I 

111TH CONGRESS 

1ST SESSION H. R. 3171 

To help stabilize and restore the economy by providing for greater access 

to credit for the underbanked, the unbanked, and consumers with low 

credit scores through the establishment of bridging bank depository institutions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 10, 2009 

Mr. BACA introduced the following bill; which was referred to the Committee 

on Financial Services, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To help stabilize and restore the economy by providing for 

greater access to credit for the underbanked, the 

unbanked, and consumers with low credit scores through 

the establishment of bridging bank depository institutions, 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 ‘‘Bridging Bank to Re5 covery Act of 2009’’. 

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1 SEC. 2. FINDINGS AND PURPOSES. 

2 (1) FINDINGS.—The Congress finds that— 

3 (A) the current financial crisis has had a 

4 disproportionate impact on the underbanked, 

5 the unbanked and consumers with credit scores 

6 at or below 660; 

7 (B) the underbanked, the unbanked and 

8 consumers with credit scores at or below 660 

9 already have extreme difficulty gaining access 

10 to comprehensive banking services, including 

11 access to appropriate credit; 

12 (C) the underbanked, the unbanked, con13 sumers with credit scores at or below 660 and 

14 the United States economy would benefit from 

15 programs that provide a means by which the 

16 underbanked, the unbanked and consumers 

17 with credit scores at or below 660 could be 

18 transitioned into mainstream banking; 

19 (D) developing programs to assist con20 sumers with credit scores at or below 660 reha21 bilitate their credit scores and gain a greater 

22 understanding of the credit process would ben23 efit this consumer group and assist in stabi24 lizing and restoring the United States economy; 

25 (E) assisting consumers with credit scores 

26 at or below 660 stay in their homes and avoid 

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1 foreclosures which would significantly reduce 

2 the number of foreclosures and thereby assist in 

3 stabilizing and restoring the current housing 

4 market; 

5 (F) while many traditional banks have pro6 grams targeted towards transitioning the 

7 underbanked and the unbanked into main8 stream banking, only a limited number of banks 

9 have programs designed to assist consumers 

10 with credit scores at or below 660; 

11 (G) consumers with credit scores at or 

12 below 660 have substantially increased due to 

13 economic conditions, and the capacity of these 

14 consumers to manage their financial obligations 

15 has worsened; 

16 (H) there is a need to create a financial in17 stitution whose primary purpose is to assist the 

18 underbanked, the unbanked and consumers 

19 with credit scores at or below 660; and 

20 (I) the new financial institution could be21 come a bridge by which the underbanked, the 

22 unbanked and consumers with credit scores at 

23 or below 660 gain greater access to credit and 

24 other financial services and build or rebuild 

25 their credit history and credit scores in order to 

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1 become a more integral part of the financial 

2 mainstream and contribute more to the eco3 nomic growth of the United States. 

4 (2) PURPOSE.—The purpose of this Act is to 

5 create a bridging bank depository institution as a 

6 special purpose financial institution primarily dedi7 cated to serving the underbanked and the unbanked 

8 consumers and consumers with credit scores at or 

9 below 680, enabling those consumers to more easily 

10 transition to or back to the financial mainstream 

11 through a program of comprehensive banking serv12 ices, including, but not limited to, access to credit 

13 products, financial and credit training, loan 

14 restructurings and other tailored financial products 

15 and services designed to meet the needs of such con16 sumers. 

17 SEC. 3. DEFINITIONS. 

18 For purposes of this Act, the following definitions 

19 shall apply: 

20 (1) APPROPRIATE BANKING AGENCY.—The 

21 term ‘‘appropriate banking agency’’ means any ap22 propriate Federal banking agency and State bank 

23 supervisor (as such terms are defined in section 3 of 

24 the Federal Deposit Insurance Act) and, in the case 

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1 of any insured credit union, the National Credit 

2 Union Administration Board. 

3 (2) BRIDGING BANK DEPOSITORY INSTITU4 TION.— 

5 (A) IN GENERAL.—The term ‘‘bridging 

6 bank depository institution’’ means a de novo 

7 bank chartered by the Comptroller of the Cur8 rency, a de novo savings association chartered 

