I

103D CONGRESS

1ST SESSION H. R. 1699

To provide assistance to community development lending institutions to increase the availability of credit to low-income families and for economic

and community development and other activities in low-income neighborhoods, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 5, 1993

Ms. WATERS (for herself, Mr. RANGEL, Mr. MFUME, Mr. CLAY, Ms. NORTON,

and Mrs. MEEK) introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To provide assistance to community development lending institutions to increase the availability of credit to lowincome families and for economic and community development and other activities in low-income neighborhoods,

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 ‘‘Community Banking

5 and Economic Empowerment Act’’.
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1 SEC. 2. AUTHORITY OF SECRETARY.

2 (a) IN GENERAL.—To make credit and credit-related

3 services available to low-income families and others not

4 adequately served by traditional lending institutions and

5 promote community development, economic development,

6 and revitalization of low-income neighborhoods, the Sec7 retary of Housing and Urban Development shall provide,

8 to the extent amounts are provided in appropriation

9 Acts—

10 (1) assistance under section 4 to community de11 velopment lenders (including community develop12 ment banks and other community development fi13 nancial institutions meeting the requirements under

14 section 3) and other eligible entities that have sub15 mitted applications under section 6 that have been

16 approved by the Secretary and have entered into

17 agreements with the Secretary under section 7; and

18 (2) technical assistance under section 9 to as19 sist in organizing and operating community develop20 ment lenders.

21 (b) CONSULTATION.—The Secretary of Housing and

22 Urban Development shall consult with the Secretary of the

23 Treasury in developing, implementing, and carrying out

24 this Act, and in providing assistance to community devel25 opment lenders under section 4.
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1 SEC. 3. ELIGIBLE COMMUNITY DEVELOPMENT LENDERS.

2 (a) IN GENERAL.—Applications for assistance under

3 section 4 may be submitted only by the following entities:

4 (1) COMMUNITY DEVELOPMENT LENDERS.—

5 (A) COMMUNITY DEVELOPMENT BANKS.—

6 Depository institutions (as such term is defined

7 in section 3(c) of the Federal Deposit Insurance

8 Act) and credit unions that are organized for

9 the purposes described in subsection (b), or af10 filiates or subsidiaries of depository institutions

11 or credit unions that are organized for such

12 purposes, including community development

13 credit unions, savings and loan associations,

14 and other depository institutions; except that

15 the Secretary may not provide assistance under

16 section 4 to a community development bank es17 tablished or organized by, or as an affiliate or

18 subsidiary of, any depository institution that

19 has total assets (not including the assets of the

20 community development bank), as of the most

21 recent full fiscal year for the institution, of

22 more than $10,000,000.

23 (B) COMMUNITY DEVELOPMENT FINAN24 CIAL INSTITUTIONS.—Any other corporation,

25 partnership, organization, agency, person, or

26 other entity organized for the purposes de-
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1 scribed in subsection (b), including for-profit

2 and nonprofit entities, community development

3 corporations, microenterprise organizations,

4 community organizations, and other entities

5 and persons.

6 (2) ELIGIBLE ENTITIES ESTABLISHING COMMU7 NITY DEVELOPMENT LENDERS.—Any corporation,

8 partnership, organization, agency, person, or other

9 entity that is engaged in organizing or establishing

10 a community development bank or community devel11 opment financial institution.

12 (b) PURPOSE.—To be eligible to receive assistance

13 under section 4, a community development lender applying

14 for such assistance (or to be established by the eligible

15 entity applying for such assistance) shall have among its

16 principal purposes making credit and credit-related serv17 ices available to low-income families and in low-income

18 neighborhoods and promoting the development and revital19 ization of low-income neighborhoods. The community de20 velopment lender shall carry out such purpose by making

21 loans to individuals, families, businesses, organizations,

22 and other entities and conducting such other activities and

23 services relating to making loans (such as loan counseling

24 and servicing) as the lender considers appropriate. Such

25 loans may include mortgage loans, loans for housing devel-
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1 opment, rehabilitation, and weatherization, business devel2 opment and assistance loans, personal loans, operating

3 loans, construction loans, loans for community and

4 economic development activities, and other repayable

5 assistance.

