I

103D CONGRESS

1ST SESSION H. R. 2707

To establish the Community Development Fund, to promote community development lending by financial institutions in economically distressed areas,

to authorize the Federal Home Loan Bank System to engage in activities

to satisfy housing finance and community development needs that are

not being met, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 22, 1993

Mr. FLAKE (for himself, Mr. LEACH, Mr. FRANK of Massachusetts, Mr. LAFALCE, Mr. RIDGE, Mr. WYNN, Mrs. ROUKEMA, Mr. WATT, Mr. BAKER

of Louisiana, and Ms. ROYBAL-ALLARD) introduced the following bill;

which was referred jointly to the Committees on Banking, Finance and

Urban Affairs and Small Business

A BILL

To establish the Community Development Fund, to promote

community development lending by financial institutions

in economically distressed areas, to authorize the Federal

Home Loan Bank System to engage in activities to satisfy housing finance and community development needs

that are not being met, 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,
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1 SECTION 1. SHORT TITLE.

2 This Act shall be cited as the ‘‘Bank Enterprise Act

3 Amendments of 1993’’.

4 SEC. 2. FINDINGS AND PURPOSES.

5 (a) FINDINGS.—The Congress finds the following:

6 (1) Many small- and medium-size businesses,

7 low- to moderate-income individuals and economi8 cally distressed areas lack adequate access to credit

9 and private capital.

10 (2) Community development is most productive

11 when neighborhood residents and merchants, non12 profit organizations, local government officials, and

13 private lenders cooperate to create a more positive

14 physical, financial and market environment which

15 encourages and supports private investment and re16 investment.

17 (3) The best way to address problems of de18 pressed economies in inner cities, rural areas, and

19 other underserved communities is by empowering

20 local residents through technical assistance and mar21 ket incentives for pooling local resources.

22 (4) There is a need to provide existing regu23 lated financial institutions with incentives to provide

24 these groups with adequate access to credit and pri25 vate capital without compromising safety and sound26 ness.
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1 (5) There is a need to encourage all private sec2 tor institutions, including community development

3 banks, community development corporations, com4 munity development credit unions and small busi5 ness investment corporations to provide these groups

6 with adequate access to credit and private capital

7 without the creation of an additional Federal bu8 reaucracy and without exposing taxpayers to unnec9 essary risk.

10 (6) There is a need for the Administration to

11 complete implementing guidelines for existing initia12 tives, such as the Bank Enterprise Act, designed to

13 provide these groups with adequate access to credit

14 and private capital.

15 (b) PURPOSE.—The purpose of this Act is to provide

16 small- and medium-sized businesses, low- and moderate17 income individuals and economically distressed areas with

18 adequate access to credit and private capital by providing

19 incentives to regulated financial institutions and other pri20 vate sector institutions.
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1 TITLE I—BANK ENTERPRISE ACT

2 ENHANCEMENTS

3 SEC. 101. COMMUNITY DEVELOPMENT FUND.

4 (a) IN GENERAL.—The Bank Enterprise Act (12

5 U.S.C. 1834 et seq.) is amended by adding at the end

6 the following new sections:

7 ‘‘SEC. 235. COMMUNITY DEVELOPMENT FUND.

8 ‘‘(a) IN GENERAL.—There is hereby established the

9 Community Development Fund (hereafter in this section

10 referred to as the ‘Fund’).

11 ‘‘(b) ADMINISTRATION OF FUND.—

12 ‘‘(1) IN GENERAL.—The Fund shall be adminis13 tered by the Community Enterprise Assessment

14 Credit Board (hereafter in this section referred to as

15 the ‘Board’).

16 ‘‘(2) STANDARDS AND PROCEDURES.—The

17 Board shall establish standards and procedures for

18 administering the Fund, processing and reviewing

19 applications for financial and technical assistance,

20 and providing oversight for the expenditure of

21 money from the Fund and for projects funded by the

22 Fund.

23 ‘‘(3) NATIONAL INFORMATION CLEARING24 HOUSE.—The Fund shall establish and maintain an

25 information clearinghouse in coordination with the
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1 Departments of Agriculture, Commerce, and Hous2 ing and Urban Development, the Small Business Ad3 ministration, other Federal agencies, and community

4 development financial institutions—

5 ‘‘(A) to cause to be collected, compiled,

6 and analyzed information pertinent to commu7 nity development financial institutions that will

8 assist in creating, developing, expanding, and

9 preserving these institutions; and

10 ‘‘(B) to cause to be established a service

11 center for comprehensive information on finan12 cial, technical and management assistance, case

13 studies of the activities of community develop14 ment financial institutions, regulations, and

15 other information that may be useful to pro16 mote the purpose of this Act.

17 ‘‘(4) POWERS.—The Board shall have such

18 powers as may be necessary for the Board, in the

19 Board’s status as a Federal agency, to administer

20 the Fund and carry out the purposes of this section.