9 by the Director of the Office of Thrift Super10 vision, a de novo insured credit union chartered 

11 by the National Credit Union Administration or 

12 a de novo bank chartered by a State bank su13 pervisor created pursuant to this Act that— 

14 (i) has a primary mission of providing 

15 a comprehensive array of financial services 

16 to the underbanked, the unbanked and 

17 consumers with credit scores at or below 

18 680 in order to provide a vehicle to transi19 tion consumers into the financial main20 stream; 

21 (ii) serves as a vehicle for providing 

22 access to credit products predominately to 

23 consumers with a credit score at or below 

24 680; 

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1 (iii) provides financial and credit 

2 training, loan restructurings and other tai3 lored financial products and services de4 signed to meet their needs; 

5 (iv) provides a full range of financial 

6 products and services (including, but not 

7 limited to, traditional retail products such 

8 as savings and debit products, credit prod9 ucts such as mortgage loans, automobile 

10 loans, credit cards and bill payment serv11 ices as well as specialized services such as 

12 home repair, weatherization and energy ef13 ficient upgrades) to meet the needs of the 

14 underbanked, the unbanked and consumers 

15 with credit scores at or below 680; 

16 (v) provides programs designed to as17 sure financial literacy and product-based, 

18 individualized financial education such as 

19 budgeting, financial planning, the mort20 gage process and financial disclosures, the 

21 credit scoring process, communications 

22 with financial institutions and rights of ob23 ligations of borrowers and lenders; 

24 (vi) provides savings and other depos25 its and deposit products to the undermstockstill on DSKH9S0YB1PROD with BILLS

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1 banked, the unbanked, consumers with a 

2 credit score of 680 or below and a broader 

3 range of customers the interest on which is 

4 free from Federal income tax; and 

5 (vii) has limits placed on its profits 

6 equal to a 20 percent return on equity (on 

7 a generally accepted accounting principles 

8 basis) per annum, and returns excess prof9 its to decrease the costs of loans and other 

10 financial products and services for the 

11 underbanked, the unbanked and consumers 

12 with credit scores at or below 680. 

13 (B) EXCEPTIONS.—No entity may be 

14 treated as a bridging bank depository institu15 tion for purposes of this Act unless the entity 

16 is— 

17 (i) is either an insured depository in18 stitution or an insured credit union; and 

19 (ii) is a member of a Federal Reserve 

20 bank or is a depository institution (as de21 fined in section 19(b)(1)(A) of the Federal 

22 Reserve Act). 

23 (3) INCLUDED TERMS.—The terms ‘‘insured de24 pository institution’’, ‘‘national bank’’, ‘‘savings as25 sociation’’, and ‘‘State bank’’ have the same meanmstockstill on DSKH9S0YB1PROD with BILLS

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1 ing as in section 3 of the Federal Deposit Insurance 

2 Act. 

3 (4) INSURED CREDIT UNION.—The term ‘‘in4 sured credit union’’ has the same meaning as in sec5 tion 101(7) of the Federal Credit Union Act. 

6 (5) UNBANKED.—The term ‘‘unbanked’’ means 

7 individuals or families who do not have an account 

8 with an insured depository institution or an insured 

9 credit union or a transaction account with a money 

10 market mutual fund or brokerage firm. 

11 (6) UNDERBANKED.—The term ‘‘underbanked’’ 

12 means individuals or families who have a deposit ac13 count with an insured depository institution or an 

14 insured credit union and have limited or no ability 

15 to access nondepository services from insured deposi16 tory institutions or insured credit unions. 

17 SEC. 4. CHARTERING OF BRIDGING BANK DEPOSITORY IN18 STITUTIONS. 

19 (a) DE NOVO BRIDGING BANK.—Only de novo bridg20 ing bank depository institutions may be created pursuant 

21 to this Act. A de novo bridging bank depository institution 

22 may become a bridging bank depository institution by ob23 taining a charter as such from its appropriate banking 

24 agency. 

