I

103D CONGRESS

1ST SESSION H. R. 1700

To amend the Community Reinvestment Act and the Home Mortgage Disclosure Act of 1975 to improve the availability of credit on a nondiscriminatory basis.

IN THE HOUSE OF REPRESENTATIVES

APRIL 5, 1993

Ms. WATERS (for herself, Mr. RANGEL, Mr. CLAY, Ms. NORTON, and Mrs.

MEEK) introduced the following bill; which was referred to the Committee

on Banking, Finance and Urban Affairs

JANUARY 24, 1994

Additional sponsors: Ms. EDDIE BERNICE JOHNSON of Texas, and Mr.

JEFFERSON

A BILL

To amend the Community Reinvestment Act and the Home

Mortgage Disclosure Act of 1975 to improve the availability of credit on a nondiscriminatory basis.

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 Reinvest5 ment Act Reform Act of 1993’’.
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1 TITLE I—COMMUNITY CREDIT

2 AVAILABILITY IMPROVEMENTS

3 SEC. 101. REPORTING OF ACTUAL PERFORMANCE DATA.

4 (a) IN GENERAL.—The Community Reinvestment

5 Act of 1977 (12 U.S.C. 2901 et seq.) is amended by add6 ing at the end the following new section:

7 ‘‘SEC. 809. REPORTING OF ACTUAL PERFORMANCE DATA.

8 ‘‘(a) ESTABLISHMENT REQUIRED.—The appropriate

9 Federal financial supervisory agencies shall jointly develop

10 a format for collecting data from regulated financial insti11 tutions, in connection with examinations under section

12 804 concerning such institutions’ record of meeting the

13 credit needs of their local communities, including low- and

14 moderate-income neighborhoods.

15 ‘‘(b) DATA REQUIRED.—The data required to be col16 lected under subsection (a) shall include the following:

17 ‘‘(1) HOME MORTGAGE LENDING.—

18 ‘‘(A) The aggregate number and dollar vol19 ume of single family conventional loans, govern20 ment insured or guaranteed loans, loans for

21 multi-family housing, and home improvement

22 loans originated by the institution and the ag23 gregate number of such loans initiated in neigh24 borhoods of different racial and income com25 positions.
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1 ‘‘(B) The rate at which the institution re2 jects applications of various racial and income

3 groups and a comparison of such rate with the

4 rate of other institutions in the financial insti5 tution’s entire community.

6 ‘‘(C) The percentage of applications the fi7 nancial institution receives from minority and

8 low- and moderate-income persons in the insti9 tution’s entire community, expressed as a per10 centage of the institution’s overall applications,

11 and a comparison of such percentage with the

12 percentage of other institutions in the financial

13 institution’s entire community.

14 ‘‘(D) An analysis of the financial institu15 tion’s overall market share in the institution’s

16 entire community for each loan type and the in17 stitution’s market share in neighborhoods of

18 various income and racial compositions.

19 ‘‘(E) The nature and extent of the institu20 tion’s participation in affordable housing pro21 grams that benefit the institution’s entire com22 munity.

23 ‘‘(2) SMALL BUSINESS LENDING.—

24 ‘‘(A) The aggregate number and dollar vol25 ume of loans originated, with a separate break-
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1 out for originations to minority-owned and

2 women-owned businesses and start-up busi3 nesses.

4 ‘‘(B) The aggregate number and dollar vol5 ume of loans originated under programs admin6 istered by the Small Business Administration,

7 with a separate break-out for minority-owned

8 and women-owned businesses.

9 ‘‘(C) The aggregate number and dollar vol10 ume of small business loans originated by the

11 financial institution, compiled on the basis of

12 the racial and income characteristics in the in13 stitution’s entire community.

14 ‘‘(3) COMMUNITY DEVELOPMENT.—

15 ‘‘(A) The number and dollar volume of

16 loans to nonprofit child care, mental health,

17 and literacy centers and to nonprofit developers

18 of affordable housing.

19 ‘‘(B) The financial institution’s participa20 tion in any community development project, in21 cluding a description of any partnerships devel22 oped with nonprofit community organizations,

23 that benefit the low- and moderate-income resi24 dents of the institution’s entire community.
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1 ‘‘(4) CONSUMER LOANS.—A statistical analysis

2 of the number and dollar volume of consumer loans

3 compiled on the basis of the racial and income char4 acteristics of neighborhoods in the institution’s en5 tire community.

6 ‘‘(5) BRANCH CLOSURES.—

7 ‘‘(A) A compilation of the number of the

8 institution’s branches and other deposit facili9 ties in neighborhoods of various racial and in10 come characteristics within the institution’s

11 community.

