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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 238 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 238

 To promote community development lending by financial institutions in 
                     economically distressed areas.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

  Mr. Leach introduced the following bill; which was referred to the 
                    Committee on Banking and Finance

_______________________________________________________________________

                                 A BILL

 
 To promote community development lending by financial institutions in 
                     economically distressed areas.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act shall be cited as the ``Community Development Banking Act 
of 1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that:
            (1) Many small and medium size businesses, low- to 
        moderate-income individuals and economically distressed areas 
        lack adequate access to credit and private capital.
            (2) Community development is most productive when 
        neighborhood residents and merchants, nonprofit organizations, 
        local government officials, and private lenders cooperate to 
        create a more positive physical, financial and market 
        environment which encourages and supports private investment 
        and reinvestment.
            (3) The best way to address problems of depressed economies 
        in inner cities, rural areas, and other underserved communities 
        is by empowering local residents through technical assistance 
        and market incentives for pooling local resources.
            (4) There is a need to provide existing regulated financial 
        institutions with incentives to provide these groups with 
        adequate access to credit and private capital without 
        compromising safety and soundness.
            (5) There is a need to encourage other private sector 
        institutions, such as community development banks, community 
        development corporations, community development credit unions 
        and small business investment corporations to provide these 
        groups with adequate access to credit and private capital 
        without the creation of an additional Federal bureaucracy and 
        without exposing taxpayers to unnecessary risk.
            (6) There is a need for the Administration to complete 
        implementing guidelines for existing initiatives, such as the 
        Bank Enterprise Act, designed to provide these groups with 
        adequate access to credit and private capital.
    (b) Purpose.--The purpose of this Act is to provide small and 
medium size businesses, low- and moderate-income individuals and 
economically distressed areas with adequate access to credit and 
private capital by providing incentives to regulated financial 
institutions and other private sector institutions.

             TITLE I--BANK COMMUNITY DEVELOPMENT INCENTIVES

SEC. 101. CRA CREDIT FOR COMMUNITY INVESTMENTS.

    (a) CRA Credit for Community Lending Activities.--The Community 
Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is amended by 
inserting at the end the following new section:

``SEC. 809. STANDARDS FOR CRA CREDIT.

    ``(a) In General.--Not later than 1 year after the date of 
enactment of this section, the Federal Financial Institutions 
Examination Council, in consultation with the Community Enterprise 
Assessment Credit Board, individuals representing regulated financial 
institutions, consumers, community groups, and other interested 
parties, shall establish standards to assess the record of a regulated 
financial institution in meeting its community credit needs and for 
purposes of written evaluations prepared under section 807. Such 
standards shall evaluate a regulated financial institution's record of 
meeting the credit needs of its entire community and expressly grant 
credit for purposes of written evaluations under section 807 of this 
Act based on, but not limited to, the following--
            ``(1) the actual volume of lending by the institution to 
        its delineated community;
            ``(2) the percentage of earning assets, new loan production 
        or capital that the institution has invested in its delineated 
        community;
            ``(3) investments by the institution designed primarily to 
        promote the public welfare, including the welfare of low- and 
        moderate-income communities or families (such as by providing 
        housing services or jobs in the institution's community);
            ``(4) investments in any community development 
        organization, community development bank, community development 
        corporation, community development credit union, minority 
        depository institution, women's depository institution, small 
        business investment corporation operating in the regulated 
        financial institution's delineated community or any qualifying 
        activity pursuant to section 233(a) of the Bank Enterprise Act 
        of 1991;
            ``(5) achieving the assessment factors identified in the 
        regulations prescribed by the Federal financial supervisory 
        agencies to implement this Act;
            ``(6) additional factors that demonstrate an institution's 
        commitment to meeting the credit needs of its entire community.
    ``(b) Regulations to Include Standards.--Each appropriate Federal 
financial supervisory agency shall include the standards established 
under subsection (a) in its regulations required by section 806.
    ``(c) Assigned Ratings.--
            ``(1) Rating standards.--The Federal financial supervisory 
        agencies shall base the assigned ratings required under section 
        807(b)(2) of this Act on the standards established pursuant to 
        subsection (a).
            ``(2) Agency discretion.--In connection with the use of the 
        standards established under subsection (a) and for purposes of 
        the assigned ratings required under section 807(b)(2), the 
        appropriate Federal financial supervisory agency shall consider 
        and give appropriate weight and consideration for a regulated 
        financial institution's asset size and service area, access to 
        Federal programs, local economic conditions, legal impediments 
        and any additional factors that reasonably bear upon such 
        institution's ability to meet its community credit needs.''
    (b) Conforming Amendment.--Section 808(a) of the Community 
Reinvestment Act of 1977 (12 U.S.C. 2907(a)) (as amended by section 909 
of the Housing and Community Development Act of 1992) is amended by 
striking ``may be a factor'' and inserting ``shall be considered and 
given credit''.