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1 (b) LICENSING REQUIREMENTS.—Any person desir2 ing to establish a bridging bank depository institution 

3 shall submit an application and obtain prior appropriate 

4 banking agency approval. 

5 (c) SCOPE.—This section describes the procedures 

6 and requirements governing appropriate banking agency 

7 review and approval of an application to establish a bridg8 ing bank depository institution. 

9 (d) DEFINITIONS.—For purposes of this section, the 

10 following definitions shall apply: 

11 (1) CONTROL.—The term ‘‘control’’ has the 

12 same meaning as in section 2 of the Bank Holding 

13 Company Act. 

14 (2) FINAL APPROVAL.—The term ‘‘final ap15 proval’’, in connection with a bridging bank deposi16 tory institution, means the appropriate banking 

17 agency action issuing a charter certificate and au18 thorizing a bridging bank depository institution to 

19 open for business. 

20 (3) HOLDING COMPANY.—The term ‘‘holding 

21 company’’ means any company that controls or pro22 poses to control a bridging bank depository institu23 tion whether or not the company is a bank holding 

24 company under the Bank Holding Company Act of 

25 1956. 

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1 (4) ORGANIZING GROUP.—The term ‘‘orga2 nizing group’’ or ‘‘organizer’’ means 5 or more per3 sons acting on their own behalf who apply to the ap4 propriate banking agency for a bridging bank depos5 itory institution charter. 

6 (5) PRELIMINARY APPROVAL.—The term ‘‘pre7 liminary approval’’ means a decision by the appro8 priate banking agency permitting an organizing 

9 group to go forward with the organization of the 

10 proposed bridging bank depository institution. 

11 (6) WELL CAPITALIZED.—The term ‘‘well cap12 italized’’, when used in connection with a bridging 

13 bank depository institution means the bridging bank 

14 depository institution— 

15 (A) has a total risk-based capital ratio of 

16 10 percent or greater; 

17 (B) has a Tier 1 risk-based capital ratio of 

18 6 percent or greater; 

19 (C) has a leverage ratio of 5 percent or 

20 greater; and 

21 (D) is not subject to any written agree22 ment, order, capital directive or prompt correc23 tive action directive from an appropriate bank24 ing agency. 

25 (e) STATUTORY REQUIREMENTS.— 

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1 (1) IN GENERAL.—The name of a proposed 

2 bridging bank depository institution shall include the 

3 word ‘‘bridge’’ or ‘‘bridging’’. In determining wheth4 er to approve an application to establish a bridging 

5 bank depository institution, the appropriate banking 

6 agency shall verify that the proposed bridging bank 

7 depository institution has complied with the require8 ments contained in this chapter, including the fol9 lowing requirements. A bridging bank depository in10 stitution shall— 

11 (A) draft and file articles of association, 

12 articles of incorporation, or other appropriate 

13 organizational documents with the appropriate 

14 banking agency; 

15 (B) draft and file an organization certifi16 cate containing specified information with the 

17 appropriate banking agency; 

18 (C) ensure that all capital stock is paid in 

19 prior to commencing business; 

20 (D) have at least five elected directors; and 

21 (E) submit to the appropriate banking 

22 agency for approval a business plan which, 

23 among other things, provides in reasonable de24 tail evidence of the knowledge, understanding 

25 and experience of the board of directors of the 

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1 bridging bank depository institution and the 

2 senior management of the bridging bank deposi3 tory institution of the unique underwriting re4 quirements not typically adequately addressed 

5 by analytics and processes used for under6 writing extensions of credit for consumers with 

7 credit scores at or above 680 for initially ex8 tending credit to the underbanked, the 

9 unbanked and consumers with credit scores at 

10 or below 680, and ongoing account management 

11 practices that take into account the attributes 

12 of risks specific to a consumers group which 

13 has derogatory events in its credit history and 

14 is likely to have subsequent derogatory events 

15 in its efforts to graduate to a credit band with 

16 a higher credit score and better credit profile. 

