I 

116TH CONGRESS 

2D SESSION H. R. 9059 

To require Federal financial supervisory agencies to evaluate a financial 

institution’s record of meeting community environmentally sustainable 

investment needs as part of examinations, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 31, 2020 

Mr. KENNEDY (for himself and Mr. CICILLINE) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To require Federal financial supervisory agencies to evaluate 

a financial institution’s record of meeting community 

environmentally sustainable investment needs as part of 

examinations, 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 ‘‘Climate Protection and 

5 Sustainable Communities Act’’. 

6 SEC. 2. CONGRESSIONAL FINDINGS AND STATEMENT OF 

7 PURPOSE. 

8 (a) FINDINGS.—Congress finds the following: 


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1 (1) Financial institutions that are federally reg2 ulated and supervised have an obligation to serve the 

3 convenience and needs of the entire community, con4 sistent with safe and sound operations. These insti5 tutions include, but are not limited to, insured de6 pository institutions (and their holding companies, if 

7 any), investment advisers, broker dealers, insurers, 

8 non-bank lenders, credit unions, investment compa9 nies, and other financial institutions of significant 

10 size and operations. 

11 (2) The convenience and needs of communities 

12 include the need for environmentally sustainable in13 vestment because— 

14 (A) these financial institutions have, as a 

15 result of their investment, lending, and other 

16 activities, contributed to climate change and its 

17 effects, and therefore have a responsibility to 

18 act to mitigate climate change; and 

19 (B) these financial institutions receive 

20 Federal benefits not available to other types of 

21 businesses, including— 

22 (i) support for United States Treas23 ury bond markets, including extraordinary 

24 commitments to purchase such bonds since 

25 the onset of the COVID-19 health crisis; 


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1 (ii) access to the Federal Reserve Dis2 count Window and other special lending fa3 cilities established by the Board of Gov4 ernors of the Federal Reserve System and 

5 supported by the Treasury department; 

6 (iii) measures to maintain efficient, 

7 transparent, and competitive markets; 

8 (iv) regulatory relief during times of 

9 stress in the financial system, such as the 

10 ongoing COVID-19 health crisis; and 

11 (v) other actions to ensure financial 

12 stability and mitigate risk to the financial 

13 system as a whole. 

14 (3) Regulated financial institutions have con15 tinuing and affirmative obligation to help meet the 

16 environmentally sustainable investment needs of the 

17 local communities in which they are chartered. 

18 (4) Regulated financial institutions should re19 flect the communities which they serve, which in20 cludes people of color and women. 

21 (b) PURPOSE.—It is the purpose of this Act to re22 quire covered financial institutions that are regulated and 

23 supervised by one or more appropriate financial regulators 

24 to meet the environmentally sustainable investment needs 


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1 of the entire community, consistent with the safe and 

2 sound operation of such institutions. 

3 SEC. 3. DEFINITIONS. 

4 (a) IN GENERAL.—In this Act: 

5 (1) APPLICATION FOR A DEPOSIT FACILITY.— 

6 The term ‘‘application for a deposit facility’’ means 

7 an application to the appropriate financial regulator 

8 otherwise required under Federal law or regulations 

9 thereunder for— 

10 (A) a charter for a national bank or Fed11 eral savings and loan association; 

12 (B) deposit insurance in connection with a 

13 newly chartered State bank, savings bank, sav14 ings and loan association or similar institution; 

15 (C) the establishment of a domestic branch 

16 or other facility with the ability to accept depos17 its of a regulated financial institution; 

18 (D) the relocation of the home office or a 

19 branch office of an insured depository institu20 tion (as defined in section 3 of the Federal De21 posit Insurance Act); 

22 (E) the merger or consolidation with, or 

23 the acquisition of the assets, or the assumption 

24 of the liabilities of an insured depository insti25 tution requiring approval under section 18(c) of 


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1 the Federal Deposit Insurance Act or under 

2 regulations issued under the authority of title 

3 IV of the National Housing Act; or 

4 (F) the acquisition of shares in, or the as5 sets of, an insured depository institution requir6 ing approval under section 3 of the Bank Hold7 ing Company Act of 1956 or section 408(e) of 

8 the National Housing Act. 