6 (c) GOVERNANCE.—To be eligible to receive assist7 ance under section 4, a community development lender ap8 plying for such assistance (or to be established by the eligi9 ble entity applying for such assistance) shall be governed

10 by a board of directors that—

11 (1) is solely responsible for determining policy

12 for the community development lender with respect

13 to management and operations, lending activities,

14 loan standards and implementation, employment,

15 asset management, and other any other issues; and

16 (2) includes among its members a significant

17 number of members who are individuals meeting the

18 requirements of any of subparagraphs (A) through

19 (D), who shall include—

20 (A) individuals who are members of low-in21 come families;

22 (B) individuals who are residents of the

23 low-income neighborhood served by the lender;

24 (C) individuals who are experienced in pro25 viding financial assistance or financial advice to
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1 low-income individuals or residents, businesses,

2 or organizations in low-income neighborhoods;

3 and

4 (D) individuals who have significant expe5 rience in serving the low-income neighborhood

6 served by the lender, the community in which

7 such neighborhood is located, or any other low8 income neighborhood.

9 SEC. 4. CAPITAL AND OPERATING ASSISTANCE FOR COM10 MUNITY DEVELOPMENT LENDERS.

11 (a) AUTHORITY.—The Secretary may provide assist12 ance under this section to community development lenders

13 and eligible entities establishing community development

14 lenders, for the purposes under subsection (b).

15 (b) PURPOSES.—Assistance under this section may

16 be used only as provided in the assistance agreement

17 under section 7 for the community development lender or

18 eligible entity and only for the following purposes:

19 (1) FEASIBILITY STUDIES.—To carry out stud20 ies to determine the feasibility of establishing a pro21 gram to make loans for the purposes under section

22 3(b) within a particular low-income neighborhood.

23 (2) CAPITAL ASSISTANCE.—To provide capital

24 for the community development lender—
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1 (A) to establish or supplement amounts

2 available for loans for the purposes under sec3 tion 3(b);

4 (B) to provide credit enhancement for

5 loans for the purposes under section 3(b);

6 (C) to establish or supplement capital re7 serves of the lender; and

8 (D) to carry out other activities, as the

9 Secretary may provide.

10 (3) OPERATING COSTS.—To provide amounts to

11 cover operating costs of the community development

12 lender, including marketing and management activi13 ties, business planning and counseling services, staff

14 training, planning costs, costs relating to establish15 ing the community development lender or changing

16 the activities or management of a depository institu17 tion, other financial institution, or other organiza18 tion or entity to include community development

19 lending activities.

20 (c) OTHER TERMS.—The Secretary may establish

21 any terms and conditions of assistance under this section

22 that the Secretary considers appropriate to carry out the

23 purposes of this Act, including limitations on the amount

24 of assistance provided to any community development

25 lender or eligible entity, limitations on the number of ap-
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1 plications that may be approved for any single community

2 development lender or eligible entity, and requirements

3 and limitations for the amounts and timing of the dis4 bursement of assistance. Separate terms and conditions

5 of assistance may be established for community develop6 ment banks and community development financial institu7 tions.

8 (d) NON-FEDERAL FUNDS REQUIREMENT.—The

9 Secretary may not provide assistance under this section

10 to any eligible entity for the establishment of a community

11 development lender in an amount in excess of 9 times the

12 amount that the entity certifies, as the Secretary shall re13 quire, that the entity will contribute from non-Federal

14 sources to the community development lender established

15 with amounts provided under this section.

16 SEC. 5. REQUIREMENTS OF ASSISTED COMMUNITY DEVEL17 OPMENT LENDERS.

18 (a) PROHIBITION OF DIRECT ASSISTANCE.—A com19 munity development lender that receives assistance under

20 section 4 (or established by an eligible entity that receives

21 such assistance) may not provide amounts to any person

22 from assistance received under such section in the form

23 of a grant or nonrepayable advance or on any other

24 nonrepayable basis, during the assistance agreement term
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1 established by the assistance agreement for the lender

2 under section 7.

3 (b) LOW-INCOME FAMILY REQUIREMENTS.—

4 (1) REQUIREMENT.—In each calendar year dur5 ing the applicable assistance agreement term, a com6 munity development lender that receives assistance

7 under section 4 (or established by an eligible entity

8 that receives such assistance) shall make loans

9 under section 3(b) benefiting low-income families—

10 (A) in a number that is not less than 50

11 percent of the total number of loans made by

12 the lender during such year; and

13 (B) in an amount such that the sum of the

14 principal amounts of such loans is not less than

15 50 percent of the sum of the principal amounts

16 of all loans made by the lender during such

17 year.