12 ‘‘(B) An analysis of all openings and clos13 ings of branches and other deposit facilities by

14 the institution in the past 10 years in neighbor15 hoods of various racial and income characteris16 tics within the institution’s community.’’.

17 (b) DATA REQUIRED IN PUBLIC SECTION OF RE18 PORT.—Section 807(b)(1) of the Community Reinvest19 ment Act of 1977 (12 U.S.C. 2906(b)(1)) is amended—

20 (1) by striking ‘‘and’’ at the end of subpara21 graph (B);

22 (2) by striking the period at the end of sub23 paragraph (C) and inserting ‘‘; and’’; and

24 (3) by adding at the end the following new sub25 paragraph:
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1 ‘‘(D) contain the data required to be col2 lected with respect to the institution pursuant

3 to section 809.’’.

4 SEC. 102. ENHANCED OPPORTUNITIES FOR COMMUNITY

5 INPUT.

6 Section 807 of the Community Reinvestment Act of

7 1977 (12 U.S.C. 2906) is amended by adding at the end

8 the following new subsection:

9 ‘‘(d) VIEWS OF CONSUMERS.—

10 ‘‘(1) IN GENERAL.—The appropriate Federal fi11 nancial supervisory agency shall actively solicit com12 ments, in writing and in person, for no fewer than

13 45 days prior to the issuance of a rating under sub14 section (b).

15 ‘‘(2) SPECIAL EMPHASIS.—In soliciting com16 ments under paragraph (1), the appropriate Federal

17 financial supervisory agency shall emphasize con18 tacts with low- and moderate-income and minority

19 residents of affected communities within the institu20 tion’s entire community, community groups rep21 resenting such residents, small businesses, and non22 profit organizations providing services in low- and

23 moderate-income communities.

24 ‘‘(3) INTERVIEWS WITH APPLICANTS FOR CRED25 IT.—Any examiner conducting an examination under
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1 section 804 may interview any applicant for credit to

2 the regulated financial institution in order to deter3 mine whether there is evidence of any practice which

4 might tend to discourage an applicant from pursuing

5 an application for credit, including the discourage6 ment of an application on a prohibited basis.

7 ‘‘(4) EXTENSION OF COMMENT PERIOD.—If a

8 substantial number of requests are received by an

9 appropriate Federal financial supervisory agency for

10 public comment under paragraph (1), the agency

11 shall—

12 ‘‘(A) extend the comment period no fewer

13 than 75 days; and

14 ‘‘(B) hold a public hearing.’’.

15 SEC. 103. COLLECTION OF DATA ON SMALL BUSINESS AND

16 CONSUMER LOANS.

17 Section 304(a)(1) of the Home Mortgage Disclosure

18 Act of 1975 (12 U.S.C. 2803(a)(1)) is amended by insert19 ing ‘‘, the number and total dollar amount of loans to

20 small business, by census tracts, and the number and total

21 dollar amount of personal loans to consumers, by census

22 tracts’’ before the period at the end.
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1 SEC. 104. RATING SYSTEM UNDER CRA.

2 (a) 5 POINT RATING SYSTEM.—Section 807(b)(2) of

3 the Community Reinvestment Act of 1977 (12 U.S.C.

4 2906(b)(2)) is amended—

5 (1) by redesignating subparagraphs (C) and

6 (D) as subparagraphs (D) and (E), respectively, and

7 by inserting after subparagraph (B) the following

8 new subparagraph:

9 ‘‘(C) ‘Qualified record of meeting commu10 nity credit needs which needs to improve’.’’; and

11 (2) in subparagraph (D) (as so redesignated by

12 paragraph (1) of this subsection), is amended by

13 striking ‘‘Needs’’ and inserting ‘‘Substantial and im14 mediate need’’.

15 (b) RATING INTEGRITY.—Section 807(b) of the Com16 munity Reinvestment Act of 1977 (12 U.S.C. 2906(b)) is

17 amended by adding at the end the following new

18 paragraph:

19 ‘‘(3) RATING INTEGRITY.—No financial institu20 tion may receive a rating described in subparagraph

21 (A) or (B) of paragraph (2) unless such institution

22 has actually extended significant amounts of credit

23 in low-income neighborhoods and has not merely

24 been in compliance with a plan for extending such

25 credit in the future.’’.
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1 (c) PROMPT CORRECTIVE ACTION.—The Community

2 Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is

3 amended by adding after section 809 (as added by section

4 101 of this Act) the following new section:

5 ‘‘SEC. 810. PROMPT CORRECTIVE ACTION.

