II 

111TH CONGRESS 

1ST SESSION S. 1822 

To amend the Emergency Economic Stabilization Act of 2008, with respect 

to considerations of the Secretary of the Treasury in providing assistance 

under that Act, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 21, 2009 

Mr. MERKLEY (for himself and Mrs. BOXER) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Emergency Economic Stabilization Act of 

2008, with respect to considerations of the Secretary 

of the Treasury in providing assistance under that Act, 

and for other purposes. 

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 ‘‘Bank On Our Commu5 nities Act of 2009’’. 

6 SEC. 2. COMMUNITY CREDIT RENEWAL PROGRAM. 

7 Section 103 of the Emergency Economic Stabilization 

8 Act of 2008 (12 U.S.C. 5213) is amended— 


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1 (1) by striking ‘‘In exercising the authorities 

2 granted’’ and inserting the following: 

3 ‘‘(a) IN GENERAL.—In exercising the authorities 

4 granted’’; 

5 (2) in paragraph (5), by inserting before the 

6 semicolon the following: ‘‘, except that the needs of 

7 certain small financial institutions may be taken into 

8 account, as set forth in paragraph (6), and the via9 bility of certain small financial institutions may be 

10 established, as set forth in subsection (b)(3)’’; and 

11 (3) by adding at the end the following: 

12 ‘‘(b) COMMUNITY CREDIT RENEWAL PROGRAM.— 

13 ‘‘(1) IN GENERAL.—There is established within 

14 the Treasury the Community Credit Renewal Fund, 

15 which shall be used by the Secretary to provide as16 sistance to community banking institutions in an 

17 amount not to exceed $15,000,000,000. 

18 ‘‘(2) TRANSFER OF FUNDS.—Of amounts made 

19 available to carry out this title, the Secretary shall 

20 transfer $15,000,000,000 to Community Credit Re21 newal Fund for purposes of this subsection. 

22 ‘‘(3) DETERMINATION OF VIABILITY.—Notwith23 standing any other provision of this title, the Sec24 retary shall provide assistance under this subsection 

25 to any community banking institution, and a comVerDate Nov 24 2008 04:45 Oct 22, 2009 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1822.IS S1822

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1 munity banking institution may establish its long2 term viability for purposes of subsection (a)(4), by 

3 demonstrating its receipt of capital from investors 

4 other than the Secretary, if— 

5 ‘‘(A) the amount of capital to be received 

6 from investors other than the Secretary is equal 

7 to or greater than the amount of capital to be 

8 received from the Secretary; 

9 ‘‘(B) the aggregate amount of capital to be 

10 received from the Secretary and from investors 

11 other than the Secretary is determined, on the 

12 basis of a forward-looking assessment by the in13 stitution by its management (in consultation 

14 with the appropriate Federal banking agency), 

15 to enable the community banking institution to 

16 remain well-capitalized (as determined by the 

17 appropriate Federal banking agency) even 

18 under a reasonably adverse economic scenario 

19 during the 2-year period following the date of 

20 receipt of such capital, and to increase the out21 standing loans of the community banking insti22 tution, by December 31, 2010, such that the 

23 total amount of commercial and industrial loans 

24 is at least 5 percent greater than the smallest 

25 amount of such loans held by the community 


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1 banking institution, as of any quarter-end in 

2 calendar year 2009; 

3 ‘‘(C) not later than— 

4 ‘‘(i) 20 business days prior to the pro5 posed date of the investment by the Sec6 retary, the community banking institution 

7 notifies the Secretary, or the designee se8 lected by the Secretary to receive such no9 tice, of the amount of capital that the com10 munity banking institution proposes to so11 licit from investors other than the Sec12 retary, on the condition that such capital 

13 will be matched or supplemented by an in14 vestment by the Secretary, and of the 

15 amount of capital that the community 

16 banking institution proposes be invested by 

17 the Secretary; and 

18 ‘‘(ii) the close of business on the 5th 

19 business day after the date of the receipt 

20 of notice under clause (i) (or such longer 

21 period as the Secretary may reasonably es22 tablish, up to an additional 10 business 