18 (2) DETERMINATION OF BENEFIT.—

19 (A) DIRECT BENEFIT.—A loan shall be

20 considered to benefit a low-income family for

21 purposes of paragraph (1) if the loan—

22 (i) is made to such a family;

23 (ii) is made for an activity that is car24 ried out in a low-income neighborhood and

25 for providing services for such families;
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1 (iii) is made for providing facilities de2 signed for the use predominantly by such

3 families; or

4 (iv) is made for an activity that in5 volves employment of persons, a majority

6 of whom are members of such families.

7 (B) ACTIVITIES OF GENERAL BENEFIT.—

8 In any case in which an activity assisted with

9 a loan is designed to serve an area generally

10 and is clearly designed to meet identified needs

11 of low-income families in such area, such loan

12 or activity shall be considered to benefit low-in13 come families for purposes of paragraph (1) to

14 the extent that the area is a low-income neigh15 borhood.

16 (C) HOUSING.—A loan for the acquisition,

17 construction, or rehabilitation of property to

18 provide housing shall be considered to benefit

19 low-income families for purposes of paragraph

20 (1) only to the extent that such housing, upon

21 completion, is occupied by low-income families.

22 (c) LOW-INCOME NEIGHBORHOOD REQUIRE23 MENTS.—In each calendar year during the applicable as24 sistance agreement term, a community development lender

25 that receives assistance under section 4 (or established by
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1 an eligible entity that receives such assistance) shall make

2 loans under section 3(b) for facilities or activities that

3 serve the low-income neighborhood served by the lender—

4 (1) in a number that is not less than 50 percent

5 of the total number of loans made by the lender dur6 ing such year; and

7 (2) in an amount such that the sum of the prin8 cipal amounts of such loans is not less than 50 per9 cent of the sum of the principal amounts of all loans

10 made by the lender during such year.

11 (d) EMPLOYMENT PLAN.—During the applicable as12 sistance agreement term, a community development lender

13 that receives assistance under section 4 (or established by

14 an eligible entity that receives such assistance) shall estab15 lish and comply with a written employment plan under this

16 subsection. The Secretary shall, by regulation, require that

17 each employment plan under this subsection set forth a

18 policy for hiring employees of the community development

19 lender that—

20 (1) furthers the purposes of this Act by provid21 ing employment opportunities in the neighborhood

22 served by the community development lender for

23 residents of the neighborhood; and

24 (2) gives preference in hiring to—
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1 (A) individuals who are members of low-in2 come families residing in the neighborhood

3 served by the community development lender;

4 and

5 (B) individuals who were formerly em6 ployed in positions at any office or branch of a

7 depository institution, credit union, or other fi8 nancial institution that is or was located in the

9 neighborhood served by the community develop10 ment lender and who are not employed in such

11 positions because of the closing or reorganiza12 tion of the office, branch, or institution, or be13 cause of the elimination of such positions or

14 any decrease in compensation paid for such

15 positions.

16 (e) RESERVE REQUIREMENTS.—

17 (1) MAINTENANCE OF RESERVE.—During the

18 applicable assistance agreement term, a community

19 development lender that receives assistance under

20 section 4 (or established by an eligible entity that re21 ceives such assistance) shall maintain, at all times,

22 a reserve against losses on loans and any other

23 losses in the amount determined under paragraph

24 (2).
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1 (2) ESTABLISHMENT OF REQUIREMENTS.—The

2 Secretary shall, by regulation, establish reserve

3 amounts to be maintained by community develop4 ment lenders taking into consideration the purposes

5 of such lenders, the nature of lending engaged in by

6 such lenders, the size and amount of business of

7 such lenders, the need for such lending in the com8 munities and low-income neighborhoods served by

9 such lenders, and any other factors the Secretary

10 considers appropriate. The regulations may establish

11 separate reserve requirements for community devel12 opment banks and community development financial

13 institutions.