SEC. 102. CRA COMPLIANCE.

    (a) In General.--Section 804 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2903) is amended--
            (1) by striking ``In connection with'' and inserting ``(a) 
        In General.--Subject to subsection (b), in connection with'';
            (2) by adding at the end the following:
    ``(b) CRA Compliance.--Notwithstanding subsection (a)(2), an 
application for a deposit facility by a regulated financial institution 
shall not be denied on the basis of such institution's compliance with 
this Act if such institution has received a rating in its last 
evaluation under section 804 of `outstanding' in its record of meeting 
its community needs based on the standards established under section 
809(b).
    ``(c) Community Development Investment Activities.--
            ``(1) Regulated financial institutions.--Any well 
        capitalized (as defined in section 38 of the Federal Deposit 
        Insurance Act and the regulations promulgated thereto), 
        regulated financial institution that fully invests the maximum 
        amount permissible by the appropriate Federal banking agency or 
        State supervisor for an institution which meets the definition 
        of `well capitalized', as authorized by law, regulation or 
        order, in a qualifying investment shall be deemed to have met 
        all requirements under this Act, including for purposes of any 
        application for a deposit facility by such regulated financial 
        institution.
            ``(2) Depository institution holding companies.--Any 
        depository institution holding company that owns or controls 80 
        percent of its assets in regulated financial institutions that 
        are well capitalized, and
                    ``(A) has fully invested the maximum amount 
                permissible by the appropriate Federal banking agency 
                as authorized by law, regulation or order, in a 
                qualifying investment; or
                    ``(B) owns or controls 80 percent of its assets in 
                regulated financial institutions that have fully 
                invested the maximum amount permissible by the 
                appropriate Federal banking agency or State supervisor 
                for an institution which meets the definition of `well 
                capitalized', as authorized by law, regulation or 
                order, in a qualifying investment;
        shall be deemed to have met all requirements under this Act, 
        including for purposes of any application for a deposit 
        facility by such depository institution holding company.
            ``(3) Qualifying investments.--
                    ``(A) For purposes of this subsection, the term 
                `qualifying investment' means any investment by a 
                regulated financial institution or a depository 
                institution holding company in a community development 
                bank, community development corporation, community 
                development credit union, or small business investment 
                corporation operating in the regulated financial 
                institution's delineated community, subject to 
                subparagraphs (B) and (C).
                    ``(B) No investment will be considered a 
                `qualifying investment' under this paragraph if the 
                appropriate Federal financial supervisory agency 
                determines that such an investment is not consistent 
                with safe and sound banking practices.
                    ``(C) Any `qualifying investment' under this 
                paragraph shall be designed to satisfy the affiliated 
                regulated financial institution's continuing and 
                affirmative obligation to help meet the credit needs of 
                the local community where it is chartered.''.
    (b) Conforming Amendment.--Section 803 of the Community 
Reinvestment Act is amended by inserting at the end the following:
            ``(5) The term `depository institution holding company' has 
        the same meaning given such term as in section 3(w)(1) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1)).
            ``(6) The terms `community development organization', 
        `community development bank', and `community development 
        corporation' have the same meaning given such terms in section 
        234 of the Bank Enterprise Act of 1991.
            ``(7) The term `community development credit union' has the 
        same meaning given such term as in section 101(1) of the 
        Federal Credit Union Act (12 U.S.C. 1752(10)) [as amended 
        herein].''