21 ‘‘(5) REGULATIONS.—The Board may prescribe

22 such regulations and issue such orders as the Board

23 may determine to be appropriate to administer the

24 Fund and carry out the purposes of this section.
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1 ‘‘(c) PURPOSES OF FUND.—Amounts in the Fund

2 shall be available to—

3 ‘‘(1) support a program of making investments

4 in and providing assistance to community develop5 ment financial institutions that will provide greater

6 economic opportunity in qualified distressed commu7 nities;

8 ‘‘(2) provide financial and technical assistance

9 to community development financial institutions; and

10 ‘‘(3) operate a national information clearing11 house described in subsection (b)(3).

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—

13 ‘‘(1) FUND.—There are authorized to be appro14 priated to the Fund to carry out this section

15 $30,000,000 for fiscal year 1994, $52,000,000 for

16 fiscal year 1995, $53,500,000 for fiscal year 1996,

17 and $55,500,000 for fiscal year 1997.

18 ‘‘(2) BOARD.—There are authorized to be ap19 propriated to the Board to carry out this subtitle

20 (other than this section) $30,000,000 for fiscal year

21 1994, $52,000,000 for fiscal year 1995,

22 $53,500,000 for fiscal year 1996, and $55,500,000

23 for fiscal year 1997.

24 ‘‘(e) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) COMMUNITY DEVELOPMENT FINANCIAL IN2 STITUTION.—The term ‘community development fi3 nancial institution’—

4 ‘‘(A) means any bank, savings association,

5 credit union, depository institution holding com6 pany or affiliate of such company,

7 microenterprise development fund, community

8 development corporation, community develop9 ment revolving loan fund, or other depository or

10 nondepository organization which—

11 ‘‘(i) promotes the provision of capital,

12 credit, or development services in qualified

13 distressed communities; and

14 ‘‘(ii) the Board finds provides the

15 same or greater community participation

16 in the activities of the institution or orga17 nization as are required under section

18 234(b) for a community development bank;

19 and

20 ‘‘(B) does not include an agency or instru21 mentality of the United States or an agency or

22 instrumentality of any State or political subdivi23 sion of any State.

24 ‘‘(2) BANK, SAVINGS ASSOCIATION, DEPOSITORY

25 INSTITUTION HOLDING COMPANY, AND AFFILIATE.—
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1 The terms ‘bank’, ‘savings association’, ‘depository

2 institution holding company’, and ‘affiliate’ have the

3 meaning given to such terms in section 3 of the Fed4 eral Deposit Insurance Act.

5 ‘‘(3) CREDIT UNION.—The term ‘credit union’

6 means any State or Federal credit union (as defined

7 in section 101 of the Federal Credit Union Act).

8 ‘‘(4) DEVELOPMENT SERVICES.—The term ‘de9 velopment services’ means activities conducted by a

10 community development financial institution which

11 promote community development by developing, sup12 porting, and strengthening the lending, investment,

13 and capacity-building activities undertaken by insti14 tutions, including—

15 ‘‘(A) business planning services;

16 ‘‘(B) financial and credit counseling serv17 ices;

18 ‘‘(C) marketing and management assist19 ance; and

20 ‘‘(D) administrative activities associated

21 with lending or investment.

22 ‘‘(5) INSURED COMMUNITY DEVELOPMENT FI23 NANCIAL INSTITUTION.—The term ‘insured commu24 nity development financial institution’—
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1 ‘‘(A) means any community development

2 financial institution which is an insured deposi3 tory institution; and

4 ‘‘(B) any insured credit union which has

5 been designated as low-income by the National

6 Credit Union Administration.

7 ‘‘(6) INSURED CREDIT UNION.—The term ‘in8 sured credit union’ has the same meaning given to

9 such term in section 101(7) of the Federal Credit

10 Union Act.

11 ‘‘(7) INSURED DEPOSITORY INSTITUTION.—The

12 term ‘insured depository institution’ has the mean13 ing given to such term in section 3(c) of the Federal

14 Deposit Insurance Act.

15 ‘‘(8) QUALIFIED DISTRESSED COMMUNITY.—

16 The term ‘qualified distressed community’ has the

17 meaning given to such term in section 233(b).

18 ‘‘(9) STATE.—The term ‘State’ has the mean19 ing given to such term in section 3 of the Federal

20 Deposit Insurance Act.

21 ‘‘SEC. 236. APPLICATIONS FOR ASSISTANCE FROM FUND.