9 (2) APPROPRIATE FINANCIAL REGULATOR.— 

10 The term ‘‘appropriate financial regulator’’ has the 

11 meaning given in section 803 of the Payment, Clear12 ing, and Settlement Supervision Act of 2010 (12 

13 U.S.C. 5462). 

14 (3) COVERED FINANCIAL INSTITUTION.—The 

15 term ‘‘covered financial institution’’ means— 

16 (A) an insured depository institution (as 

17 defined in section 3 of the Federal Deposit In18 surance Act (12 U.S.C. 1813)); 

19 (B) a depository institution holding com20 pany (as defined in such section); 

21 (C) an investment adviser or investment 

22 company (as defined in section 202 of the In23 vestment Advisers Act of 1940 (15 U.S.C. 80b– 

24 2)); 


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1 (D) a covered broker or dealer (as defined 

2 in section 201(a)(7) of the Dodd-Frank Wall 

3 Street Reform and Consumer Protection Act 

4 (12 U.S.C. 5381(a)(7))); 

5 (E) admitted insurers; 

6 (F) an insured credit union (as defined in 

7 section 101 of the Federal Credit Union Act 

8 (12 U.S.C. 1752)); 

9 (G) a non-bank lender; and 

10 (H) any entity that has been identified as 

11 systemically important by the Financial Sta12 bility Oversight Council. 

13 (4) ENVIRONMENTALLY SUSTAINABLE INVEST14 MENT.—The term ‘‘environmentally sustainable in15 vestment’’ means investments, loans, and other fi16 nancial products or services that support climate 

17 mitigation and adaptation efforts, enterprises, and 

18 projects whose impacts have been evaluated to equi19 tably and sustainably advance social and environ20 mental welfare. 

21 (b) APPLICATION OF ENTIRE COMMUNITY.—For 

22 purposes of this Act, with respect to a covered financial 

23 institution whose business predominately consists of serv24 ing the needs of military personnel who are not located 

25 within a defined geographic area, such covered financial 


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1 institution may define the term ‘‘entire community’’ to in2 clude the entire deposit customer base without regard to 

3 geographic proximity to the covered financial institution. 

4 SEC. 4. ASSESSMENT OF COVERED FINANCIAL INSTITU5 TIONS. 

6 (a) IN GENERAL.—Except as provided in section 6, 

7 not less than once every 24 months an appropriate finan8 cial regulator shall assess the record of a covered financial 

9 institution of meeting the environmentally sustainable in10 vestment needs of the entire community of such institu11 tion, including low- and moderate-income neighborhoods, 

12 consistent with the safe and sound operation of such insti13 tution. 

14 (b) REQUIREMENTS FOR COVERED FINANCIAL IN15 STITUTIONS.— 

16 (1) RATING.— 

17 (A) IN GENERAL.—A covered financial in18 stitution that received a rating described in 

19 subparagraph (C), (D), or (E) of section 

20 5(b)(2) shall, within the 12-month period begin21 ning on the date of receipt of such rating, take 

22 such action as may be necessary in order for 

23 such institution to achieve a rating of ‘‘satisfac24 tory record of meeting community environ25 mentally sustainable investment needs’’. 


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1 (B) PENALTY.—A covered financial insti2 tution that fails to meet the requirements of 

3 subparagraph (A) shall be subject to such pen4 alties as determined appropriate by the appro5 priate financial regulator of such institution. 

6 (2) APPROVAL OF REQUESTS.—With respect to 

7 any request submitted by a covered financial institu8 tion to the appropriate financial regulator to take an 

9 action that requires the approval of the regulator, 

10 the appropriate financial regulator may only approve 

11 such request if the covered financial institution re12 ceived a rating of ‘‘satisfactory record of meeting 

13 community environmentally sustainable investment 

14 needs’’ or better during the most recent examination 

15 of the covered financial institution under this sec16 tion. 