SEC. 103. EXPEDITED PROCEDURES FOR COMMUNITY DEVELOPMENT CORPORATIONS.

    Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) 
is amended by inserting at the end the following new subsection:
    ``(j) Notice Procedures for Community Development Corporation 
Activities.--
            ``(1) General notice procedure.--No bank holding company 
        may acquire or retain ownership or control of the shares of a 
        community development corporation as authorized pursuant to 
        subsection (c) of this section without providing the Board with 
        at least 30 days prior written notice of the proposed 
        transaction or expansion.
            ``(2) Contents of notice.--The notice submitted to the 
        Board shall contain such information as the Board shall 
        prescribe by regulation or by specific request in connection 
        with a particular notice.
            ``(3) Procedure for agency action.--A notice filed under 
        this subsection shall be deemed to be approved by the Board 
        unless, prior to the expiration of 30 days from the receipt of 
        a complete notice, the Board issues an order setting forth the 
        reasons for disapproval.
            ``(4) Waiver.--Any activity of a Community Development 
        Corporation authorized under subsection (c) and subject to 
        paragraph (1), may proceed prior to the expiration of the 
        disapproval period if the Board issues a written notice of 
        approval.
            ``(5) Shorter period.--The Board may provide for a shorter 
        period of time for notice under this subsection if such action 
        would produce benefits to the public without adversely 
        affecting the safety and soundness of insured depository 
        institutions.''

SEC. 104. COMMUNITY DEVELOPMENT INVESTMENT ACCOUNTS.

    (a) National Banks.--Section 5136 of the revised statutes (12 
U.S.C. 24) is amended by inserting at the end the following:
    ``Twelfth. Notwithstanding any other provision of law, to organize, 
sponsor or underwrite securities issued by companies that are 
registered as investment companies under the Investment Company Act of 
1940: Provided, That such investment companies invest and trade only in 
securities issued by companies located and primarily doing business in 
qualified distressed communities as defined in section 233(b) of the 
Bank Enterprise Act of 1991.''
    (b) Savings Associations.--(b) Section 5(c)(1) of the Home Owners' 
Loan Act (12 U.S.C. 1464(c)(1)) is amended by inserting at the end the 
following:
            ``(S) Community development investment accounts.--
        Notwithstanding any other provision of law, to organize, 
        sponsor or underwrite securities issued by companies that are 
        registered as investment companies under the Investment Company 
        Act of 1940: Provided, That such investment companies invest 
        and trade only in securities issued by companies located and 
        primarily doing business in qualified distressed communities as 
        defined in section 233(b) of the Bank Enterprise Act of 1991.''

SEC. 105. ENHANCED PASSIVE INVESTMENTS AUTHORIZED FOR COMMUNITY 
              DEVELOPMENT ACTIVITIES.

    (a) In General.--Section 4(c) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(c)) is amended by adding the following paragraph:
            ``(15) shares of any company located and primarily doing 
        business in a qualified distressed community as defined in 
        section 233(b) of the Bank Enterprise Act of 1991 to the extent 
        that--
                    ``(A) the total amount of the shares of such 
                company acquired or retained in accordance with this 
                paragraph (by the bank holding company and any 
                subsidiary of the bank holding company) does not exceed 
                25 percent of the outstanding voting shares of the 
                company;
                    ``(B) the company is not under the operational 
                control, directly or indirectly, of the bank holding 
                company;
                    ``(C) the company does not engage in real estate or 
                real estate related activities not permissible for a 
                national bank; and
                    ``(D) the Board has been given notice by the bank 
                holding company of its intent to acquire or retain the 
                shares of such company in accordance with this 
                paragraph and has not disapproved the acquisition 
                within 45 days based on a finding that such acquisition 
                or retention of shares would adversely affect the 
                safety and soundness of insured depository institution 
                affiliates.''
    (b) Conforming Amendment.--Section 2(a)(3) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1841(a)) is amended by redesignating 
paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), 
respectively, and by inserting after paragraph (3) the following new 
paragraph:
    ``(4) For the purpose of any proceeding under paragraph (2)(C) or 
to which paragraph (5) applies, there shall be a presumption that any 
company which owns, controls, or has the power to vote not more than 25 
percent of any class of voting stock of any company as authorized by, 
and in conformity with, section 4(c)(15) of this Act does not control 
such company.''