22 ‘‘(a) FORM AND PROCEDURES.—An application for

23 assistance under section 235 shall be submitted by an ap24 plicant in such form and in accordance with such proce25 dures as the Board shall establish.
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1 ‘‘(b) MINIMUM REQUIREMENTS.—The Board shall

2 require that the application—

3 ‘‘(1) demonstrate to the satisfaction of the

4 Board that the applicant is, or upon the receipt of

5 a charter will be, a community development financial

6 institution;

7 ‘‘(2) demonstrate that the applicant will serve a

8 qualified distressed community;

9 ‘‘(3) in the case of an applicant that has pre10 viously received assistance from the Fund, dem11 onstrate that the applicant—

12 ‘‘(A) has successfully carried out the appli13 cant’s responsibilities with respect to such as14 sistance;

15 ‘‘(B) has become or is about to become an

16 entity that will not be dependent upon assist17 ance from the Fund for continued viability; and

18 ‘‘(C) will expand the applicant’s operations

19 into a new qualified distressed community, offer

20 new services, or will increase the volume of its

21 current business;

22 ‘‘(4) in the case of a community development fi23 nancial institution with existing operations, dem24 onstrate a record of success of serving a qualified

25 distressed community;
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1 ‘‘(5) include a detailed and comprehensive stra2 tegic plan for the organization that contains—

3 ‘‘(A) a business plan of at least 5 years

4 that demonstrates the applicant is properly

5 managed and has the capacity to form and op6 erate a community development financial insti7 tution that is, or will become, an entity that will

8 not be dependent upon assistance from the

9 Fund for continued viability;

10 ‘‘(B) a statement that the applicant has,

11 or will have, in the applicant’s charter or other

12 governing documents a commitment to commu13 nity development, or other evidence of a prior

14 history and a continuing affirmation of a com15 mitment of community development;

16 ‘‘(C) an analysis of the needs of the quali17 fied distressed community and a strategy for

18 how the applicant will attempt to meet those

19 needs;

20 ‘‘(D) a plan to coordinate use of assistance

21 from the Fund with existing Federal, govern22 ment-sponsored enterprise, and State and local

23 assistance programs, and private sector finan24 cial services;
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1 ‘‘(E) a statement that the proposed activi2 ties of the applicant are consistent with existing

3 economic, community and housing development

4 plans adopted by or applicable to the qualified

5 distressed community;

6 ‘‘(F) a description of how the applicant

7 will affiliate, network, or otherwise coordinate

8 with a full range of community organizations

9 and financial institutions which provide, or will

10 provide, capital, credit, or secondary markets in

11 order to assure that banking, economic develop12 ment, investment, affordable housing, and other

13 related services will be available within the

14 qualified distressed community; and

15 ‘‘(G) such other information as the Board

16 considers to be appropriate for inclusion in the

17 strategic plan;

18 ‘‘(6) demonstrate that the applicant will carry

19 on the applicant’s activities consistent with the pur20 poses of the assistance provided by the Fund within

21 the qualified distressed community;

22 ‘‘(7) include a detailed and specific statement of

23 applicant’s plans and likely sources of funds to

24 match the amount of assistance from the Fund with
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1 funds from private sources in accordance with the

2 requirements of section 238(e); and

3 ‘‘(8) include such other information as the

4 Board may require.

5 ‘‘SEC. 237. SELECTION OF INSTITUTIONS.

6 ‘‘(a) IN GENERAL.—The Board shall, in the Board’s

7 discretion, select applications that meet the requirements

8 of section 236 and award assistance from the Fund in ac9 cordance with section 238.

10 ‘‘(b) SELECTION CRITERIA.—In selecting applica11 tions, the Board shall consider applications based on fac12 tors established by the Board which shall include the fol13 lowing criteria:

14 ‘‘(1) The likelihood of success of the applicant

15 in forming and operating a community development

16 financial institution.

17 ‘‘(2) The range and comprehensiveness of the

18 capital, credit, and development services to be pro19 vided by the applicant.

20 ‘‘(3) The extent of the need, as measured by

21 objective criteria of distress, within the qualified dis22 tressed community for the types of activities pro23 posed by the applicant.

24 ‘‘(4) The likelihood that the proposed activities

25 will benefit a significant portion of the qualified dis-
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1 tressed community or, in the case of a community

2 development financial institution with existing oper3 ations, evidence of the applicant’s record of success

4 in serving a qualified distressed community.

5 ‘‘(5) The extent to which the applicant will con6 centrate the applicant’s activities on serving low and

7 very low-income families.

8 ‘‘(6) The evidence of the extent of a broad

9 cross-section of support from the qualified distressed

10 community.

11 ‘‘(7) The experience and background of the pro12 posed management team.

13 ‘‘(8) The amount of legally enforceable commit14 ments available at the time of application to meet or

15 exceed the matching requirements under section

16 238(e) and the strength of the plan for raising the

17 balance of the match.

18 ‘‘(9) In the case of applicants that have pre19 viously received assistance from the Fund, the extent

20 to which they have met or exceeded the performance

21 goals applicable with respect to such assistance.

22 ‘‘(10) The extent to which the proposed activi23 ties will expand the employment base within the

24 qualified distressed community.
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1 ‘‘(11) The extent to which the applicant is, or

2 will be, community-owned or community-governed.

3 ‘‘(12) Whether the applicant is, or will become,

4 an insured community development financial institu5 tion.

6 ‘‘(13) Whether the applicant is, or will be lo7 cated, in a qualified distressed community.

8 ‘‘(14) In the case of an institution that is not

9 an insured community development financial institu10 tion, the extent to which the institution has or will

11 have the ability to increase the applicant’s resources

12 through affiliation with a secondary market, insured

13 depository institution, or other financial

14 intermediary in order to multiply the amount of cap15 ital or credit available for community development.