17 (2) COMMUNITY REINVESTMENT ACT OF 1977.— 

18 The appropriate banking agency shall take into ac19 count a proposed bridging bank depository institu20 tion’s description of how it will meet its Community 

21 Reinvestment Act of 1977 objectives in the same 

22 way that a national bank is required to meet its 

23 Community Reinvestment Act objectives. 

24 (3) GRADUATION PROGRAM.—The appropriate 

25 banking agency shall take into account a proposed 

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1 bridging bank depository institution’s program to 

2 develop and implement a phased approach to moving 

3 consumers with credit scores at or below 680 from 

4 their current credit score into higher bands of credit 

5 scores and the implementation of specialized policies 

6 and procedures, practices and technology to encour7 age and support the success of the customer Grad8 uation Program. The Graduation Program shall in9 clude an education component which provides in rea10 sonable detail what a consumer shall do to move 

11 from 1 credit scoring band to a higher credit scoring 

12 band, including providing opportunities for the con13 sumer to develop a favorable credit history with the 

14 bridging bank depository institution. 

15 (f) POLICY.— 

16 (1) IN GENERAL.—The marketplace is normally 

17 the best regulator of economic activity, and competi18 tion within the marketplace promotes efficiency and 

19 better customer service. Accordingly, the appropriate 

20 banking agency’s policy shall be to approve pro21 posals to establish bridging bank depository institu22 tions that have a reasonable chance of success and 

23 that will be operated in a safe and sound manner. 

24 It shall not be the policy of the appropriate banking 

25 agency to ensure that a proposal to establish a 

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1 bridging bank depository institution is without risk 

2 to the organizers or to protect existing institutions 

3 from healthy competition from a new bridging bank 

4 depository institution. 

5 (2) POLICY CONSIDERATIONS.—In evaluating 

6 an application to establish a bridging bank deposi7 tory institution, the appropriate banking agency 

8 shall consider whether the proposed bridging bank 

9 depository institution— 

10 (A) has organizers who are familiar with 

11 applicable Federal and State banking laws and 

12 regulations, and the credit and training needs 

13 of the underbanked, the unbanked and con14 sumers with credit scores at or below 680; 

15 (B) has competent management, including 

16 a board of directors, with ability and experience 

17 relevant to the types of services to be provided, 

18 especially the ability and experience to design 

19 and provide financial services to the under20 banked, the unbanked and consumers with 

21 credit scores at or below 680; 

22 (C) has minimum capital of at least 

23 $10,000,000 and that is sufficient to support 

24 the projected volume and type of banking busi25 ness that focuses on the needs of the undermstockstill on DSKH9S0YB1PROD with BILLS

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1 banked, the unbanked and consumers with 

2 credit scores at or below 680; 

3 (D) can reasonably be expected to achieve 

4 and maintain profitability within a reasonable 

5 time; 

6 (E) will be operated in a safe and sound 

7 manner; and 

8 (F) will be well capitalized for the first 

9 three years after opening for business. 

10 (g) ADDITIONAL FACTORS.—The appropriate bank11 ing agency may also consider additional factors listed in 

12 section 6 of the Federal Deposit Insurance Act, including 

13 the risk to the Deposit Insurance Fund, and whether the 

14 proposed bridging bank depository institution’s corporate 

15 powers are consistent with the purposes of the Federal De16 posit Insurance Act and this Act. 

17 (h) APPROPRIATE BANKING AGENCY EVALUA18 TION.—The appropriate banking agency shall evaluate as 

19 a whole a proposed bridging bank depository institution’s 

20 organizing group and its business plan or operating plan. 

21 An organizing group and its business plan or operating 

22 plan shall be stronger in markets where economic condi23 tions are marginal or competition is intense. 

24 (i) ORGANIZING GROUP.— 

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1 (1) IN GENERAL.—Strong organizing groups 

2 generally include diverse business and financial in3 terests and community involvement. An organizing 

4 group shall have the experience, competence, willing5 ness, and ability to be active in directing the pro6 posed bridging bank depository institution’s affairs 

7 in a safe and sound manner. The bridging bank de8 pository institution’s initial board of directors gen9 erally should be comprised of many, if not all, of the 

10 organizers. The business plan or operating plan and 

11 other information supplied in the application shall 

12 demonstrate an organizing group’s collective ability 

13 to establish and operate a successful bridging bank 

14 depository institution in the economic and competi15 tive conditions of the market to be served. Each or16 ganizer should be knowledgeable about the business 

17 plan or operating plan. 