14 (3) REPLENISHMENT.—If at any time during

15 the applicable assistance agreement term, the

16 amount reserved by a community development lender

17 under this subsection is less than the amount re18 quired to be reserved under the regulations issued

19 pursuant to paragraph (2), the Secretary may take

20 such actions as the Secretary may, by regulation,

21 provide that are consistent with the purposes of this

22 Act, including withholding any assistance amounts

23 to be provided to the lender under the agreement

24 under section 7 but not yet disbursed and requiring

25 the lender to replenish the reserve by regular con-
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1 tributions in the amounts determined by the

2 Secretary.

3 (f) STAFF.—During the applicable assistance agree4 ment term, a community development lender that receives

5 assistance under section 4 (or established by an eligible

6 entity that receives assistance under such section) shall

7 maintain personnel qualified and capable of conducting

8 the activities described under section 3(b) and the other

9 activities of the lender relating to community development,

10 as the Secretary may require.

11 SEC. 6. APPLICATION AND APPROVAL FOR ASSISTANCE.

12 (a) REQUIREMENT.—The Secretary may provide as13 sistance under section 4 only to community development

14 lenders and eligible entities establishing community devel15 opment lenders that have submitted applications under

16 this section to the Secretary that have been approved

17 under subsection (d).

18 (b) TIME AND MANNER.—The Secretary shall estab19 lish requirements regarding the submission of applications

20 under this section, which shall include requirements for

21 the time and manner of submission.

22 (c) CONTENTS.—An application under this section

23 shall contain the following information:

24 (1) COMMUNITY DEVELOPMENT LENDER.—A

25 description of—
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1 (A) the existing community development

2 bank or community development financial insti3 tution to be assisted; or

4 (B) in the case of an eligible entity submit5 ting the application for assistance, the commu6 nity development lender to be established by the

7 eligible entity, the existing relationship between

8 the eligible entity and the community develop9 ment lender to be established, and any continu10 ing relationship that will exist between the

11 eligible entity and the community development

12 lender.

13 (2) LOW-INCOME NEIGHBORHOOD SERVED.—

14 Identification and a description of the low-income

15 neighborhood in which the community development

16 lender is, or is to be, located and conduct its prin17 cipal operations and a description of the existing

18 availability of credit and credit-related services in

19 such neighborhood.

20 (3) TYPES OF BUSINESS.—A description of the

21 types of business engaged in, or to be engaged in,

22 by the community development lender and of the

23 need for such business in the neighborhood served

24 by the community development lender.
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1 (4) BOARD OF DIRECTORS AND OPERATION.—

2 In the case of an application by an existing commu3 nity development lender, a description of the board

4 of directors of the community development lender

5 and the structure of the management and operations

6 of the community development lender.

7 (5) FINANCIAL EXPERTISE.—In the case of an

8 application by an existing community development

9 lender, a description of any lending or financial ex10 pertise or experience of the members of the board of

11 directors of the community development lender and

12 the managers or employees of the lender.

13 (6) FINANCIAL HISTORY.—In the case of an ap14 plication by an existing community development

15 lender, any financial information regarding the com16 munity development lender that the Secretary con17 siders necessary in determining whether to provide

18 assistance to the community development lender, in19 cluding information regarding any history of compli20 ance with the requirements of section 5.

21 (7) REGULATION.—Identification of any Fed22 eral, State, and local laws, ordinances, and regula23 tions under which the financial operations of the

24 community development lender are, or are to be,

25 subject to the supervision, approval, regulation, or
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1 insuring of any agency or other instrumentality of

2 the Federal Government or the State or local gov3 ernment and identification of the agency or instru4 mentality.

5 (8) NEW COMMUNITY DEVELOPMENT LEND6 ERS.—In the case of an application by an eligible

7 entity for assistance for the establishment of a com8 munity development lender, any financial, organiza9 tional, or other information that the Secretary con10 siders necessary in determining whether to provide

11 such assistance.

12 (9) ASSISTANCE.—A description of the amount

13 of assistance for which the community development

14 lender or eligible entity is applying and a description

15 of the purposes for which such assistance will be

16 used.

17 (10) EMPLOYMENT PLAN.—An employment

18 plan in accordance with the regulations issued under

19 section 5(d).

20 (11) COMPLIANCE WITH REQUIREMENTS.—A

21 description of the actions to be taken by the commu22 nity development lender (or the eligible entity estab23 lishing the community development lender) to ensure

24 compliance with the requirements under section 5.
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1 (12) OTHER.—Any other information the Sec2 retary considers appropriate to carry out, and en3 sure compliance with, the provisions of this Act.