16 ‘‘(15) In the case of an insured depository insti17 tution or insured credit union applicant, whether the

18 institution—

19 ‘‘(A) has or will have a substantial affili20 ation with an entity or network of entities that

21 are community development financial institu22 tions; and

23 ‘‘(B) has a comprehensive plan for provid24 ing meaningful financial assistance to such an

25 entity or network of entities.
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1 ‘‘(c) FAIR DISTRIBUTION OF FUNDING.—In addition

2 to the criteria described in subsection (b), the Board, in

3 making selections under this section, shall seek to provide

4 a fair distribution of funding among—

5 ‘‘(1) a geographically diverse group of appli6 cants, which shall include applicants from

7 nonmetropolitan and rural areas;

8 ‘‘(2) various types of community development

9 financial institutions; and

10 ‘‘(3) community development financial institu11 tions of various sizes (as determined on the basis of

12 total assets).

13 ‘‘SEC. 238. ASSISTANCE PROVIDED BY THE FUND.

14 ‘‘(A) IN GENERAL.—

15 ‘‘(1) PROMOTION OF HOSPITABLE ENVIRON16 MENT FOR DEVELOPMENT AND GROWTH.—The

17 Fund shall work to promote an environment hos18 pitable to business information, economic growth,

19 community development, and affordable housing in

20 qualified distressed communities.

21 ‘‘(2) COORDINATION OF ACTIVITIES.—The

22 Fund shall coordinate activities of the Fund with

23 other Federal agencies and other community and

24 economic development programs.
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1 ‘‘(3) PURPOSE OF ASSISTANCE.—Assistance

2 may be provided to—

3 ‘‘(A) an existing qualified community de4 velopment financial institution to—

5 ‘‘(i) expand the institution’s activities

6 to serve any qualified distressed commu7 nity not currently served by another quali8 fied community development financial in9 stitution receiving assistance under this

10 section; and

11 ‘‘(ii) expand the volume of the institu12 tion’s activities consistent with the pur13 poses of the Fund;

14 ‘‘(B) from a new entity to undertake ac15 tivities consistent with the purposes of the

16 Fund; or

17 ‘‘(C) to assist an existing entity to modify

18 the entity’s structure or activities in order to

19 undertake activities consistent with the pur20 poses of the Fund.

21 ‘‘(b) TYPES OF ASSISTANCE.—

22 ‘‘(1) IN GENERAL.—

23 ‘‘(A) FINANCIAL ASSISTANCE.—The Fund

24 may provide financial assistance to qualified

25 community development financial institutions
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1 through equity investments, loans, deposits,

2 membership shares, and grants.

3 ‘‘(B) TECHNICAL ASSISTANCE.—The Fund

4 may provide technical assistance, including

5 training, and grants for technical assistance to

6 qualified community development financial in7 stitutions.

8 ‘‘(C) ALLOCATION OF ASSISTANCE.—The

9 allocation of awards of assistance between in10 sured and uninsured community development fi11 nancial institutions shall be in the discretion of

12 the Board, except that due consideration shall

13 be given to the allocation of funds to insured

14 community development financial institutions.

15 ‘‘(2) LIMITATIONS ON EQUITY INVESTMENTS.—

16 ‘‘(A) 50 PERCENT OF EQUITY MAXIMUM.—

17 The Fund shall structure financial assistance to

18 a qualified community development financial in19 stitution in such a manner that the Fund does

20 not own more than 50 percent of the equity of

21 such institution after providing such assistance

22 and does not control the operations of such in23 stitution.

24 ‘‘(B) COORDINATION WITH OTHER

25 LAWS.—The Fund shall not be deemed to con-
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1 trol any institution in which the Fund has an

2 equity investment for the purposes of any appli3 cable Federal or State law.

4 ‘‘(C) LIMITATION ON FORM OF EQUITY.—

5 In the case of equity investments, the Fund

6 shall hold only transferable, nonvoting invest7 ments, except that the security representing any

8 such equity investment may provide for convert9 ibility to working stock upon transfer of the se10 curity by the Fund.

11 ‘‘(3) DEPOSITS.—Notwithstanding any other

12 provision of law, deposits made pursuant to this sec13 tion in qualified insured community development fi14 nancial institutions shall not be subject to any re15 quirement for collateral or security.

16 ‘‘(4) LIMITATIONS ON OBLIGATIONS.—Direct

17 loan obligations may be incurred only to the extent

18 that appropriations of budget authority to cover

19 their costs, as defined in section 502 of the Congres20 sional Budget Act of 1974, are made in advance.