SEC. 106. AWARDS PROGRAM.

    The Federal Financial Institutions Examination Council shall 
establish an annual awards program to publicly recognize tangible 
examples of outstanding efforts by insured depository institutions to 
meet the credit needs of their communities.

SEC. 107. QUALIFIED STOCK ISSUANCES FOR MINORITY THRIFTS.

    Section 10(q) of the Home Owners' Loan Act, 12 U.S.C. 1467a(q), is 
amended--
            (1) by deleting ``undercapitalized'' each place that it 
        appears and inserting ``eligible'';
            (2) in paragraph (1)(F), by deleting ``has capital'' and 
        all that follows and inserting ``is adequately capitalized as 
        determined under section 38 of the Federal Deposit Insurance 
        Act (12 U.S.C. 1831o).'';
            (3) in paragraph (1)(G), by deleting ``not more than 15'' 
        and inserting ``less than 25'';
            (4) by deleting subparagraphs (A) and (B) of paragraph (4), 
        as amended, and inserting new subparagraphs (A) and (B) to read 
        as follows--
                    ``(A) that is `undercapitalized' as determined 
                under section 38 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1831o); or
                    ``(B) that is a `minority depository institution' 
                as determined under section 3 note of the Home Owners' 
                Loan Act (12 U.S.C. 1463 note), as added by section 308 
                of the Financial Institutions Reform, Recovery and 
                Enforcement Act of 1989 (Public Law 101-73, 103 Stat. 
                183).''.

              TITLE II--HOUSING AND SMALL BUSINESS FINANCE

SEC. 201. GOVERNMENT SPONSORED ENTERPRISE PURCHASE GOALS.

    (a) Low- and Moderate-Income Housing Goals.--Section 1332(a) of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
is amended by adding the following new sentence to the end thereof: 
``The Secretary shall establish a separate specific sub-goal within the 
goal under this section for the purchase by each enterprise of 
mortgages originated by community development organizations as such 
term is described in section 234 of the Bank Enterprise Act of 1991.''.
    (b) Special Affordable Housing Goals.--Section 1333(a) of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
is amended by adding the following new sentence to the end thereof: 
``The Secretary shall establish a separate specific sub-goal within the 
goal under this section for the purchase by each enterprise of 
mortgages originated by community development organizations as such 
term is described in section 234 of the Bank Enterprise Act of 1991.''.
    (c) Housing Goals for Underserved Areas.--Section 1334(a) of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
is amended by adding the following new sentence to the end thereof: 
``The Secretary shall establish a separate specific sub-goal within the 
goal under this section for the purchase by each enterprise of 
mortgages originated by community development organizations as such 
term is described in section 234 of the Bank Enterprise Act of 1991.''
    (d) Additional Requirements.--Section 1335 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 is amended--
            (1) by striking ``and'' at the end of paragraph (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting in lieu thereof ``; and''; and
            (3) by inserting the following new paragraph (5) at the end 
        thereof:
    ``(5) assist community development organizations, as such term is 
described in section 234 of the Bank Enterprise Act of 1991, to develop 
the institutional capacity to assist low- and moderate-income families 
with the purchase of their first home.''

SEC. 202. QUALIFIED THRIFT LENDER TEST.