23 days), the Secretary does not notify the 

24 community banking institution of the re25 fusal of the Secretary to make the matchVerDate Nov 24 2008 04:45 Oct 22, 2009 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1822.IS S1822

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1 ing or supplementary investment and the 

2 grounds for such refusal, including the de3 termination of the Secretary, in consulta4 tion with the appropriate Federal banking 

5 agency, that the aggregate amount of cap6 ital to be raised would not be enough to 

7 meet the requirements of this subsection, 

8 provided, however, that the Secretary may 

9 not refuse to make a matching or supple10 mentary investment to an institution solely 

11 on the grounds that the institution holds a 

12 CAMEL composite rating of 3 under the 

13 Uniform Financial Institutions Rating Sys14 tem (or an equivalent rating under a com15 parable rating system); 

16 ‘‘(D) the capital is received from investors 

17 other than the Secretary on the same day as 

18 the date of receipt of capital from the Sec19 retary, and such date is prior to the earlier of— 

20 ‘‘(i) 9 months after the date of enact21 ment of this subsection; or 

22 ‘‘(ii) September 30, 2010; and 

23 ‘‘(E) the aggregate amount of funds in24 vested by the Secretary under this subsection 

25 does not exceed $15,000,000,000. 


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1 ‘‘(4) LENDING INCENTIVES AND PENALTIES.— 

2 ‘‘(A) PENALTIES.— 

3 ‘‘(i) IN GENERAL.—The interest rate 

4 or dividend to be paid on the Federal cap5 ital provided under this subsection by a 

6 community banking institution shall be in7 creased to a penalty rate established by the 

8 Secretary, which shall be not less than 5 

9 percentage points higher than the initial 

10 dividend or interest rate set for all commu11 nity banking institutions assisted under 

12 this subsection if, by December 31, 2010, 

13 the community banking institution has 

14 failed— 

15 ‘‘(I) to increase its total amount 

16 of commercial, industrial, and con17 sumer loans by a dollar amount that 

18 is equal to the amount of capital re19 ceived from the Secretary; or 

20 ‘‘(II) to increase its total amount 

21 of commercial and industrial loans by 

22 a dollar amount that is at least 5 per23 cent greater than the smallest amount 

24 of such loans held by the community 

25 banking institution as of any quarter 


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1 end of the first three quarters in cal2 endar year 2009. 

3 ‘‘(ii) EXEMPTION AUTHORITY.—The 

4 Secretary may provide for exceptions to 

5 the provisions of this paragraph in the case 

6 of exigent circumstances, as determined by 

7 the Secretary. 

8 ‘‘(B) INCENTIVES FOR COMMERCIAL AND

9 INDUSTRIAL LOANS.—Notwithstanding any 

10 other provision of this title— 

11 ‘‘(i) for each dollar that a community 

12 banking institution that has received as13 sistance under this subsection does in com14 mercial and industrial loans above the 

15 amounts described in subparagraph 

16 (A)(i)(II)— 

17 ‘‘(I) the community banking in18 stitution may redeem or repurchase 

19 one dollar of securities or stock held 

20 by the Secretary at a discount level 

21 established by the Secretary, except 

22 that such level shall be a minimum of 

23 20 percent below par; or 


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1 ‘‘(II) the Secretary may, by rule, 

2 allow for a reduction in the interest or 

3 dividend paid on the securities; and 

4 ‘‘(ii) if the dollar increase in lending 

5 by a community banking institution that 

6 has received assistance under this sub7 section exceeds the total Federal assistance 

8 under this subsection, the Secretary may 

9 establish rules for additional discounts on 

10 redemption of stock or securities held by 

11 the Secretary. 

12 ‘‘(5) DEFINITIONS.—As used in this sub13 section— 

14 ‘‘(A) the term ‘community banking institu15 tion’ means a insured depository institution, or 

16 a holding company thereof, having total assets 

17 of less than $5,000,000,000; and 

18 ‘‘(B) the terms ‘insured depository institu19 tion’ and ‘appropriate Federal banking agency’ 

20 have the same meanings as in section 3 of the 

21 Federal Deposit Insurance Act (12 U.S.C. 

22 1813).’’. 

Æ 


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