September 30, 2021, a written report on all 
        projected costs and liabilities, all operating expenses, 
        including compensation for financial agents, and all 
        transactions made by the Community Development Financial 
        Institutions Fund, which shall include participating 
        institutions and amounts each institution has received under 
        each program described in paragraph (1).

SEC. 15. INSPECTOR GENERAL OVERSIGHT.

    (a) In General.--The Inspector General of the Department of the 
Treasury shall conduct, supervise, and coordinate audits and 
investigations of any program established under this Act or the 
amendments made by this Act.
    (b) Reporting.--The Inspector General of the Department of the 
Treasury shall issue a report not less frequently than 2 times per year 
to Congress and the Secretary of the Treasury relating to the oversight 
provided by the Office of the Inspector General, including any 
recommendations for improvements to the programs described in 
subsection (a).

SEC. 16. STUDY AND REPORT WITH RESPECT TO IMPACT OF PROGRAMS ON LOW- 
              AND MODERATE-INCOME AND MINORITY COMMUNITIES.

    (a) Study.--The Secretary of the Treasury shall conduct a study of 
the impact of the programs established under this Act or any amendment 
made by this Act on low- and moderate-income and minority communities.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report on the 
results of the study conducted pursuant to subsection (a), which shall 
include, to the extent possible, the results of the study disaggregated 
by ethnic group.
    (c) Information Provided to the Secretary.--Eligible institutions 
that participate in any of the programs described in subsection (a) 
shall provide the Secretary of the Treasury with such information as 
the Secretary may require to carry out the study required by this 
section.
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