6 ‘‘(a) ACTION REQUIRED.—

7 ‘‘(1) QUALIFIED RECORD OF MEETING COMMU8 NITY CREDIT NEEDS WHICH NEEDS TO IMPROVE.—

9 ‘‘(A) SUBMISSION OF PLAN.—Any regu10 lated financial institution which receives a rat11 ing of ‘qualified record of meeting community

12 credit needs which needs to improve’ shall sub13 mit, to the appropriate Federal financial super14 visory agency, a plan for improving the institu15 tion’s performance with respect to meeting the

16 credit needs of the institution’s entire commu17 nity, including low- and moderate-income neigh18 borhoods, by the end of the 6-month period be19 ginning on the date the institution receives such

20 rating under this Act.

21 ‘‘(B) REDUCTION OF RATING FOR FAILURE

22 TO COMPLY.—If a regulated financial institu23 tion described in subparagraph (A) fails to sub24 mit a plan under such subparagraph which is

25 acceptable to the appropriate Federal super-
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1 visory agency before the end of the lll2 month period beginning on the date the rating

3 referred to in such subparagraph is received by

4 the institution, the institution’s rating under

5 section 807(a)(2) as of the end of such period

6 shall be deemed to be ‘substantial and imme7 diate need to improve record of meeting com8 munity credit needs’ for purposes of this Act,

9 including paragraph (2).

10 ‘‘(2) SUBSTANTIAL AND IMMEDIATE NEED TO

11 IMPROVE RECORD OF MEETING COMMUNITY CREDIT

12 NEEDS.—

13 ‘‘(A) SUBMISSION OF PLAN.—Any regu14 lated financial institution which receives a rat15 ing of ‘substantial and immediate need to im16 prove record of meeting community credit

17 needs’ shall submit, to the appropriate Federal

18 financial supervisory agency before the end of

19 the 30-day period beginning on the date the in20 stitution receives such rating under this Act, a

21 plan for substantially improving the institu22 tion’s performance with respect to meeting the

23 credit needs of the institution’s entire commu24 nity, including low- and moderate-income neigh-
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1 borhoods, by the end of the 6-month period be2 ginning on such date.

3 ‘‘(B) PUBLIC HEARING.—

4 ‘‘(i) IN GENERAL.—The appropriate

5 Federal financial supervisory agency shall

6 hold a public hearing on the adequacy of

7 any plan submitted pursuant to subpara8 graph (A) before the end of the 30-day pe9 riod beginning on the date the plan is sub10 mitted to the agency.

11 ‘‘(ii) NOTICE OF HEARING.—The ap12 propriate Federal financial supervisory

13 agency shall provide adequate notice in the

14 regulated financial institution’s entire com15 munity, including low- and moderate-in16 come neighborhoods, of any hearing con17 ducted under clause (i).

18 ‘‘(C) REDUCTION OF RATING FOR FAILURE

19 TO COMPLY.—If a regulated financial institu20 tion described in subparagraph (A) fails to sub21 mit a plan under such subparagraph which is

22 acceptable to the appropriate Federal super23 visory agency before the end of the lll24 month period beginning on the date the rating

25 referred to in such subparagraph is received by
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1 the institution, the institution’s rating under

2 section 807(a)(2) as of the end of such period

3 shall be deemed to be ‘substantial noncompli4 ance in meeting community credit needs’ for

5 purposes of this Act, including paragraph (3).

6 ‘‘(3) SUBSTANTIAL NONCOMPLIANCE IN MEET7 ING COMMUNITY CREDIT NEEDS.—

8 ‘‘(A) PROMPT CORRECTIVE ACTION RE9 QUIRED.—If a regulated financial institution re10 ceives a rating of ‘substantial noncompliance in

11 meeting community credit needs’, the appro12 priate Federal supervisory agency shall—

13 ‘‘(i) treat such rating as a violation of

14 the requirements of this Act; and

15 ‘‘(ii) promptly take such corrective ac16 tion as may be necessary to ensure that

17 such institution meets the credit needs of

18 the institution’s entire community, includ19 ing low- and moderate-income neighbor20 hoods, as soon as practicable.

21 ‘‘(B) MONTHLY LOAN ACTIVITY REPORTS

22 REQUIRED.—Any regulated financial institution

23 which receives a rating of ‘substantial non24 compliance in meeting community credit needs’

25 shall submit a monthly report to the appro-
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1 priate Federal supervisory agency on the ac2 tions the institution has taken during the pe3 riod covered by the report to meet the credit

4 needs of the low- and moderate-income neigh5 borhoods in the institution’s community.

6 ‘‘(C) ADDITIONAL SUPERVISION.—The ap7 propriate Federal supervisory agency shall pro8 vide such additional supervision of an institu9 tion described in subparagraph (A) as may be

10 necessary, including conducting special exami11 nations, to ensure that such institution is—

12 ‘‘(i) in compliance with all plans ap13 proved by the agency for substantially im14 proving the institution’s performance with

15 respect to meeting the credit needs of the

16 institution’s entire community, including

17 low- and moderate-income neighborhoods;

18 and

19 ‘‘(ii) making all possible progress to20 wards meeting such credit needs.