18 (2) MANAGEMENT SELECTION.—The initial 

19 board of directors shall select competent senior exec20 utive officers before the appropriate banking agency 

21 may grant final approval. As a condition of the char22 ter approval, the appropriate banking agency shall 

23 have the right to object to and preclude the hiring 

24 of any officer, or the appointment or election of any 

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1 director, for a 2-year period from the date the bridg2 ing bank depository institution commences business. 

3 (j) FINANCIAL RESOURCES.— 

4 (1) Each organizer shall have a history of re5 sponsibility, personal honesty, and integrity. Per6 sonal wealth is not a prerequisite to become an orga7 nizer or director of a bridging bank depository insti8 tution. 

9 (2) Any financial or other business arrange10 ment, direct or indirect, between the organizing 

11 group or other insider and the proposed bridging 

12 bank depository institution shall be on nonpref13 erential terms. 

14 (k) ORGANIZATIONAL EXPENSES.—Organizers are 

15 expected to contribute time and expertise to the organiza16 tion of the bridging bank depository institution. Orga17 nizers should not bill excessive charges to the bridging 

18 bank depository institution for professional and consulting 

19 services or unduly rely upon these fees as a source of in20 come. 

21 (l) NO CONTINGENCY FEES.—A proposed bridging 

22 bank depository institution shall not pay any fee that is 

23 contingent upon an appropriate banking agency decision. 

24 Organizational expenses for denied applications are the 

25 sole responsibility of the organizing group. 

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1 (m) BUSINESS PLAN OR OPERATING PLAN.— 

2 (1) IN GENERAL.— 

3 (A) SUBMISSION REQUIRED.—Organizers 

4 of a proposed bridging bank depository institu5 tion shall submit a business plan or operating 

6 plan that adequately addresses the appropriate 

7 statutory and policy considerations. The plan 

8 shall reflect sound banking principles and dem9 onstrate realistic assessments of risk in light of 

10 economic and competitive conditions in the mar11 ket for serving the underbanked, the unbanked 

12 and consumers with credit scores at or below 

13 680. 

14 (B) OFFSETTING DEFICIENCIES.—The ap15 propriate banking agency shall offset defi16 ciencies in 1 factor by strengths in 1 or more 

17 other factors so long as the ability to serve the 

18 underbanked, the unbanked and consumers 

19 with credit scores at or below 680 is the most 

20 important factor and entitled to the greatest 

21 weight. 

22 (2) EARNINGS PROSPECTS.—The organizing 

23 group shall submit pro forma balance sheets and in24 come statements as part of the business plan or op25 erating plan. 

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1 (3) MANAGEMENT.— 

2 (A) EVALUATION OF MANAGERIAL ABIL3 ITY.—The organizing group shall include in the 

4 business plan or operating plan information suf5 ficient to permit the appropriate banking agen6 cy to evaluate the overall management ability of 

7 the organizing group, especially the ability to 

8 provide financial services to the underbanked, 

9 the unbanked, and consumers with credit scores 

10 at or below 680. 

11 (B) AGENCY OBJECTION TO PROPOSED OF12 FICER OR DIRECTOR.—The organizing group 

13 may not hire an officer or elect or appoint a di14 rector if the appropriate banking agency objects 

15 to that person at any time prior to the date the 

16 bridging bank depository institution commences 

17 business. 

18 (4) CAPITAL.—A proposed bridging bank de19 pository institution shall have initial capital of at 

20 least $10,000,000. 

21 (5) COMMUNITY SERVICE.— 

22 (A) The business plan or operating plan 

23 shall indicate the organizing group’s knowledge 

24 of and plans for serving the underbanked, the 

25 unbanked and consumers with credit scores at 

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1 or below 680. The organizing group shall evalu2 ate the banking needs of the underbanked, the 

3 unbanked and consumers with credit scores at 

4 or below 680. The business plan or operating 

5 plan shall demonstrate how the proposed bridg6 ing bank depository institution responds to 

7 those needs consistent with the safe and sound 

8 operation of the bridging bank depository insti9 tution. 