    Section 10(m)(4)(C)(ii) of the Home Owners Loan Act (12 U.S.C. 
1467a(m)(4)(C)(ii)) is amended by inserting at the end the following 
subclause:
                                    ``(VII) Loans or extensions of 
                                credit for the purchase, improvement, 
                                or construction of churches, schools, 
                                nursing homes or hospitals located 
                                within, and loans or extensions of 
                                credit for any purposes to any small 
                                businesses located within, a qualified 
                                distressed community as defined in 
                                section 233(b) of the Bank Enterprise 
                                Act of 1991.''.

SEC. 203. MICRO-LOAN GUARANTEE DEMONSTRATION PROGRAM.

    (a) Purposes.--Section 7(m)(1)(A)(iii) of the Small Business Act is 
amended by redesignating subclauses (II), (III), and (IV) as subclauses 
(III), (IV), and (V), respectively, and inserting after subclause (I) 
the following new subclause (II):
                                    ``(II) to establish a model program 
                                to determine the feasibility of 
                                developing a private secondary market 
                                for loans guaranteed under this 
                                subsection to enhance the availability 
                                of credit to small business concerns 
                                for working capital or the acquisition 
                                of material, supplies, or equipment.''.
    (b) Establishment.--Section 7(m)(1)(B) of the Small Business Act is 
amended by striking out ``direct loans'' in clause (i), and inserting 
in lieu thereof the following: ``loans (either directly or through 
agreements to participate on a guaranteed basis)'';
    (c) Eligibility for participation.--Section 7(m)(2)(B) of the Small 
Business Act is amended--
            (1) in subparagraph (A), by striking ``(10)'' and inserting 
        in lieu thereof ``(12)''; and
            (2) in subparagraph (B), by striking the period at the end 
        and inserting in lieu thereof the following: ``or has 
        demonstrated to the satisfaction of the Administration a 
        commitment to establish a micro-loan program that includes 
        intensive marketing, management, and technical assistance to 
        its borrowers.''.
    (d) Terms and Conditions.--Section 7(m)(3)(F) of the Small Business 
Act is amended by adding the following new clause after clause (v):
                            ``(vi) Notwithstanding any other 
                        requirement of this subparagraph, the 
                        Administration may provide such terms and 
                        conditions, including interest rate 
                        requirements and percentage of guarantee but 
                        not less than 90 percent, as it deems 
                        appropriate for purposes of making loan 
                        guarantees under this subsection.''.
    (e) Portfolio Requirement.--Section 7(m)(6)(B) of the Small 
Business Act is amended by inserting after ``practicable'' the 
following: ``and except as provided by the Administration with regard 
to loan guarantees made under this subsection''.
    (f) Model Program to Establish a Secondary Market for Guaranteed 
Loans.--Section 7(m) of the Small Business Act is amended by 
redesignating paragraphs (10) and (11) as paragraphs (11) and (12), 
respectively, and inserting after paragraph (9) the following new 
paragraph (10):
            ``(10) Model Program for Establishing a Secondary Market 
        for Guaranteed Loans.--The Administration is authorized to 
        establish a model program to determine the feasibility of 
        developing a private secondary market for loans guaranteed 
        under this subsection (including the guaranteeing of locally 
        originated loan pools) to enhance the availability of credit to 
        small business concerns for working capital or the acquisition 
        of material, supplies, or equipment.''.
    (g) Report to Congress.--Section 7(m)(11) of the Small Business Act 
(as redesignated by this section) is amended--
            (1) in subparagraph (F), striking ``and'' after the 
        semicolon; and
            (2) redesignating subparagraph (G) as subparagraph (H), and 
        inserting after subparagraph (F) the following new subparagraph 
        (G):
                    ``(G) a description of the loan guarantee program, 
                including the extent to which credit may be made 
                available to small businesses through a private 
                secondary market for small business loan guarantees and 
                the cost to the Federal Government for making such 
                guarantees available; and''.
    (h) Definitions.--Section 7(m)(12) of the Small Business Act (as 
redesignated by this section) is amended--
            (1) in clause (iii), by striking ``or'' after the 
        semicolon;
            (2) by inserting after clause (iv), the following:
                            ``(v) any insured depository institution, 
                        as such term is defined in section 3(c)(2) of 
                        the Federal Deposit Insurance Act;
                            ``(vi) any insured credit union, as such 
                        term is defined in section 101(7) of the 
                        Federal Credit Union Act; or
                            ``(vii) any community development 
                        organization as such term is described in 
                        section 234 of the Bank Enterprise Act of 
                        1991.''.