21 ‘‘(b) ADMINISTRATIVE ENFORCEMENT.—

22 ‘‘(1) IN GENERAL.—Compliance with the re23 quirements imposed under this Act shall be enforced

24 under section 8 of the Federal Deposit Insurance
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1 Act by the appropriate Federal financial supervisory

2 agency.

3 ‘‘(2) ADDITIONAL ENFORCEMENT POWERS.—

4 ‘‘(A) VIOLATION OF THIS ACT TREATED AS

5 VIOLATION OF OTHER ACT.—For purposes of

6 the exercise by any appropriate Federal finan7 cial supervisory agency of the agency’s powers

8 under the Federal Deposit Insurance Act, a vio9 lation of a requirement imposed under this Act

10 shall be deemed to be a violation of a require11 ment imposed under that Act.

12 ‘‘(B) ENFORCEMENT AUTHORITY UNDER

13 OTHER ACTS.—In addition to the powers of any

14 appropriate Federal financial supervisory under

15 the Federal Deposit Insurance Act, each such

16 agency may exercise, for purposes of enforcing

17 compliance with any requirement imposed

18 under this Act, any other authority conferred

19 on such agency by law.’’.

20 TITLE II—COMMUNITY SUPPORT

21 REQUIREMENTS

22 SEC. 201. COMMUNITY SUPPORT OBLIGATIONS OF MORT23 GAGE BANKS.

24 (a) IN GENERAL.—Each mortgage bank shall have

25 an ongoing responsibility to meet the credit needs of all
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1 the communities in which such bank makes a significant

2 number of extensions of credit or extends a significant

3 amount of credit, including extensions of credit in low- and

4 moderate-income neighborhoods of such communities.

5 (b) DEFINITIONS.—For purposes of this title—

6 (1) MORTGAGE BANK.—The term ‘‘mortgage

7 bank’’ means any lender who does not accept depos8 its and originates housing related loans.

9 (2) OFFICE.—The term ‘‘Office’’ means the Of10 fice of Mortgage Bank and Insurance Supervision

11 established by the Secretary of Housing and Urban

12 Development pursuant to section 202.

13 (3) SECRETARY.—The term ‘‘Secretary’’ means

14 the Secretary of Housing and Urban Development.

15 SEC. 202. ESTABLISHMENT OF OFFICE OF MORTGAGE BANK

16 AND INSURANCE SUPERVISION.

17 The Secretary of Housing and Urban Development

18 shall establish within the Department of Housing and

19 Urban Development an office to be known as the Office

20 of Mortgage Bank and Insurance Supervision to evaluate

21 the community support performance of mortgage banks

22 and mortgage insurance companies.
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1 SEC. 203. MORTGAGE BANK COMMUNITY SUPPORT STATE2 MENTS.

3 (a) IN GENERAL.—The Office shall, on a biennial

4 basis, require each mortgage bank to submit to the Office

5 a community support statement, detailing the efforts of

6 such bank at meeting the housing credit needs of each

7 community in which the bank makes a significant number

8 of extensions of credit or extends a significant amount of

9 credit, including extensions of credit in low- and moderate10 income neighborhoods of such communities.

11 (b) CONTENTS.—The statement submitted by each

12 mortgage bank under subsection (a) shall include—

13 (1) the data required to be maintained and dis14 closed by the lender under the Home Mortgage Dis15 closure Act of 1975 for the previous 2 years, in a

16 format which the Office shall establish;

17 (2) underwriting criteria employed by the bank

18 for all of the bank’s housing loan products;

19 (3) descriptions of any activity the bank has

20 undertaken over the period under review to ascertain

21 and meet identified credit needs in low- and mod22 erate-income neighborhoods within communities in

23 which the bank makes a significant number of exten24 sions of credit or extends a significant amount of

25 credit, including any partnerships formed with com26 munity-based organizations, nonprofit developers of
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1 affordable housing, or agencies of State or local gov2 ernment;

3 (4) details of any findings of technical or sub4 stantive violations of the Equal Credit Opportunity

5 Act or the Fair Housing Act, and any settlements

6 or judgments arising from any such findings; and

7 (5) any other information the Office may re8 quire.