17 (c) MAJORITY-OWNED INSTITUTIONS.—In assessing 

18 and taking into account, under subsection (a), the record 

19 of a nonminority-owned and nonwomen-owned covered fi20 nancial institution, the appropriate financial regulator 

21 may consider as a factor capital investment, loan partici22 pation, and other ventures undertaken by such covered fi23 nancial institution in cooperation with minority- and 

24 women-owned financial institutions and low-income credit 

25 unions, if such activities help meet the environmentally 


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1 sustainable investment needs of the local communities in 

2 which such covered financial institution is chartered. 

3 (d) FINANCIAL HOLDING COMPANY REQUIRE4 MENT.— 

5 (1) IN GENERAL.—An election by a bank hold6 ing company to become a financial holding company 

7 under section 4 of the Bank Holding Company Act 

8 of 1956 shall not be effective if— 

9 (A) the Board finds that, as of the date 

10 the declaration of such election and the certifi11 cation is filed by such holding company under 

12 section 4(l)(1)(C) of the Bank Holding Com13 pany Act of 1956, not all of the subsidiary in14 sured depository institutions of the bank hold15 ing company had achieved a rating of ‘‘satisfac16 tory record of meeting community environ17 mentally sustainable investment needs’’, or bet18 ter, at the most recent examination of each 

19 such institution; and 

20 (B) the Board notifies the company of 

21 such finding before the end of the 30-day pe22 riod beginning on such date. 

23 (2) LIMITED EXCLUSIONS FOR NEWLY AC24 QUIRED INSURED DEPOSITORY INSTITUTIONS.—Any 

25 insured depository institution acquired by a bank 


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1 holding company during the 12-month period pre2 ceding the date of the submission to the Board of 

3 the declaration and certification under section 

4 4(l)(1)(C) of the Bank Holding Company Act of 

5 1956 may be excluded for purposes of paragraph (1) 

6 during the 12-month period beginning on the date of 

7 such acquisition if— 

8 (A) the bank holding company has sub9 mitted an affirmative plan to the appropriate fi10 nancial regulator to take such action as may be 

11 necessary in order for such institution to 

12 achieve a rating of ‘‘satisfactory record of meet13 ing community environmentally sustainable in14 vestment needs’’, or better, at the next exam15 ination of the institution; and 

16 (B) the plan has been accepted by such 

17 agency. 

18 (3) DEFINITIONS.—For purposes of this sub19 section, the following definitions shall apply: 

20 (A) BANK HOLDING COMPANY; FINANCIAL

21 HOLDING COMPANY.—The terms ‘‘bank holding 

22 company’’ and ‘‘financial holding company’’ 

23 have the meanings given those terms in section 

24 2 of the Bank Holding Company Act of 1956. 


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1 (B) BOARD.—The term ‘‘Board’’ means 

2 the Board of Governors of the Federal Reserve 

3 System. 

4 (C) INSURED DEPOSITORY INSTITUTION.— 

5 The term ‘‘insured depository institution’’ has 

6 the meaning given the term in section 3(c) of 

7 the Federal Deposit Insurance Act. 

8 SEC. 5. WRITTEN EVALUATIONS. 

9 (a) REQUIRED.— 

10 (1) IN GENERAL.—Upon the conclusion of each 

11 examination of a covered financial institution under 

12 section 4, the appropriate financial regulator shall 

13 prepare a written evaluation of the institution’s 

14 record of meeting the environmentally sustainable 

15 investment needs of its entire community, including 

16 low- and moderate-income neighborhoods. 

17 (2) PUBLIC AND CONFIDENTIAL SECTIONS.— 

18 Each written evaluation required under paragraph 

19 (1) shall have a public section and a confidential sec20 tion. 