10 (B) As part of its business plan or oper11 ating plan, the organizing group shall submit a 

12 statement that demonstrates its plans to 

13 achieve Community Reinvestment Act objec14 tives. 

15 (C) Because community support is impor16 tant to the long-term success of a bridging 

17 bank depository institution, the organizing 

18 group shall include plans for attracting and 

19 maintaining community support. 

20 (6) SAFETY AND SOUNDNESS.—The business 

21 plan or operating plan shall demonstrate that the or22 ganizing group is aware of, and understands, Fed23 eral and State banking laws and regulations, and 

24 safe and sound banking operations and practices in 

25 the context of serving the needs of the underbanked, 

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1 the unbanked and consumers with credit scores at or 

2 below 680. 

3 (7) PROCEDURES.— 

4 (A) PREFILING MEETING.—The appro5 priate banking agency shall require a prefiling 

6 meeting with the organizers of a proposed 

7 bridging bank depository institution before the 

8 organizers file an application. 

9 (B) BUSINESS PLAN OR OPERATING

10 PLAN.—An organizing group shall file a busi11 ness plan or operating plan that addresses the 

12 requirements of the appropriate banking agen13 cy. 

14 (C) CONTACT PERSON.—The organizing 

15 group shall designate a contact person to rep16 resent the organizing group in all contacts with 

17 the appropriate banking agency. The contact 

18 person shall be an organizer and proposed di19 rector of the new bridging bank depository in20 stitution or another person approved by the ap21 propriate banking agency. 

22 (8) DECISION NOTIFICATION.—The appropriate 

23 banking agency shall notify the contact person in 

24 writing of its decision on an application. 

25 (9) ACTIVITIES.— 

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1 (A) ESTABLISHMENT.—Before the appro2 priate banking agency grants final approval, a 

3 proposed bridging bank depository institution 

4 shall be established as a legal entity. A pro5 posed bridging bank depository institution may 

6 offer and sell securities prior to appropriate 

7 banking agency preliminary approval of the pro8 posed bridging bank depository institution’s 

9 charter application, provided that the proposed 

10 bridging bank depository institution has filed 

11 articles of association, articles of incorporation, 

12 or other appropriate organizational documents, 

13 an organization certificate, and a completed 

14 charter application and the proposed bridging 

15 bank depository institution complies with the 

16 securities offering regulations of the Comp17 troller of the Currency, 12, Code of Federal 

18 Regulations, 16 and any applicable State secu19 rities law. 

20 (B) ELECTION OF BOARD.—In addition, 

21 the organizing group shall elect a board of di22 rectors. 

23 (C) PUBLIC OFFERING.—For all capital 

24 obtained through a public offering a proposed 

25 bridging bank depository institution shall use 

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1 an offering circular that complies with the secu2 rities offering regulations of the Comptroller of 

3 the Currency, 12, Code of Federal Regulations, 

4 16 and any applicable State securities law. 

5 (D) CAPITAL.—A bridging bank depository 

6 institution in organization shall raise its capital 

7 before it commences business. Preliminary ap8 proval expires if a bridging bank depository in9 stitution in organization does not raise the re10 quired capital within 12 months from the date 

11 the appropriate banking agency grants prelimi12 nary approval. Approval expires if the bridging 

13 bank depository institution does not commence 

14 business within 18 months from the date the 

15 appropriate banking agency grants preliminary 

16 approval. 