9 SEC. 204. MORTGAGE BANK COMMUNITY SUPPORT EVAL10 UATION.

11 The Office shall determine whether a mortgage bank

12 is maintaining an adequate community support perform13 ance, based on—

14 (1) community support performance statements

15 received from mortgage banks;

16 (2) an analysis of the data required to be main17 tained and disclosed by the lender under the Home

18 Mortgage Disclosure Act of 1975 for the previous 2

19 years with respect to metropolitan statistical areas

20 in which the bank originates a significant number of

21 home loans, which shall emphasize—

22 (A) the institution’s market share in neigh23 borhoods of different racial and income charac24 teristics;
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1 (B) the number of applications received

2 from minorities and low- and moderate-income

3 persons; and

4 (C) the rate at which the institutions re5 jects applications from minority and white ap6 plicants;

7 (3) any evidence of illegal discriminatory credit

8 practices, including prescreening, or offering less fa9 vorable loan products to applicants of different ra10 cial backgrounds; and

11 (4) public comment, which shall be received by

12 the agency for not less than 90 days after the Office

13 actively solicits comment solicitations of comment

14 through notice in the Federal Register and regular

15 communications with community based organiza16 tions.

17 SEC. 205. PENALTIES FOR FINDING OF INADEQUATE COM18 MUNITY SUPPORT PERFORMANCE BY MORT19 GAGE BANKS.

20 (a) REMEDIAL ACTION.—If the Secretary finds that

21 a mortgage bank is maintaining an inadequate level of

22 community support, the Secretary may issue an order—

23 (1) requiring the bank to file a community sup24 port action plan with the Office not more than 90

25 days after the finding, which shall include concrete
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1 goals and timetables for correcting identified defi2 ciencies; and

3 (2) prohibiting the bank from using any pro4 gram or product administered by the Secretary until

5 all identified deficiencies are met.

6 (b) CEASE AND DESIST ORDERS.—

7 (1) ISSUANCE OF ORDER.—

8 (A) IN GENERAL.—If the Secretary deter9 mines that there is reasonable cause to believe

10 that a mortgage bank is violating, has violated,

11 or is about to violate an order under subsection

12 (a) or a community support action plan filed

13 pursuant to such an order, the Secretary may

14 issue an order requiring the mortgage bank

15 to—

16 (i) cease and desist from any such vio17 lation; and

18 (ii) take such affirmative action to

19 prevent the occurrence or the continuance

20 of such violation as the Secretary deter21 mines to be appropriate.

22 (B) NOTICE OF CHARGES.—An order is23 sued under this paragraph shall include a notice

24 of the charges on which the order is based and
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1 a statement of the facts constituting the alleged

2 violation.

3 (C) EFFECTIVE PERIOD.—An order issued

4 under this paragraph shall—

5 (i) become effective upon service to

6 the mortgagee; and

7 (ii) remain effective and enforceable

8 pursuant to the terms of the order unless

9 modified or rescinded by the Secretary or

10 pursuant to an order of a court under

11 paragraph (3) or in connection with the

12 court’s review of any administrative pro13 ceedings with respect to the order issued

14 under this subsection.

15 (2) HEARING.—Any mortgage bank which re16 ceives an order under paragraph (1) shall be af17 forded an opportunity for a hearing on the record by

18 the Secretary as soon as practicable but not later

19 than 20 days after the order has been served.

20 (3) JUDICIAL HEARING.—Within 10 days after

21 a mortgage bank has been served with a cease-and22 desist order under this subsection, the bank may

23 apply to the United States district court for the ju24 dicial district in which the home office of the bank

25 is located, or the United States District Court for
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1 the District of Columbia, for an injunction setting

2 aside, limiting, or suspending the enforcement, oper3 ation, or effectiveness of such order pending the

4 completion of the administrative proceedings pursu5 ant to the notice of charges served upon the bank,

6 and such court shall have jurisdiction to issue such

7 injunction.

8 (4) JUDICIAL ENFORCEMENT.—The Secretary

9 may apply to the United States district court, or the

10 United States court of any territory, within the ju11 risdiction of which the home office of the mortgagee

12 is located, for an injunction to enforce any effective

13 and outstanding order issued under this subsection

14 and, if the court determines that there has been a

15 violation or threatened violation of such order, the

16 court shall issue such injunction.

17 (c) CIVIL MONEY PENALTY.—

18 (1) IMPOSITION OF PENALTY.—

19 (A) IN GENERAL.—The Secretary may im20 pose a civil money penalty on any mortgage

21 bank, and any director, officer or employee of

22 a mortgage bank, who violates any order issued

23 under subsection (a) or (b).
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1 (B) AMOUNT OF PENALTY.—The amount

2 of the penalty, as determined by the Secretary,

3 may not exceed—

4 (i) in the case of a violation of an

5 order issued under subsection (a), $10,000

6 for each month during which such violation

7 occurs; and

8 (ii) in the case of a violation of an

9 order issued under subsection (b), $10,000

10 for each day during which such violation

11 continues.