21 ‘‘(c) PURPOSE OF FINANCIAL ASSISTANCE.—Finan22 cial assistance made available under this section may be

23 used by assisted institutions to develop or support—
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1 ‘‘(1) commercial facilities that enhance revital2 ization, community stability, or job creation and re3 tention efforts;

4 ‘‘(2) business creation and expansion efforts

5 that—

6 ‘‘(A) create or retain jobs for low-income

7 people;

8 ‘‘(B) enhance the availability of products

9 and services to low-income people; or

10 ‘‘(C) create or retain businesses owned by

11 low-income people or residents of a qualified

12 distressed community;

13 ‘‘(3) community facilities that provide benefits

14 to low-income people or enhance community stabil15 ity;

16 ‘‘(4) the provision of basic financial services to

17 low-income people or residents of a qualified dis18 tressed community;

19 ‘‘(5) the provision of development services;

20 ‘‘(6) home ownership opportunities that are af21 fordable to low-income households;

22 ‘‘(7) rental housing that is principally afford23 able to low-income households; and

24 ‘‘(8) other activities deemed appropriate by the

25 Fund.
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1 ‘‘(d) AMOUNT OF ASSISTANCE.—

2 ‘‘(1) IN GENERAL.—The Fund may provide up

3 to $5,000,000 of assistance per application to any

4 one qualified insured community development finan5 cial institution and up to $2,000,000 per application

6 to any other qualified community development finan7 cial institution.

8 ‘‘(2) AUTHORITY OF BOARD TO SET MINIMUM

9 AMOUNTS.—The Board shall have the authority to

10 set minimum amounts of assistance from the Fund

11 per institution.

12 ‘‘(e) MATCHING REQUIREMENTS.—

13 ‘‘(1) IN GENERAL.—Assistance provided to

14 qualified insured community development financial

15 institutions, other than deposits or membership

16 shares of $100,000 or less, technical assistance, or

17 grants for technical assistance, shall be matched by

18 no less than $1 of equity, deposits, or membership

19 shares for each dollar provided by the Fund.

20 ‘‘(2) OTHER FORMS OF ASSISTANCE.—

21 ‘‘(A) GENERAL RULE.—The Fund shall re22 quire a match for all other assistance, the

23 amount and form of which shall be in the dis24 cretion of the Fund.
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1 ‘‘(B) EXCEPTION.—The Fund shall in no

2 event require assistance provided in the form of

3 deposits or membership shares of $100,000 or

4 less, technical assistance, or grants for technical

5 assistance to be matched.

6 ‘‘(C) LEGALLY ENFORCEABLE COMMIT7 MENTS REQUIRED.—The Fund shall provide no

8 assistance except technical assistance or grants

9 for technical assistance until a qualified com10 munity development financial institution has se11 cured legally enforceable commitments for the

12 entire match required.

13 ‘‘(D) FORM OF PAYMENT.—Assistance

14 may be provided in one lump sum, or over a pe15 riod of time, as determined by the Fund.

16 ‘‘(3) MATCH REQUIREMENT.—Assistance shall

17 be matched with funds from sources other than the

18 Federal Government.

19 ‘‘(f) TERMS AND CONDITIONS.—

20 ‘‘(1) IN GENERAL.—The Fund shall provide as21 sistance authorized under this Act in such form and

22 subject to such restrictions as are necessary to en23 sure that to the maximum extent practicable—

24 ‘‘(A) all assistance granted is used by the

25 qualified community development financial in-
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1 stitution in a manner consistent with the pur2 poses of this Act;

3 ‘‘(B) qualified community development fi4 nancial institutions receiving assistance that are

5 not otherwise regulated by the Federal Govern6 ment or by a State government are financially

7 and managerially sound;

8 ‘‘(C) assistance results in a net increase,

9 both nationally and in the local communities in

10 which assistance is provided, in capital, credit,

11 and development services; and

12 ‘‘(D) assistance is provided in a manner

13 that encourages affiliations and partnerships

14 between insured depository institutions, second15 ary markets or other sources of credit or lever16 age and local organizations dedicated to com17 munity development.

18 ‘‘(2) CONSULTATION WITH BANKING REGU19 LATORS.—Prior to providing assistance to a quali20 fied insured community development financial insti21 tution, the Board should consult with the appro22 priate Federal banking agency or, in the case of an

23 insured credit union, the National Credit Union Ad24 ministration.

25 ‘‘(3) ASSISTANCE AGREEMENT.—
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1 ‘‘(A) RESTRICTIONS ON USE OF ASSIST2 ANCE.—The Board shall impose restrictions on

3 the use of assistance provided by the Fund

4 through the use of a stock purchase agreement,

5 share purchase agreement, or through a con6 tract entered into in consideration for the provi7 sion of assistance.

8 ‘‘(B) PERFORMANCE GOALS.—

9 ‘‘(i) IN GENERAL.—Any agreement or

10 contract relating to the provision of assist11 ance shall require the institution assisted

12 to comply with performance goals.

13 ‘‘(ii) NEGOTIATION OF GOALS.—The

14 performance goals shall be negotiated be15 tween the Board and each qualified com16 munity development financial institution

17 receiving assistance based upon the strate18 gic plan submitted pursuant to section

19 236(b)(5).

20 ‘‘(iii) RENEGOTIATION.—The perform21 ance goals may be renegotiated jointly as

22 appropriate, subject to subparagraph (C).