4 (d) REVIEW AND APPROVAL.—

5 (1) REVIEW.—The Secretary shall promptly re6 view each application submitted under this section.

7 (2) MINIMUM STANDARDS FOR APPROVAL.—

8 The Secretary may approve an application under

9 this section for assistance only if the Secretary de10 termines, based on the information contained in an

11 application, that—

12 (A) the lender will operate in accordance

13 with the requirements of this Act and in a fi14 nancially safe and sound manner; and

15 (B) the assistance is necessary and appro16 priate to facilitate the provision of credit and

17 credit-related services in the neighborhood

18 served by the lender to low-income families and

19 others not adequately served by traditional

20 lending institutions.

21 (3) SELECTION CRITERIA.—The Secretary shall

22 approve applications under this subsection based on

23 competitive selection criteria, which the Secretary

24 shall establish by regulation.
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1 (4) NOTIFICATION.—The Secretary shall

2 promptly notify each applicant of the approval or

3 disapproval of the applicant’s application. In the

4 case of any disapproval, such notification shall in5 clude a statement of the reasons for the disapproval

6 and of the availability of technical assistance under

7 section 9.

8 SEC. 7. ASSISTANCE AGREEMENTS.

9 (a) REQUIREMENT.—The Secretary may not provide

10 assistance under section 4 for an application for such as11 sistance approved under section 6 unless the community

12 development lender or eligible entity submitting the appli13 cation enters into a written agreement with the Secretary

14 under this section.

15 (b) CONTENTS.—An agreement under this section

16 shall provide the following:

17 (1) NEIGHBORHOOD SERVED.—A delineation of

18 the boundaries of the low-income neighborhood with19 in which the community development lender shall be

20 located and in which the lender shall conduct its

21 principal operations.

22 (2) COMPLIANCE WITH REQUIREMENTS.—That

23 the community development lender shall comply with

24 the requirements under section 5.
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1 (3) SAFE AND SOUND OPERATION.—That the

2 community development lender shall operate in a fi3 nancially safe and sound manner.

4 (4) BOOKS AND RECORDS.—That the commu5 nity development lender shall operate and maintain

6 books and records in accordance with the regulations

7 issued by the Secretary under section 8 and will pro8 vide the Secretary with access to such books and

9 records for purposes of determining the compliance

10 of the lender with the requirements of this Act and

11 the provisions of the agreement under this section.

12 (5) PERFORMANCE STANDARDS AND SANC13 TIONS.—Standards for the performance and finan14 cial operation of the community development lender

15 appropriate for the particular lender, including

16 standards relating to the lending volume, portfolio

17 performance, personnel development, service to the

18 neighborhood served by the lender, and sanctions for

19 failure to comply with such standards.

20 (6) REPORTS.—That the community develop21 ment lender (or the eligible entity establishing the

22 community development lender) shall submit reports

23 to the Secretary including such information, at such

24 times, and in such manner, as required by the Sec25 retary and provided in the agreement.
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1 (7) ASSISTANCE.—The amount of assistance to

2 be provided to the community development lender

3 (or eligible entity establishing the community devel4 opment lender), the purposes under section 4(b) for

5 which such assistance will be used, and the timing

6 and terms of the disbursement of such assistance.

7 (8) OTHER CONDITIONS.—That the community

8 development lender shall comply with any other writ9 ten conditions (which shall be contained in the

10 agreement) that the Secretary considers appropriate

11 to carry out the purposes of this Act.

12 (9) PERIOD OF COMPLIANCE.—The period dur13 ing which the community development lender shall

14 comply with the provisions of the agreement under

15 this section, which shall not be shorter than 12

16 months in duration.

17 (c) FEDERAL OR OTHER REGULATION OF LEND18 ER.—An agreement under this section may not be con19 strued to annul, alter, affect, or exempt the community

20 development lender receiving assistance pursuant to the

21 agreement (or established by the eligible entity receiving

22 such assistance) from complying with any Federal, State,

23 or local laws, ordinances, and regulations applicable to the

24 financial and other operations of community development

25 lender or with any orders or rulings of any agency or in-
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1 strumentality of the Federal Government or the State or

2 local government responsible for the supervision, approval,

3 regulation, or insuring of the community development

4 lender.