17 SEC. 5. LIMITATION ON POWERS OF APPROPRIATE BANK18 ING AGENCY. 

19 Notwithstanding any other law or regulation, no 

20 bridging bank depository institution may be required to 

21 use risk weights or other capital adequacy measures which 

22 make the bridging bank depository institution unable to 

23 properly price its products and services or otherwise serve 

24 the underbanked, the unbanked and consumers with credit 

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1 quire the use of risk weights or capital adequacy measures 

2 for a bridging bank depository institution that makes the 

3 bridging bank depository institution uncompetitive, makes 

4 its products and services too expensive for the under5 banked, the unbanked or consumers with a credit score 

6 at or below 680 or otherwise prevents the bridging bank 

7 depository institution from serving the underbanked, the 

8 unbanked and consumers with a credit score at or below 

9 680. Neither the Federal Deposit Insurance Corporation 

10 nor the National Credit Union Administration Board shall 

11 discriminate in its insurance premium charges against 

12 bridging bank depository institutions and shall charge 

13 bridging bank depository institutions the same premium 

14 that it would otherwise charge a traditional community 

15 bank or traditional credit union, as appropriate, which 

16 does not serve the underbanked, the unbanked or con17 sumers with a credit score at 680 or below. 

18 SEC. 6. COORDINATION AND PROMOTION OF THE COMMU19 NITY REINVESTMENT ACT OF 1977. 

20 To strengthen the effectiveness of the Community 

21 Reinvestment Act of 1977 and to encourage financial in22 stitutions subject to the Community Reinvestment Act of 

23 1977 to support the efforts of bridging bank depository 

24 institutions, the appropriate banking agencies shall grant 

25 the highest level of weighted Community Reinvestment 

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1 Act of 1977 credit to financial institutions subject to such 

2 Act in each case, as appropriate, under the lending test 

3 where a loan is made to a bridging bank depository insti4 tution, under the investment test where an investment is 

5 made in a bridging bank depository institution, under the 

6 service test where a service is provided to a bridging bank 

7 depository institution and under the community develop8 ment test when a donation is made to a bridging bank 

9 depository institution. 

10 SEC. 7. ADDITIONAL POWERS OF A BRIDGING BANK DEPOS11 ITORY INSTITUTION. 

12 In addition to the powers granted herein and in any 

13 regulations issued by the appropriate banking agency, 

14 each bridging bank depository institution shall have all the 

15 powers otherwise applicable to a national bank, if the 

16 bridging bank depository institution is chartered by the 

17 Comptroller of the Currency, to a savings association, if 

18 the bridging bank depository institution is chartered by 

19 the Director of the Office of Thrift Supervision, to an in20 sured credit union, if the bridging bank depository institu21 tion is chartered by the National Credit Union Adminis22 tration, or to a State bank, if the bridging bank depository 

23 institution is chartered by a State bank supervisor, and, 

24 except as provided in this Act or in any regulations issued 

25 pursuant to the authority granted in section 106, shall be 

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1 subject to the regulations otherwise applicable to such na2 tional bank, savings association, insured credit union or 

3 State bank, as the case may be. 

4 SEC. 8. REPORTS TO THE CONGRESS. 

5 Before the expiration of the 120-day period beginning 

6 on the date of the first issuance of a charter pursuant 

7 to this Act, and annually thereafter, each appropriate Fed8 eral banking agency shall report to the appropriate com9 mittees of the Congress, with respect to each such pe10 riod— 

11 (1) an overview of actions taken by each such 

12 Federal banking agency in furtherance of the pur13 poses of this Act; 

14 (2) an overview of actions taken by bridging 

15 bank depository institutions to serve the needs of the 

16 underbanked, the unbanked, and consumers with 

17 credit scores at or below 680; 

18 (3) a description of the impact of the exercise 

19 of such authority on the financial system, supported, 

20 to the extent possible, by specific data; 

21 (4) an analysis of the effectiveness of the Grad22 uation Program, including an analysis of any 

23 progress made from 1 credit scoring band to a high24 er credit scoring band and the number of consumers 

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1 who moved from 1 credit scoring band to a higher 

2 credit scoring band; 

3 (5) a description of challenges that remain in 

4 the financial system for the underbanked, the 

5 unbanked, and consumers with a credit score of 680 

6 or below; and 

7 (6) recommendations on additional actions that 

8 should be taken to further the purposes of this Act. 