12 (C) NOTIFICATION TO ATTORNEY GEN13 ERAL.—Before taking action to impose a civil

14 money penalty for a violation under subpara15 graph (A), the Secretary shall inform the Attor16 ney General of the United States.

17 (2) ASSESSMENT.—

18 (A) WRITTEN NOTICE.—Any penalty im19 posed under paragraph (1) may be assessed and

20 collected by the Secretary by written notice.

21 (B) FINALITY OF ASSESSMENT.—If, with

22 respect to any assessment under subparagraph

23 (A), a hearing is not requested pursuant to

24 paragraph (5) within the period of time allowed
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1 under such paragraph, the assessment shall

2 constitute a final and unappealable order.

3 (3) AUTHORITY TO MODIFY OR REMIT PEN4 ALTY.—The Secretary may compromise, modify, or

5 remit any penalty which the Secretary may assess or

6 already has assessed under paragraph (1).

7 (4) MITIGATING FACTORS.—In determining the

8 amount of a penalty under paragraph (1) with re9 spect to any person, the Secretary shall take into ac10 count the appropriateness of the penalty with re11 spect to—

12 (A) the gravity of the offense;

13 (B) any history of previous violations by

14 the person;

15 (C) the ability of the person to pay the

16 penalty;

17 (D) injury to the public;

18 (E) benefits received by the person as a re19 sult of the violation;

20 (F) the deterrent effect of the penalty on

21 future violations by such person and other per22 sons; and

23 (G) such other factors as the Secretary

24 may determine in regulations to be appropriate.
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1 (5) HEARING.—The person against whom a

2 civil money penalty is assessed under paragraph (1)

3 shall be afforded an opportunity for a hearing on the

4 record, if such person submits a request for such

5 hearing within 20 days after the issuance of the no6 tice of the assessment.

7 (6) COLLECTION.—

8 (A) REFERRAL.—If any person fails to pay

9 an assessment after any penalty assessed under

10 this subsection has become final, the Secretary

11 shall notify the Attorney General who shall re12 cover the amount assessed in the appropriate

13 United States district court.

14 (B) APPROPRIATENESS OF PENALTY NOT

15 REVIEWABLE.—In any civil action under sub16 paragraph (A), the validity and appropriateness

17 of the penalty shall not be subject to review.

18 (7) DISBURSEMENT.—All penalties collected

19 pursuant to this subsection shall be deposited into

20 the Treasury of the United States.

21 (8) AGENCY PROCEDURES—The Secretary

22 shall, by regulation, establish standards and proce23 dures for carrying out this subsection.
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1 SEC. 206. COMMUNITY SUPPORT REQUIREMENTS FOR

2 MORTGAGE INSURANCE COMPANIES.

3 (a) IN GENERAL.—Each mortgage insurance com4 pany shall—

5 (1) report to the Office the number and total

6 dollar amount of each mortgage insurance policy

7 written by the company, by census tract, the race,

8 gender, and income of applicants for mortgage in9 surance, and the disposition of each application for

10 mortgage insurance;

11 (2) demonstrate to the Secretary adequate sup12 port for community credit needs; and

13 (3) make public to any person the underwriting

14 criteria for any mortgage insurance the company of15 fers.

16 (b) 2-YEAR REPORTING REQUIREMENT.—At least

17 once during each 2-year period beginning after the date

18 of enactment of this Act, each mortgage insurance com19 pany shall submit a report to the Office containing the

20 following information:

21 (1) ADEQUACY OF AVAILABILITY OF MORTGAGE

22 INSURANCE.—The extent to which adequate mort23 gage insurance is available in low- and moderate-in24 come and minority neighborhoods within areas in

25 which the company writes a significant number of

26 mortgage insurance policies.
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1 (2) UNDERWRITING GUIDELINES.—The extent

2 to which underwriting guidelines used by the com3 pany do not unreasonably restrict access to low- and

4 moderate-income families within areas in which the

5 company writes a significant number of mortgage in6 surance policies.

7 (c) DUTIES OF THE OFFICE.—The Office shall con8 duct biennial community support reviews of mortgage in9 surance companies including analysis of the following:

10 (1) The data collected by the Agency on the

11 distribution of the mortgage insurance company’s

12 policies by census tract and data on the disparate

13 treatment of applicants for mortgage insurance

14 based on the applicants’ race, gender, and income.

15 (2) The underwriting criteria employed by the

16 company and the extent to which such criteria do

17 not unreasonably restrict access to credit for low18 and moderate-income and minority persons or neigh19 borhoods.

20 (3) Community support statements received

21 from the mortgage insurance company.