5 SEC. 8. BOOKS, RECORDS, AND AUDITS.

6 (a) BOOKS AND RECORDS.—During the applicable

7 assistance agreement term, a community development

8 lender that receives assistance under section 4 (or estab9 lished by an eligible entity that receives such assistance)

10 shall maintain the books and records of the bank in the

11 manner that the Secretary shall, by regulation, require.

12 (b) EXAMINATIONS AND AUDITS.—

13 (1) RECERTIFICATION.—The Secretary shall,

14 not less than once each year during the applicable

15 assistance agreement term, conduct an examination

16 of the books, records, and financial accounts and

17 transactions of each community development lender

18 receiving assistance under section 4 (or established

19 by an eligible entity receiving assistance under such

20 section) for the purpose of determining compliance

21 of the lender with this Act and the provisions of the

22 agreement.

23 (2) OTHER.—During the applicable assistance

24 agreement term, the Secretary may conduct any

25 other examinations and audits of such a community
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1 development lender and its accounts and trans2 actions that the Secretary considers appropriate to

3 determine the condition of the lender and compliance

4 with the provisions of the assistance agreement.

5 SEC. 9. TECHNICAL ASSISTANCE FOR ORGANIZING AND OP6 ERATING COMMUNITY DEVELOPMENT LEND7 ERS.

8 (a) ASSISTANCE TO ESTABLISH COMMUNITY DEVEL9 OPMENT LENDERS.—The Secretary shall carry out a pro10 gram under this subsection to provide technical assistance

11 in establishing community development banks and commu12 nity development financial institutions, which shall in13 clude—

14 (1) educating organizations, financial institu15 tions, governmental agencies, and other entities and

16 persons in low-income neighborhoods and elsewhere

17 regarding the need for, capabilities, functions, and

18 organization of community development lenders;

19 (2) educating and training organizations, depos20 itory and other financial institutions, and other enti21 ties and persons in organizing community develop22 ment lenders and applying for assistance under this

23 Act for establishment of community development

24 lenders;
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1 (3) recruiting, and assisting organizations, gov2 ernmental agencies, and other entities and persons

3 to recruit existing organizations, depository and

4 other financial institutions, and other entities and

5 persons to establish community development banks;

6 (4) assisting entities and persons interested in

7 establishing community development lenders in iden8 tifying community lending needs and meeting the

9 application requirements and preparing applications

10 under this Act; and

11 (5) assisting community development lenders

12 and eligible entities whose applications have been

13 disapproved under section 6(d) to submit approvable

14 applications for assistance under section 4.

15 (b) ASSISTANCE FOR OPERATING COMMUNITY DE16 VELOPMENT LENDERS.—The Secretary shall carry out a

17 program under this subsection to provide technical assist18 ance to community development lenders, which shall in19 clude—

20 (1) education and training regarding manage21 ment and operation of the lenders, including design22 ing and utilizing lending practices to target credit to

23 low-income families and neighborhoods, complying

24 with financial and accounting standards under the

25 agreement for the lender under section 7, and imple-
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1 menting effective asset management and fund devel2 opment techniques;

3 (2) collecting and disseminating information

4 from various community development lenders re5 garding successful management and operation tech6 niques, lending practices, and lending activities; and

7 (3) training personnel of lenders to meet re8 quirements under section 5(f).

9 (c) PROVISION OF ASSISTANCE.—The Secretary may

10 provide technical assistance under this section directly or

11 through public or private organizations pursuant to con12 tracts with such organizations or grants to such organiza13 tions.

14 (d) ADMINISTRATION.—The Secretary may provide

15 for making technical assistance under this section avail16 able to community development lenders and eligible enti17 ties that receive assistance under section 4 pursuant to

18 a request for such assistance in an application under sec19 tion 6, approval of the application, and the inclusion of

20 terms in the assistance agreement under section 7 provid21 ing for such assistance.
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1 SEC. 10. AVAILABILITY OF FEDERAL RESERVE SYSTEM RE2 SOURCES FOR COMMUNITY DEVELOPMENT

3 BANKS.

4 (a) IN GENERAL.—The Board of Governors of the

5 Federal Reserve System shall take such action as may be

6 necessary to ensure the availability of funds for commu7 nity development banks under the Federal Reserve Act to

8 the maximum extent practicable.