21 (b) PUBLIC SECTION OF REPORT.— 

22 (1) FINDINGS AND CONCLUSIONS.— 

23 (A) CONTENTS OF WRITTEN EVALUA24 TION.—The public section of the written evalua25 tion shall— 


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1 (i) state the appropriate financial reg2 ulator’s conclusions for each assessment 

3 factor identified in the regulations pre4 scribed by such appropriate financial regu5 lator to implement this Act; 

6 (ii) discuss the facts and data sup7 porting such conclusions; and 

8 (iii) contain the rating of the covered 

9 financial institution and a statement de10 scribing the basis for the rating. 

11 (B) METROPOLITAN AREA DISTINC12 TIONS.—The information required by clauses (i) 

13 and (ii) of subparagraph (A) shall be presented 

14 separately for each metropolitan area in which 

15 a covered financial institution maintains one or 

16 more domestic branch offices. 

17 (2) ASSIGNED RATING.—The rating of a cov18 ered financial institution referred to in paragraph 

19 (1)(A)(iii) shall be one of the following: 

20 (A) ‘‘Outstanding record of meeting com21 munity environmentally sustainable investment 

22 needs’’. 

23 (B) ‘‘Satisfactory record of meeting com24 munity environmentally sustainable investment 

25 needs’’. 


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1 (C) ‘‘Sufficient record of meeting commu2 nity environmentally sustainable investment 

3 needs’’. 

4 (D) ‘‘Needs to improve record of meeting 

5 community environmentally sustainable invest6 ment needs’’. 

7 (E) ‘‘Substantial noncompliance in meeting 

8 community environmentally sustainable invest9 ment needs’’. 

10 (c) CONFIDENTIAL SECTION OF REPORT.— 

11 (1) PRIVACY OF NAMED INDIVIDUALS.—The 

12 confidential section of the written evaluation shall 

13 contain— 

14 (A) all references that identify any cus15 tomer of the covered financial institution, any 

16 employee or officer of such institution, or any 

17 person or organization that has provided infor18 mation in confidence to a Federal or State fi19 nancial supervisory agency; and 

20 (B) any statements obtained or made by 

21 the appropriate financial regulator in the course 

22 of an examination which, in the judgment of 

23 the regulator, are too sensitive or speculative in 

24 nature to disclose to the covered financial insti25 tution or the public. 


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1 (2) DISCLOSURE TO DEPOSITORY INSTITU2 TION.—The confidential section may be disclosed, in 

3 whole or part, to the covered financial institution, if 

4 the appropriate financial regulator determines that 

5 such disclosure will promote the objectives of this 

6 Act. However, disclosure under this paragraph shall 

7 not identify a person or organization that has pro8 vided information in confidence to a Federal or 

9 State financial supervisory agency. 

10 (d) INSTITUTIONS WITH INTERSTATE BRANCHES.— 

11 (1) STATE-BY-STATE EVALUATION.—In the case 

12 of a covered financial institution that maintains do13 mestic branches in 2 or more States, the appropriate 

14 financial regulator shall prepare— 

15 (A) a written evaluation of the entire insti16 tution’s record of performance under this title, 

17 as required by subsections (a), (b), and (c); and 

18 (B) for each State in which the institution 

19 maintains 1 or more domestic branches, a sepa20 rate written evaluation of the institution’s 

21 record of performance within such State under 

22 this title, as required by subsections (a), (b), 

23 and (c). 

24 (2) MULTISTATE METROPOLITAN AREAS.—In 

25 the case of a covered financial institution that mainVerDate Sep 11 2014 04:36 Jan 21, 2021 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H9059.IH H9059

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1 tains domestic branches in 2 or more States within 

2 a multistate metropolitan area, the appropriate fi3 nancial regulator shall prepare a separate written 

4 evaluation of the institution’s record of performance 

5 within such metropolitan area under this title, as re6 quired by subsections (a), (b), and (c). If the appro7 priate financial regulator prepares a written evalua8 tion pursuant to this paragraph, the scope of the 

9 written evaluation required under paragraph (1)(B) 

10 shall be adjusted accordingly. 

