II 

110TH CONGRESS 

2D SESSION S. 3410 

To authorize a grant program to provide for expanded access to mainstream 

financial institutions. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2008 

Mr. AKAKA (for himself, Mr. SCHUMER, Mr. LIEBERMAN, and Mr. INOUYE) 

introduced the following bill; which was read twice and referred to the 

Committee on Banking, Housing, and Urban Affairs 

A BILL 

To authorize a grant program to provide for expanded access 

to mainstream financial institutions. 

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 ‘‘Improving Access to 

5 Mainstream Financial Institutions Act of 2008’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act, the following definitions shall apply: 

8 (1) ALASKA NATIVE CORPORATION.—The term 

9 ‘‘Alaska Native Corporation’’ has the same meaning 

10 as the term ‘‘Native Corporation’’ under section 


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1 3(m) of the Alaska Native Claims Settlement Act 

2 (43 U.S.C. 1602(m)). 

3 (2) COMMUNITY DEVELOPMENT FINANCIAL IN4 STITUTION.—The term ‘‘community development fi5 nancial institution’’ has the same meaning as in sec6 tion 103(5) of the Community Development Banking 

7 and Financial Institutions Act of 1994 (12 U.S.C. 

8 4702(5)). 

9 (3) FEDERALLY INSURED DEPOSITORY INSTI10 TUTION.—The term ‘‘federally insured depository in11 stitution’’ means any insured depository institution 

12 (as that term is defined in section 3 of the Federal 

13 Deposit Insurance Act (12 U.S.C. 1813)) and any 

14 insured credit union (as that term is defined in sec15 tion 101 of the Federal Credit Union Act (12 U.S.C. 

16 1752)). 

17 (4) LABOR ORGANIZATION.—The term ‘‘labor 

18 organization’’ means an organization— 

19 (A) in which employees participate; 

20 (B) which exists for the purpose, in whole 

21 or in part, of dealing with employers concerning 

22 grievances, labor disputes, wages, rates of pay, 

23 hours of employment, or conditions of work; 

24 and 


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1 (C) which is described in section 501(c)(5) 

2 of the Internal Revenue Code of 1986. 

3 (5) NATIVE HAWAIIAN ORGANIZATION.—The 

4 term ‘‘Native Hawaiian organization’’ means any or5 ganization that— 

6 (A) serves and represents the interests of 

7 Native Hawaiians; and 

8 (B) has as a primary and stated purpose, 

9 the provision of services to Native Hawaiians. 

10 (6) PAYDAY LOAN.—The term ‘‘payday loan’’ 

11 means any transaction in which a small cash ad12 vance is made to a consumer in exchange for— 

13 (A) the personal check or share draft of 

14 the consumer, in the amount of the advance 

15 plus a fee, where presentment or negotiation of 

16 such check or share draft is deferred by agree17 ment of the parties until a designated future 

18 date; or 

19 (B) the authorization of the consumer to 

20 debit the transaction account or share draft ac21 count of the consumer, in the amount of the ad22 vance plus a fee, where such account will be 

23 debited on or after a designated future date. 

24 (7) SECRETARY.—The term ‘‘Secretary’’ means 

25 the Secretary of the Treasury. 


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1 (8) TRIBAL ORGANIZATION.—The term ‘‘tribal 

2 organization’’ has the same meaning as in section 4 

3 of the Indian Self-Determination and Education As4 sistance Act (25 U.S.C. 450b). 

5 SEC. 3. EXPANDED ACCESS TO MAINSTREAM FINANCIAL IN6 STITUTIONS. 

7 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

8 is authorized to award grants, including multi-year grants, 

9 to eligible entities to establish an account in a federally 

10 insured depository institution for low- and moderate-in11 come individuals that currently do not have such an ac12 count. 

13 (b) ELIGIBLE ENTITIES.—An entity is eligible to re14 ceive a grant under this section, if such an entity is— 

15 (1) an organization described in section 

16 501(c)(3) of the Internal Revenue Code of 1986, 

17 and is exempt from taxation under section 501(a) of 

18 such Code; 

19 (2) a federally insured depository institution; 

20 (3) an agency of a State or local government; 

21 (4) a community development financial institu22 tion; 

23 (5) an Indian tribal organization; 

24 (6) an Alaska Native Corporation; 

25 (7) a Native Hawaiian organization; 


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1 (8) a labor organization; or 

2 (9) a partnership comprised of 1 or more of the 

3 entities described in the preceding subparagraphs. 

4 (c) EVALUATION AND REPORTS TO CONGRESS.—For 

5 each fiscal year in which a grant is awarded under this 

6 section, the Secretary shall submit a report to Congress 

7 containing a description of the activities funded, amounts 

8 distributed, and measurable results, as appropriate and 

9 available. 

10 SEC. 4. LOW COST ALTERNATIVES TO PAYDAY LOANS. 

11 (a) ESTABLISHMENT OF PROGRAM.—The Secretary 

12 is authorized to award demonstration project grants (in13 cluding multi-year grants) to eligible entities to provide 

14 low-cost, small loans to consumers that will provide alter15 natives to more costly, predatory payday loans. 

16 (b) ELIGIBLE ENTITIES.—An entity is eligible to re17 ceive a grant under this section if such an entity is— 

18 (1) an organization described in section 

19 501(c)(3) of the Internal Revenue Code of 1986 and 

20 exempt from tax under section 501(a) of such Code; 

21 (2) a federally insured depository institution; 

22 (3) a community development financial institu23 tion; or 

24 (4) a partnership comprised of 1 or more of the 

25 entities described in paragraphs (1) through (3). 


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1 (c) TERMS AND CONDITIONS.— 

2 (1) PERCENTAGE RATE.—For purposes of this 

3 section, an eligible entity that is a federally insured 

4 depository institution shall be subject to the annual 

5 percentage rate promulgated by the National Credit 

6 Union Administration’s Loan Interest Rates under 

7 part 701 of title 12, Code of Federal Regulations (or 

8 any successor thereto), in connection with a loan 

9 provided to a consumer pursuant to this section. 

10 (2) FINANCIAL LITERACY AND EDUCATION OP11 PORTUNITIES.—Each eligible entity awarded a grant 

12 under this section shall offer financial literacy and 

13 education opportunities, such as relevant counseling 

14 services or educational courses, to each consumer 

15 provided with a loan pursuant to this section. 

16 (d) EVALUATION AND REPORTS TO CONGRESS.—For 

17 each fiscal year in which a grant is awarded under this 

18 section, the Secretary shall submit a report to Congress 

19 containing a description of the activities funded, amounts 

20 distributed, and measurable results, as appropriate and 

21 available. 

22 SEC. 5. PROCEDURAL PROVISIONS. 

23 (a) APPLICATIONS.—A person desiring a grant under 

24 section 3 or 4 shall submit an application to the Secretary, 


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1 in such form and containing such information as the Sec2 retary may require. 

3 (b) LIMITATION ON ADMINISTRATIVE COSTS.—A re4 cipient of a grant under section 3 or 4 may use not more 

5 than 6 percent of the total amount of such grant in any 

6 fiscal year for the administrative costs of carrying out the 

7 programs funded by such grant in such fiscal year. 

8 SEC. 6. AUTHORIZATION OF APPROPRIATIONS. 

9 There are authorized to be appropriated to the Sec10 retary, such sums as are necessary to carry out the grant 

11 programs authorized by this Act, to remain available until 

12 expended. 

13 SEC. 7. REGULATIONS. 

14 The Secretary is authorized to promulgate regula15 tions to implement and administer the grant programs au16 thorized by this Act. 

Æ 


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