9 SEC. 9. REGULATIONS. 

10 (a) REGULATIONS REQUIRED.—Before the end of the 

11 180-day period beginning on the date of the enactment 

12 of this Act, each appropriate Federal banking agency, 

13 after consultation with each other appropriate Federal 

14 banking agency, and public notice and an opportunity for 

15 comment, shall prescribe regulations to carry out the pur16 poses and provisions of this chapter, including regulations 

17 for the chartering of bridging bank depository institutions 

18 and prescribing the form and content of any application 

19 to be filed with such appropriate Federal banking agency 

20 in connection therewith. 

21 (b) EFFECTIVE DATE OF REGULATIONS.—The regu22 lations prescribed under subsection (a) shall take effect 

23 not later than 1 month after the publication in final form. 

24 (c) EXPEDITED CONSIDERATION.—Each appropriate 

25 Federal banking agency with chartering authority shall exmstockstill on DSKH9S0YB1PROD with BILLS

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1 pedite its consideration of applications for the chartering 

2 of bridging bank depository institutions. The Federal De3 posit Insurance Corporation and the National Credit 

4 Union Administration Board shall expedite its consider5 ation of applications for deposit insurance with respect to 

6 applications to form de novo bridging bank depository in7 stitutions. The Board of Governors of the Federal Reserve 

8 System shall expedite its consideration of membership to 

9 the Federal Reserve System by bridging bank depository 

10 institutions. 

11 SEC. 10. CORRESPONDING CHANGES TO INTERNAL REV12 ENUE CODE OF 1986. 

13 (a) The Internal Revenue Code of 1986 is amended 

14 by inserting after section 103 the following new section: 

15 ‘‘§ 103A. Interest on bridging bank depository institu16 tion deposits 

17 ‘‘Interest on savings and other interest bearing de18 posits paid by bridging bank depository institutions (with19 in the meaning of the Bridging Bank to Recovery Act of 

20 2009) shall be exempt from income taxation now or here21 after imposed by the United States or by any State, terri22 torial, or local taxing authority.’’. 

23 (b) Section 108 of the Internal Revenue Code of 1986 

24 (relating to income from discharge of indebtedness) is 

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1 amended by adding at the end the following new sub2 section: 

3 ‘‘(l) BRIDGING BANK DEPOSITORY INSTITUTIONS.— 

4 ‘‘(1) IN GENERAL.—Notwithstanding section 

5 61, income from the discharge of indebtedness in 

6 connection with the modification or repurchase of a 

7 subprime debt instrument shall not be included in 

8 gross income if a bridging bank depository institu9 tion (within the meaning of the Bridging Bank to 

10 Recovery Act of 2009) is the beneficial owner of 

11 such subprime debt instrument at the time of the 

12 modification or repurchase. 

13 ‘‘(2) SUBPRIME DEBT INSTRUMENT.—For pur14 poses of this subsection, the term ‘subprime debt in15 strument’ shall be defined from time to time by the 

16 Financial Institutions Examination Council. 

17 ‘‘(3) AUTHORITY TO PRESCRIBE REGULA18 TIONS.—The Secretary may prescribe such regula19 tions as may be necessary or appropriate for pur20 poses of applying this subsection.’’. 

21 (c) Section 1001 of the Internal Revenue Code of 

22 1986 (relating to the determination of amount of and rec23 ognition of gain or loss) is amended by adding at the end 

24 the following new subsection: 

25 ‘‘(f) BRIDGING BANK DEPOSITORY INSTITUTIONS.— 

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1 ‘‘(1) IN GENERAL.—A modification of the terms 

2 of a subprime debt instrument shall not result in a 

3 sale or other disposition of property within the 

4 meaning of this section if a bridging bank depository 

5 institution (within the meaning of the Bridging 

6 Bank to Recovery Act of 2009) is the beneficial 

7 owner of such subprime debt instrument at the time 

8 of the modification. 

9 ‘‘(2) SUBPRIME DEBT INSTRUMENT.—For pur10 poses of this subsection, the term ‘subprime debt in11 strument’ shall be defined from time to time by the 

12 Financial Institutions Examination Council.’’. 

Æ 

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