                   TITLE III--CREDIT UNION AMENDMENTS

SEC. 301. COMMUNITY DEVELOPMENT CREDIT UNIONS.

    (a) Section 101(5) of the Federal Credit Union Act (12 U.S.C. 
1752(5)) is amended by striking ``in the case of a credit union serving 
predominantly low-income members (as defined by the Board)'' and 
inserting ``in the case of a community development credit union as 
defined in subsection (10)''.
    (b) Section 101 of the Federal Credit Union Act (12 U.S.C. 1752) is 
amended by adding at the end the following:
            ``(10) In determining whether a State or federally 
        chartered credit union is a `community development credit 
        union', the Board may consider whether the institution--
                    ``(A) serves predominantly members whose median 
                household incomes are below 80 percent of the national 
                median, or who make less than 80 percent of the average 
                for all wage earners as established by the Bureau of 
                Labor Statistics; or
                    ``(B) serves predominately low- and moderate-income 
                minorities.''.

SEC. 302. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND AND TECHNICAL 
              ASSISTANCE.

    (a) Section 120(k) of the Federal Credit Union Act (12 U.S.C. 
1766(k)) is deleted.
    (b) The Federal Credit Union Act is amended by inserting after 
section 129 (12 U.S.C. 1772c) the following new section:

``SECTION 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT 
              UNIONS.

    ``(a) Notwithstanding any other provision of law, the Board may 
exercise the authority granted it by the Community Development Credit 
Union Revolving Loan Fund Transfer Act (Public Law 99-609, section 1, 
November 6, 1986) including any additional appropriation made and 
earnings accrued, subject only to this section and to rules and 
regulations prescribed by the Board.
    ``(b) The Board has the authority to invest any idle Fund monies in 
United States Treasury securities. Any interest accrued on such 
securities shall become a part of the fund.
    ``(c) The Board may require that any loans it makes from the Fund 
be matched by increased shares in the borrower credit union.
    ``(d) Interest earned by the Fund may be allocated by the Board for 
technical assistance to community development credit unions, as defined 
by the Board subject to section 101(10) of the Act.''.

               TITLE IV--BANK ENTERPRISE ACT ENHANCEMENTS

SEC. 401. CREDITS FOR NEWLY CHARTERED COMMUNITY DEVELOPMENT BANKS.

    (a) Section 233(a) of the Bank Enterprise Act of 1991 (12 U.S.C. 
1834a(a)) is amended by redesignating paragraphs (3), (4), (5) and (6) 
as paragraphs (4), (5), (6), and (7) and by inserting after paragraph 
(2) the following:
            ``(3) Newly chartered community development banks.--
        Notwithstanding paragraph (2), any insured depository 
        institution chartered as a community development bank in 
        accordance with the requirements of section 234(b) of this Act 
        shall be eligible for any community enterprise assessment 
        credit for any semiannual period during the first three years 
        following the approval of the initial charter of such insured 
        depository institution by the appropriate Federal banking 
        agency or State supervisor.''.
    (b) Conforming Amendment.--Section 233(a)(1)(B) of the Bank 
Enterprise Act of 1991 (12 U.S.C. 1834a(a)(1)(B)) is amended by 
striking ``paragraph (3)'' and inserting ``paragraph (4)''.

SEC. 402. FINANCIAL SERVICES FOR DISTRESSED COMMUNITIES.

    (a) Bank Enterprise Act.--The Bank Enterprise Act of 1991 is 
amended by inserting at the end the following new section:

``SEC. 235. FINANCIAL SERVICES FOR DISTRESSED COMMUNITIES.