23 ‘‘(iv) DETERMINATION OF ACTIVITY

24 LEVELS.—Activity levels for insured com25 munity development financial institutions
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1 should be determined by the Board in con2 sultation with the appropriate Federal

3 banking agency or, in the case of an in4 sured credit union, with the National Cred5 it Union Administration.

6 ‘‘(C) SANCTIONS.—

7 ‘‘(i) IN GENERAL.—The agreement or

8 contract relating to the provision of assist9 ance shall specify sanctions available to the

10 Board, in the Board’s discretion, in the

11 event of noncompliance with the purposes

12 of the assistance or the terms of the agree13 ment.

14 ‘‘(ii) SANCTIONS AVAILABLE.—The

15 sanctions available for purposes of clause

16 (i) may include revocation of approval of

17 the application, terminating or reducing

18 future assistance, requiring repayment of

19 assistance, and requiring changes to the

20 performance goals imposed pursuant to

21 subparagraph (B) or to the strategic plan

22 submitted pursuant to section 236(b)(5).

23 ‘‘(iii) CONSULTATION WITH OTHER

24 AGENCIES.—In the case of an insured com25 munity development financial institution,
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1 the Board shall consult with the appro2 priate Federal banking agency or, in the

3 case of an insured credit union, the Na4 tional Credit Union Administration, before

5 imposing sanctions pursuant to this para6 graph.

7 ‘‘(4) REVIEW.—At least annually, the Board

8 shall review the performance of each assisted quali9 fied community development financial institution in

10 carrying out the applicant’s strategic plan and per11 formance goals.

12 ‘‘(5) REPORTING.—The Board shall require

13 each qualified community development financial in14 stitution receiving assistance to submit an annual

15 report to the Fund on the applicant’s activities, fi16 nancial condition, success in meeting performance

17 goals, and compliance with other requirements of

18 this Act.

19 ‘‘(g) AUTHORITY TO SELL EQUITY INVESTMENTS

20 AND LOANS.—The Board may—

21 ‘‘(1) sell any investments or loan asset held by

22 the Fund; and

23 ‘‘(2) in the Board’s discretion, retain the power

24 to enforce limitations on assistance entered into in

25 accordance with the requirements of this section.
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1 ‘‘(h) RULE OF CONSTRUCTION—No provision of this

2 Act shall be construed as affecting any authority of the

3 appropriate Federal banking agency or, in the case of an

4 insured credit union, the National Credit Union Adminis5 tration, to supervise and regulate an insured community

6 development financial institution.

7 ‘‘SEC. 239. RECORDKEEPING, REPORTS, AUDITS; AND IN8 VESTMENTS.

9 ‘‘(a) RECORDKEEPING.—

10 ‘‘(1) IN GENERAL.—A qualified community de11 velopment financial institution receiving assistance

12 from the Fund shall keep such records as may be

13 reasonably necessary to disclose the disposition of

14 any assistance under this Act and to ensure compli15 ance with the requirements of this Act.

16 ‘‘(2) FUND ACCESS TO RECORDS.—The Fund

17 shall have access, for the purpose of determining

18 compliance with this Act, to any books, documents,

19 papers, and records of a qualified community devel20 opment financial institution receiving assistance

21 from the Fund that are pertinent to assistance re22 ceived under this Act.

23 ‘‘(b) REPORTS.—

24 ‘‘(1) ANNUAL REPORT.—
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1 ‘‘(A) REPORT REQUIRED.—The Fund shall

2 conduct an annual evaluation of the activities

3 carried out pursuant to this Act and shall sub4 mit a report of its findings to the President

5 within 120 days of the end of each fiscal year

6 of the Fund.

7 ‘‘(B) CONTENTS.—The report shall include

8 financial statements audited in accordance with

9 subsection (c).

10 ‘‘(2) INSTITUTIONAL VOICE FOR COMMUNITY

11 DEVELOPMENT.—

12 ‘‘(A) ONGOING STUDY.—The fund shall

13 conduct, or cause to be conducted, an ongoing

14 study to identify and evaluate the most effective

15 and financially sound policies and practices for

16 encouraging investment in distressed commu17 nities, including small business and commercial

18 lending, business formation and expansion,

19 community and economic development, commer20 cial real estate and multifamily housing, and

21 home mortgages. In addition, the Fund may

22 study, or cause to be studied, related matters,

23 such as identification of sources of and access

24 to capital and loans for community investment;

25 development of secondary markets for economic
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1 and community development, small business

2 and commercial loans, and home mortgage

3 loans and investments; and methods to involve

4 all segments of the financial services industry in

5 community development.

6 ‘‘(B) CONSULTATION.—In the conduct of

7 the study, the Fund shall consult, or cause con8 sultation with, the Office of the Comptroller of

9 the Currency, the Federal Deposit Insurance

10 Corporation, the Board of Governors of the

11 Federal Reserve System, the Federal Housing

12 Finance Board, the Farm Credit Administra13 tion, the Office of Thrift Supervision, the Na14 tional Credit Union Administration, community

15 reinvestment, civil rights, consumer and finan16 cial organizations, and such representatives of

17 agencies or other persons as the Fund may de18 termine.