9 (b) REPORT.—Before the end of the 6-month period

10 beginning on the date of the enactment of this Act, the

11 Board of Governors of the Federal Reserve System shall

12 submit a report to the Congress containing recommenda13 tions for legislative actions which the Board determines

14 to be appropriate to increase liquidity lending to commu15 nity development banks by the Federal reserve banks to

16 carry out the purposes of this Act.

17 SEC. 11. RELATIONSHIP TO COMMUNITY REINVESTMENT

18 ACT OF 1977.

19 Section 807(b) of the Community Reinvestment Act

20 of 1977 (12 U.S.C. 2906(b)) is amended by adding at the

21 end the following new paragraph:

22 ‘‘(3) COORDINATION WITH COMMUNITY BANK23 ING AND ECONOMIC EMPOWERMENT ACT.—No regu24 lated financial institution may receive a rating of

25 ‘outstanding record of meeting community credit

26 needs’ or ‘satisfactory record of meeting community
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1 credit needs’ solely on the basis of loans to or invest2 ments in community development lenders.’’.

3 SEC. 12. REPORTS TO CONGRESS.

4 The Secretary shall submit a report to the Congress

5 not later than July 1 of each year in which the Secretary

6 provides assistance under section 4 to community develop7 ment lenders or eligible entities, which shall describe—

8 (1) the assistance provided under such section,

9 the purposes for which such assistance will be used,

10 the neighborhoods to be served by the community

11 development lenders assisted, and the activities of

12 community development lenders assisted; and

13 (2) any technical assistance provided under sec14 tion 9 by the Secretary.

15 SEC. 13. REGULATIONS.

16 The Secretary of Housing and Urban Development,

17 jointly with the Secretary of the Treasury, shall issue any

18 regulations necessary to carry out this Act.

19 SEC. 14. DEFINITIONS.

20 For purposes of this Act:

21 (1) The term ‘‘assistance agreement’’ means an

22 agreement under section 7 between the Secretary

23 and a community development lender or eligible en24 tity receiving assistance under section 4.
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1 (2) The term ‘‘assistance agreement term’’

2 means the period established by an assistance agree3 ment during which the community development lend4 er that receives assistance under section 4 pursuant

5 to the agreement (or established by the eligible en6 tity that receives such assistance) shall comply with

7 the provision of the agreement.

8 (3) The term ‘‘community development bank’’

9 means a depository institution described in section

10 3(a)(1)(A) that meets the requirements under sub11 sections (b) and (c) of section 3.

12 (4) The term ‘‘community development finan13 cial institution’’ means a financial institution de14 scribed in section 3(a)(1)(B) that meets the require15 ments under subsections (b) and (c) of section 3.

16 (5) The term ‘‘community development lender’’

17 means a community development bank or a commu18 nity development financial institution that meets the

19 requirements under subsections (b) and (c) of sec20 tion 3.

21 (6) The term ‘‘eligible entity’’ means any entity

22 described in section 3(a)(2).

23 (7) The term ‘‘low-income family’’ means any

24 individual or family whose income does not exceed

25 80 percent of the median income for the area, as de-
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1 termined by the Secretary with adjustments for

2 smaller and larger families; except that the Sec3 retary may establish income ceilings higher or lower

4 than 80 percent of the median for the area on the

5 basis of any findings by the Secretary that such

6 variations are necessary because of unusually high

7 or low prevailing incomes.

8 (8) The term ‘‘low-income neighborhood’’

9 means any area within a city, county, town, town10 ship, parish, village, or other general purpose sub11 division of a State—

12 (A) that has a continuous boundary; and

13 (B) in which not less than 20 percent of

14 the residents are members of low-income fami15 lies.

16 (9) The term ‘‘low-income neighborhood served

17 by a community development lender’’ means the low18 income neighborhood identified in an application

19 under section 6 and an assistance agreement under

20 section 7 as the area in which the community devel21 opment lender that receives assistance pursuant to

22 such application and agreement (or established by

23 the eligible entity that receives such assistance) will

24 be located and conduct its principal operations.
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1 (10) The term ‘‘Secretary’’ means the Secretary

2 of Housing and Urban Development.

3 SEC. 15. AUTHORIZATION OF APPROPRIATIONS.

4 There is authorized to be appropriated for each of

5 fiscal years 1994 and 1995—

6 (1) $800,000,000 for assistance under section

7 4; and

8 (2) $200,000,000 for providing technical assist9 ance under section 9.

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