    ``(a) Distressed Communities Lacking Insurance Services.--
            ``(1) In general.--With the approval of the appropriate 
        Federal banking agency and notwithstanding any provision of the 
        law of any State to the contrary, any insured depository 
        institution which is located in (or maintains a full service 
        branch located in) a qualified distressed community may sell 
        property and casualty insurance, as agent or broker, to the 
        extent--
                    ``(A) the insurance activities are confined to that 
                community; and
                    ``(B) the insurance is sold only to residents of 
                the community or individuals employed within such 
                community.
            ``(2) Certain activities prohibited in connection with 
        insurance activities.--No insured depository institution which 
        sells insurance pursuant to paragraph (1) may--
                    ``(A) assume or guarantee the payment of any 
                premium on any insurance policy issued through the 
                agency of the institution by the insurance company for 
                which the institution is acting as agent; or
                    ``(B) guarantee the truth of any statement made by 
                an insurance customer in filing such customer's 
                application for insurance.
            ``(3) Showing of unavailability of insurance services.--The 
        appropriate Federal banking agency may approve an application 
        by an insured depository institution to sell insurance under 
        paragraph (1) in any qualified distressed community only if the 
        institution provides sufficient evidence that the availability 
        of insurance agents providing competitively-priced products in 
        the community is inadequate.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Appropriate federal banking agency.--The term 
                `appropriate Federal banking agency' has the meaning 
                given to such term in section 3(q) of the Federal 
                Deposit Insurance Act.
                    ``(B) Qualified distressed community.--The term 
                `qualified distressed community' has the meaning given 
                to such term in section 233(b).''.
    (b) Bank Eligible Securities.--The clause designated the 
``Seventh'' of section 5136 of the Revised Statutes (12 U.S.C. 24) is 
amended by adding at the end the following new sentence: ``Subject to 
the approval of the appropriate Federal banking agency (as defined in 
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), 
and to such limits as may be prescribed by regulation, any well 
capitalized national bank which is located in (or maintains a full 
service branch located in) a qualified distressed community (as defined 
in section 233(b) of the Bank Enterprise Act of 1991) may purchase for 
its own account, deal in, or underwrite securities issued by any small 
business located in such community.''.
    (c) Savings Associations.--Section 5(c)(1) of the Home Owners' Loan 
Act (12 U.S.C. 1464(c)(1)) (as previously amended herein) is amended by 
inserting at the end the following:
                    ``(T) Thrift eligible securities.--Subject to the 
                approval of the Director and to such limits as may be 
                prescribed by regulation, any well capitalized savings 
                association which is located in (or maintains a full 
                service branch located in) a qualified distressed 
                community (as defined in section 233(b) of the Bank 
                Enterprise Act of 1991) may purchase for its own 
                account, deal in, or underwrite securities issued by 
                any small business located in such community.''

SEC. 403. BANK ENTERPRISE ACT ENHANCEMENTS.