19 ‘‘(C) REPORTS.—

20 ‘‘(i) INITIAL REPORT.—Within 270

21 days after the date of enactment of the

22 Bank Enterprise Act Amendments of

23 1993, the Board shall report to the Presi24 dent its initial findings and recommenda-
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1 tions regarding the matters set forth in

2 subparagraph (A).

3 ‘‘(ii) SUBSEQUENT REPORTS.—After

4 the report required under clause (i), the

5 Board shall report its findings and rec6 ommendations to the President with the

7 annual report required by subsection

8 (b)(1).

9 ‘‘(3) INVESTMENT, GOVERNANCE, AND ROLE OF

10 FUND.—After the end of the 6-year period beginning

11 on the date of the enactment of the Bank Enterprise

12 Act Amendments of 1993, the Fund, in accordance

13 with the procedures described in subparagraphs (A)

14 and (B) of paragraph (2), shall conduct a study

15 evaluating the structure, governance, and perform16 ance of the Fund. The study shall be submitted to

17 the President. Such study shall include an evaluation

18 of the overall performance of the Fund in meeting

19 the purposes of this Act and any recommendations

20 of the Fund for restructuring the Board, altering

21 procedures under which the Fund is governed, the

22 future role of the Fund in addressing community de23 velopment, and the ability of the Fund to become a

24 private, self-sustaining entity capable of fulfilling the

25 purposes of this Act.
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1 ‘‘(c) INVESTMENT OF RECEIPTS AND PROCEEDS.—

2 ‘‘(1) PROCEEDS DEPOSITED IN FUND.—Any

3 dividends on equity investments and proceeds from

4 the disposition of investments, deposits, or member5 ship shares and interest payments and loan principal

6 repayments that are received by the Fund as a re7 sult of assistance provided pursuant to section 238

8 shall be deposited and accredited to the Fund.

9 ‘‘(2) INVESTMENTS OF AMOUNTS IN THE

10 FUND.—The Secretary of the Treasury shall invest

11 amounts deposited in such account in public debt se12 curities with maturities suitable to the needs of the

13 Fund and bearing interest at rates determined by

14 the Secretary of the Treasury, taking into consider15 ation current market yields on outstanding market16 able obligations of the United States of comparable

17 maturities.

18 ‘‘(3) AVAILABILITY OF AMOUNTS.—Amounts

19 deposited into the account and interest earned on

20 such amounts pursuant to this section shall be avail21 able to the Fund until expended.’’

22 (b) ADDITIONAL BOARD MEMBERS.—Section

23 233(d)(2) of the Bank Enterprise Act of 1991 (12 U.S.C.

24 1834a(d)(2)) is amended—
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1 (1) by striking ‘‘5 members’’ and inserting ‘‘7

2 members’’; and

3 (2) by redesignating subparagraph (D) as sub4 paragraph (F) and inserting after subparagraph (C)

5 the following new subparagraphs:

6 ‘‘(D) The Secretary of Agriculture.

7 ‘‘(E) The Administrator of the Small Busi8 ness Administration.’’.

9 (c) EFFECTIVE DATE OF REGULATIONS.—The

10 Board shall prescribe regulations necessary to implement

11 the amendments made by subsection (a) not later than

12 210 days after enactment of this Act.

13 (d) TECHNICAL AND CONFORMING AMENDMENT.—

14 Section 8E(a)(2) of the Inspector General Act of 1978 (5

15 U.S.C. App. 3, 8E(a)(2)) is amended by inserting ‘‘the

16 Community Enterprise Assessment Credit Board,’’ imme17 diately after ‘‘the Commodity Futures Trading Commis18 sion’’.

19 SEC. 102. CREDITS FOR NEWLY CHARTERED COMMUNITY

20 DEVELOPMENT BANKS.

21 (a) IN GENERAL.—Section 233(a) of the Bank En22 terprise Act of 1991 (12 U.S.C. 1834a(a)) is amended by

23 redesignating paragraphs (3), (4), (5), and (6) as para24 graphs (4), (5), (6), and (7) and by inserting after para25 graph (2) the following new paragraph:
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•HR 2707 IH

1 ‘‘(3) NEWLY CHARTERED COMMUNITY DEVEL2 OPMENT BANKS.—Notwithstanding paragraph (2),

3 any insured depository institution chartered as a

4 community development bank in accordance with the

5 requirements of section 234(b) of this Act shall be

6 eligible for any community enterprise assessment

7 credit for the 1st 6 semiannual periods which begin

8 after the date of the approval of the initial charter

9 of such insured depository institution by the appro10 priate Federal banking agency or State bank super11 visor.’’.

12 (b) CONFORMING AMENDMENT.—Section

13 233(a)(1)(B) of the Bank Enterprise Act of 1991 (12

14 U.S.C. 1834a(a)(1)(B)) is amended by striking ‘‘para15 graph (3)’’ and inserting ‘‘paragraph (4)’’.

16 SEC. 103. FINANCIAL SERVICES FOR DISTRESSED COMMU17 NITIES.

18 (a) BANK ENTERPRISE ACT.—The Bank Enterprise

19 Act of 1991 is amended by inserting after section 239 (as

20 added by section 101 of this title) the following new sec21 tion:

22 ‘‘SEC. 240. FINANCIAL SERVICES FOR DISTRESSED COMMU23 NITIES.