22 (4) Any other information the Secretary may

23 require mortgage insurance companies to submit.

24 (5) Any comments received from the public on

25 the community support performance of the mortgage
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1 insurance company during the period covered by the

2 review under this paragraph.

3 (d) DUTIES OF THE SECRETARY.—The Secretary

4 shall—

5 (1) solicit and accept public comment for no

6 fewer than 90 days before issuing a finding in con7 nection with the review of a mortgage insurance

8 company under subsection (c)(2); and

9 (2) review the community support performance

10 of each mortgage insurance company and determine

11 whether the company is providing an adequate level

12 of community support in the areas in which such

13 company writes a significant number of mortgage in14 surance policies.

15 (e) PERFORMANCE STATEMENT.—If, after reviewing

16 any evidence, the Secretary concludes that a mortgage in17 surance company is not meeting the requirements of this

18 section, the Secretary may require such company to sub19 mit a statement indicating how the company expects to

20 improve its record of providing community support.
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1 TITLE III—PATTERN OR

2 PRACTICE

3 SEC. 301. PATTERN OR PRACTICE TAKEN INTO ACCOUNT IN

4 CONNECTION WITH DEPOSIT FACILITY AP5 PLICATIONS.

6 Section 804 of the Community Investment Act of

7 1977 (12 U.S.C. 2903) is amended—

8 (1) by striking ‘‘In connection with’’ and insert9 ing ‘‘(a) IN GENERAL.—In connection with’’; and

10 (2) by adding at the end the following new sub11 section:

12 ‘‘(b) PATTERN OR PRACTICE.—In considering an ap13 plication for a deposit facility by a regulated financial in14 stitution, the appropriate Federal financial supervisory

15 agency shall—

16 ‘‘(1) consider whether the institution has, dur17 ing the 10 years prior to the filing of the applica18 tion, exhibited a pattern or practice of opening or

19 closing branches in a way that tends to exclude low20 or moderate-income or minority neighborhoods; and

21 ‘‘(2) accept public comment for no fewer than

22 90 days before making any determination as to

23 whether the affected institution has provided afford24 able and accessible deposit and branch banking serv-
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1 ices to low- and moderate-income and minority con2 sumers within the institution’s entire community.

3 ‘‘(c) DENIAL OF APPLICATION.—If the appropriate

4 Federal financial supervisory agency determines, under

5 subsection (b)(1), that a regulated financial institution

6 has exhibited a pattern or practice of opening or closing

7 branches in a way that tends to exclude low- and mod8 erate-income or minority communities, the agency shall

9 deny the pending application, notwithstanding the institu10 tion’s compliance with any other applicable provision of

11 law.’’.

12 SEC. 302. PATTERN OR PRACTICE TAKEN INTO ACCOUNT IN

13 CONNECTION WITH CERTAIN BANK HOLDING

14 COMPANY APPLICATIONS.

15 The Bank Holding Company Act of 1956 (12 U.S.C.

16 1841, et seq.) is amended—

17 (1) by redesignating sections 11 and 12 as sec18 tions 12 and 13, respectively; and

19 (2) by inserting after section 10 the following

20 new section:

21 ‘‘SEC. 11. PATTERN OR PRACTICE OF CLOSING DEPOSIT FA22 CILITIES.

23 ‘‘(a) IN GENERAL.—In considering an application

24 which is subject to this section, the Board shall—
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1 ‘‘(1) consider whether the applicant or any

2 bank or savings association affiliate of the applicant,

3 during the 10 years prior to the filing of the applica4 tion, exhibited a pattern or practice of opening or

5 closing branches in a way that tends to exclude low6 or moderate-income or minority neighborhoods; and

7 ‘‘(2) accept public comment for no fewer than

8 90 days before making any determination as to

9 whether the applicant and any bank or savings asso10 ciation affiliate of the applicant has provided afford11 able and accessible deposit and branch banking serv12 ices to low- and moderate-income and minority con13 sumers within the applicant’s or the affiliate’s entire

14 community.

15 ‘‘(b) APPLICATIONS SUBJECT TO THIS SECTION.—

16 The following applications shall be subject to this section:

17 ‘‘(1) Any application under section 3(a) by—

18 ‘‘(A) any bank holding company to acquire

19 control of another bank or bank holding com20 pany; or

21 ‘‘(B) any bank to acquire control of an22 other bank or any bank holding company.

23 ‘‘(2) Any application by a bank holding com24 pany to engage in, or any notice by a bank holding

25 company of such company’s intention to engage in,
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1 (as the case may be) any activity (or to acquire the

2 shares of any company engaged in any activity) de3 scribed in any paragraph of section 4(c).