11 (3) CONTENT OF STATE-LEVEL EVALUATION.— 

12 A written evaluation prepared pursuant to para13 graph (1)(B) shall— 

14 (A) present the information required by 

15 subparagraphs (A) and (B) of subsection (b)(1) 

16 separately for each metropolitan area in which 

17 the covered financial institution maintains 1 or 

18 more domestic branch offices and separately for 

19 the remainder of the nonmetropolitan area of 

20 the State if the covered financial institution 

21 maintains 1 or more domestic branch offices in 

22 such nonmetropolitan area; and 

23 (B) describe how the appropriate financial 

24 regulator has performed the examination of the 


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1 covered financial institution, including a list of 

2 the individual branches examined. 

3 (e) DEFINITIONS.—For purposes of this section the 

4 following definitions shall apply: 

5 (1) DOMESTIC BRANCH.—The term ‘‘domestic 

6 branch’’ means any branch office or other facility of 

7 a covered financial institution that accepts deposits, 

8 located in any State. 

9 (2) METROPOLITAN AREA.—The term ‘‘metro10 politan area’’ means any primary metropolitan sta11 tistical area, metropolitan statistical area, or consoli12 dated metropolitan statistical area, as defined by the 

13 Director of the Office of Management and Budget, 

14 with a population of 250,000 or more, and any other 

15 area designated as such by the appropriate financial 

16 regulator. 

17 (3) STATE.—The term ‘‘State’’ has the same 

18 meaning as in section 3 of the Federal Deposit In19 surance Act. 

20 SEC. 6. SMALL COVERED FINANCIAL INSTITUTION REGU21 LATORY RELIEF. 

22 (a) IN GENERAL.—Except as provided in subsections 

23 (b) and (c), any covered financial institution with aggre24 gate assets of not more than $250,000,000 shall be sub25 ject to routine examination under this Act— 


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1 (1) not more than once every 60 months for an 

2 institution that has achieved a rating of ‘‘out3 standing record of meeting community environ4 mentally sustainable investment needs’’ at its most 

5 recent examination under section 4; 

6 (2) not more than once every 48 months for an 

7 institution that has received a rating of ‘‘satisfactory 

8 record of meeting community environmentally sus9 tainable investment needs’’ at its most recent exam10 ination under section 4; and 

11 (3) at least once every 24 months for an insti12 tution that has received a rating of less than ‘‘satis13 factory record of meeting community environ14 mentally sustainable investment needs’’ at its most 

15 recent examination under section 4. 

16 (b) NO EXCEPTION FROM EXAMINATIONS IN CON17 NECTION WITH APPLICATIONS FOR DEPOSIT FACILI18 TIES.—A covered financial institution described in sub19 section (a) shall remain subject to examination under this 

20 title in connection with an application for a deposit facil21 ity. 

22 (c) DISCRETION.—A covered financial institution de23 scribed in subsection (a) may be subject to more frequent 

24 or less frequent examinations for reasonable cause under 


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1 such circumstances as may be determined by the appro2 priate financial regulator. 

3 SEC. 7. APPLICABILITY. 

4 The requirements of this Act shall not supplant the 

5 requirements of the Community Reinvestment Act of 1977 

6 (12 U.S.C. 2901 et seq.). 

7 SEC. 8. REPORT TO CONGRESS. 

8 Each appropriate financial regulator shall include in 

9 its annual report to the Congress a section outlining the 

10 actions it has taken to carry out its responsibilities under 

11 this Act. 

12 SEC. 9. REGULATIONS. 

13 Not later than 180 days after the date of enactment 

14 of this Act, each appropriate financial regulator shall con15 sult with each other appropriate financial regulator to 

16 issue rules to carry out this Act. To the extent practicable, 

17 the appropriate financial regulator shall issue substan18 tially similar rules. 

19 SEC. 10. EFFECTIVE DATE. 

20 Except as otherwise provided, the requirements of 

21 this Act shall take effect one year after the date of the 

22 enactment of this Act. 

Æ 


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