    (a) Qualified Distressed Communities.--Section 233(b)(1)(B) of the 
Bank Enterprise Act of 1991 is amended to read as follows:
                    ``(B) is designated as a distressed community by 
                the Board or by any insured depository institution in 
                accordance with paragraph (2) and any designation by an 
                insured depository institution is not disapproved by 
                the appropriate federal banking agency under such 
                paragraph.''.
    (b) Rural Distressed Areas.--Section 233(b) of the Bank Enterprise 
Act of 1991 is amended by inserting at the end the following:
            ``(5) Qualified distressed rural areas.--
                    ``(A) In General.--Notwithstanding paragraph (4), 
                the Board shall establish independent criteria for a 
                distressed rural area to be eligible as a `qualified 
                distressed community' under this subsection.
                    ``(B) Factors.--In establishing the criteria for a 
                distressed rural area to be eligible as a `qualified 
                distressed community' under this subsection, the Board 
                shall consider, but not be limited to, the following 
                factors:
                            ``(i) Population (as determined by the most 
                        recent; census data available);
                            ``(ii) State of distress;
                            ``(iii) Size;
                            ``(iv) Unemployment rate;
                            ``(v) Poverty rate;
                            ``(vi) Job loss; and
                            ``(vii) Out-migration.''.
    (c) Expanded Qualified Loans and Financial Assistance.--Section 
233(a)(4) of the Bank Enterprise Act of 1991 is amended by inserting at 
the end the following:
                    ``(L) Extensions of credit to small businesses 
                located within a qualified distressed community.
                    ``(M) Consumer education programs either sponsored 
                or offered by insured depository institutions that 
                provide assistance to residents of qualified distressed 
                communities in managing their personal finances.
                    ``(N) Technical assistance and consulting services 
                to newly formed small businesses located in qualified 
                distressed communities.''.
                    ``(O) Technical assistance to, or servicing the 
                loans of, low- or moderate-income homeowners, and 
                homeowners located in qualified distressed communities.
    (d) Priority of Funding.--Section 233 of the Bank Enterprise Act of 
1991 is amended by redesignating subsection (g) as subsection (h) and 
inserting after subsection (f) the following:
    ``(g) Priority of Funding.--In allocating funds for the 
implementation of this section, the Board shall grant a priority to 
qualified distressed communities designated by the Board pursuant to 
section 233(b)(1)(B) and no less than 25 percent of the funds 
authorized and appropriated for the implementation of this section 
shall be allocated by the Board to distressed rural areas that are 
determined to be qualified distressed communities pursuant to section 
233(b)(5).''.
    (e) Community Development Organizations.--Section 234(e) of the 
Bank Enterprise Act of 1991 is amended by striking ``institution,'' and 
inserting ``institution, non-profit micro-loan lending organization 
licensed by the Small Business Administration, Small Business 
Association certified development company,''.

                      TITLE V--CONSUMER EDUCATION

SEC. 501. CONSUMER EDUCATION PROGRAMS.

    (a) In General.--The appropriate Federal banking agencies (as 
defined in section 3(q) of the Federal Deposit Insurance Act) shall, to 
the extent practicable, encourage insured depository institutions to 
offer or sponsor educational services for consumers residing in 
qualified distressed communities (as defined in section 233(b) of the 
Bank Enterprise Act of 1991) located in the service area of such 
institutions, relating to the financial products and services offered 
by the institution.
    (b) Educational Services.--The educational services sponsored or 
offered by insured depository institutions as described in subsection 
(a) shall, to the extent practicable, include a course in personal 
finance designed for persons in a qualified distressed community and 
such course may include information related to the following:
            (1) Consumer credit laws and consumer rights and 
        obligations;
            (2) The credit process and how to obtain a loan;
            (3) The meaning and significance of entries on a consumer 
        report (as defined in section 603(d) of the Fair Credit 
        Reporting Act);
            (4) Basic banking and personal finances; and
            (5) Development of an individual financial plan and budget.

SECTION 502. CREDIT REPORTS.

    (a) Insured Depository Institutions.--Any insured depository 
institution that sponsors or offers a course for consumers residing in 
a qualified distressed community as described in section 501(b) of the 
Community Development Banking Act of 1993 may, in its discretion and to 
the extent practicable, report the names of any consumer who complete 
such course to any consumer reporting agency (as defined in section 
603(f) of the Fair Credit Reporting Act) to which the institution 
regularly reports credit information on consumers.
    (b) Consumer Reporting Agencies.--Any consumer report furnished by 
a consumer reporting agency on any consumer residing in a qualified 
distressed community who has completed an educational course sponsored 
or offered by an insured depository institution as described in section 
501(b) of the Community Development Banking Act of 1993 may, to the 
extent practicable, include an indication of the completion of such 
course if the consumer reporting agency has received notice of the 
course completion from the institution.

SECTION 503. CREDIT CARDS.

    Insured depository institutions are encouraged to sponsor or offer 
courses for consumers residing in qualified distressed communities as 
described in section 501(b) of the Community Development Banking Act of 
1993, and at their discretion and to the extent practicable, offer 
consumer financial services otherwise available at such institution, 
including consumer credit card services, to such consumers who complete 
such course and qualify for such financial services.

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