4 ‘‘(c) DENIAL OF APPLICATION.—The Board may not

5 approve an application which is subject to this section

6 (and, in the case of a notice of an acquisition or activity,

7 for which the Board’s approval is not required, the Board

8 shall disapprove the acquisition or activity) if the Board

9 determines that the applicant or any bank or savings asso10 ciation affiliate of the applicant has exhibited a pattern

11 or practice of opening or closing branches in a way that

12 tends to exclude low- and moderate-income or minority

13 communities.’’.

14 SEC. 303. PATTERN OR PRACTICE TAKEN INTO ACCOUNT IN

15 CONNECTION WITH CERTAIN SAVINGS AND

16 LOAN HOLDING COMPANY APPLICATIONS.

17 Section 10 of the Home Owners’ Loan Act (12 U.S.C.

18 1467a) is amended by adding at the end the following new

19 subsection:

20 ‘‘(t) PATTERN OR PRACTICE OF CLOSING DEPOSIT

21 FACILITIES.

22 ‘‘(1) IN GENERAL.—In considering an applica23 tion which is subject to this subsection, the Director

24 shall—
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•HR 1700 SC

1 ‘‘(A) consider whether the applicant or any

2 bank or savings association affiliate of the ap3 plicant, during the 10 years prior to the filing

4 of the application, exhibited a pattern or prac5 tice of opening or closing branches in a way

6 that tends to exclude low- or moderate-income

7 or minority neighborhoods; and

8 ‘‘(B) accept public comment for no fewer

9 than 90 days before making any determination

10 as to whether the applicant and any bank or

11 savings association affiliate of the applicant has

12 provided affordable and accessible deposit and

13 branch banking services to low- and moderate14 income and minority consumers within the ap15 plicant’s or the affiliate’s entire community.

16 ‘‘(2) APPLICATIONS SUBJECT TO THIS SEC17 TION.—The following applications shall be subject to

18 this subsection:

19 ‘‘(A) Any application under subsection (e)

20 by—

21 ‘‘(i) any savings and loan holding

22 company to acquire control of another sav23 ings association or savings and loan hold24 ing company; or
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•HR 1700 SC

1 ‘‘(ii) any savings association to ac2 quire control of another savings association

3 or any savings and loan holding company.

4 ‘‘(B) Any application by a savings and loan

5 holding company to engage in any activity (or

6 to acquire the shares of any company engaged

7 in any activity) for which the Director’s ap8 proval is required under subsection (c)(4)(A).

9 ‘‘(3) DENIAL OF APPLICATION.—The Director

10 may not approve an application which is subject to

11 this subsection (and, in the case of a notice of an

12 acquisition or activity for which the Director’s ap13 proval is not required, the Director shall disapprove

14 the acquisition or activity) if the Director determines

15 that the applicant or any bank or savings association

16 affiliate of the applicant has exhibited a pattern or

17 practice of opening or closing branches in a way that

18 tends to exclude low- and moderate-income or minor19 ity communities.’’.

20 SEC. 304. PATTERN OR PRACTICE TAKEN INTO ACCOUNT IN

21 CONNECTION WITH CERTAIN APPLICATIONS

22 FOR MERGERS AND ACQUISITIONS OF DE23 POSITORY INSTITUTIONS.

24 Section 18(c) of the Federal Deposit Insurance Act

25 (12 U.S.C. 1828(c)) is amended—
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•HR 1700 SC

1 (1) by redesignating paragraphs (9), (10), and

2 (11) as paragraphs (10), (11), and (12), respec3 tively; and

4 (2) by inserting after paragraph (8) the follow5 ing new paragraph:

6 ‘‘(9) PATTERN OR PRACTICE OF CLOSING DE7 POSIT FACILITIES.

8 ‘‘(A) IN GENERAL.—In considering an ap9 plication under paragraph (1) or (2), the re10 sponsible agency shall—

11 ‘‘(i) consider whether the applicant

12 during the 10 years prior to the filing of

13 the application, exhibited a pattern or

14 practice of opening or closing branches in

15 a way that tends to exclude low- or mod16 erate-income or minority neighborhoods;

17 and

18 ‘‘(ii) accept public comment for no

19 fewer than 90 days before making any de20 termination as to whether the applicant

21 has provided affordable and accessible de22 posit and branch banking services to low23 and moderate-income and minority con24 sumers within the applicant’s entire com25 munity.
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•HR 1700 SC

1 ‘‘(B) DENIAL OF APPLICATION.—The re2 sponsible agency may not approve an applica3 tion under paragraph (1) or (2) if the agency

4 determines that the applicant depository insti5 tution has exhibited a pattern or practice of

6 opening or closing branches in a way that tends

7 to exclude low- and moderate-income or minor8 ity communities.’’.

Æ

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