24 ‘‘(a) DISTRESSED COMMUNITIES LACKING INSUR25 ANCE SERVICES.—
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1 ‘‘(1) IN GENERAL.—With the approval of the

2 appropriate Federal banking agency and notwith3 standing any provision of the law of any State to the

4 contrary, any insured depository institution which is

5 located in (or maintains a full service branch located

6 in) a qualified distressed community may sell prop7 erty and casualty insurance, as agent or broker, to

8 the extent—

9 ‘‘(A) the insurance activities are confined

10 to that community; and

11 ‘‘(B) the insurance is sold only to residents

12 of the community or individuals employed with13 in such community.

14 ‘‘(2) CERTAIN ACTIVITIES PROHIBITED IN CON15 NECTION WITH INSURANCE ACTIVITIES.—No insured

16 depository institution which sells insurance pursuant

17 to paragraph (1) may—

18 ‘‘(A) assume or guarantee the payment of

19 any premium on any insurance policy issued

20 through the agency of the institution by the in21 surance company for which the institution is

22 acting as agent; or

23 ‘‘(B) guarantee the truth of any statement

24 made by an insurance customer in filing such

25 customer’s application for insurance.
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1 ‘‘(3) SHOWING OF UNAVAILABILITY OF INSUR2 ANCE SERVICES.—The appropriate Federal banking

3 agency may approve an application by an insured

4 depository institution to sell insurance under para5 graph (1) in any qualified distressed community only

6 if the institution provides sufficient evidence that the

7 availability of insurance agents providing competi8 tively priced products in the community is inad9 equate.

10 ‘‘(4) DEFINITIONS.—For purposes of this sub11 section—

12 ‘‘(A) APPROPRIATE FEDERAL BANKING

13 AGENCY.—The term ‘appropriate Federal bank14 ing agency’ has the meaning given to such term

15 in section 3(q) of the Federal Deposit Insur16 ance Act.

17 ‘‘(B) QUALIFIED DISTRESSED COMMU18 NITY.—The term ‘qualified distressed commu19 nity’ has the meaning given to such term in sec20 tion 233(b).’’.

21 (b) BANK ELIGIBLE SECURITIES.—The clause des22 ignated the ‘‘Seventh’’ of section 5136 of the Revised Stat23 utes (12 U.S.C. 24) is amended by adding at the end the

24 following new sentence: ‘‘Subject to the approval of the

25 appropriate Federal banking agency (as defined in section
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•HR 2707 IH

1 3(q) of the Federal Deposit Insurance Act, and to such

2 limitations as may be prescribed by regulation, any well

3 capitalized national bank which is located in (or maintains

4 a full service branch located in) a qualified distressed com5 munity (as defined in section 233(b) of the Bank Enter6 prise Act of 1991) may purchase for its own account, deal

7 in, or underwrite securities issued by any small business

8 located in such community.’’.

9 (c) SAVINGS ASSOCIATIONS.—Section 5(c)(1) of the

10 Home Owners’ Loan Act (12 U.S.C. 1464(c)(1)) (as pre11 viously amended herein) is amended by inserting at the

12 end the following:

13 ‘‘(T) THRIFT ELIGIBLE SECURITIES.—

14 Subject to the approval of the Director and to

15 such limits as may be prescribed by regulation,

16 any well capitalized savings association which is

17 located in (or maintains a full service branch lo18 cated in) a qualified distressed community (as

19 defined in section 233(b) of the Bank Enter20 prise Act of 1991) may purchase for its own ac21 count, deal in, or underwrite securities issued

22 by any small business located in such commu23 nity.’’.
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1 SEC. 104. BANK ENTERPRISE ACT ENHANCEMENTS.

2 (a) QUALIFIED DISTRESSED COMMUNITIES.—Sec3 tion 233(b)(1)(B) of the Bank Enterprise Act of 1991 is

4 amended to read as follows:

5 ‘‘(B) is designated as a distressed commu6 nity by—

7 ‘‘(i) the Board; or

8 ‘‘(ii) any insured depository institu9 tion in accordance with paragraph (2) if

10 such designation by an insured depository

11 institution is not disapproved by the appro12 priate Federal banking agency under such

13 paragraph.’’

14 (b) RURAL DISTRESSED AREAS.—Section 233(b) of

15 the Bank Enterprise Act of 1991 is amended by inserting

16 at the end the following:

17 ‘‘(5) QUALIFIED DISTRESSED RURAL AREAS.—

18 ‘‘(A) IN GENERAL.—Notwithstanding para19 graph (4), the Board shall establish independ20 ent criteria for a distressed rural area to be eli21 gible as a qualified distressed community under

22 this subsection.

23 ‘‘(B) FACTORS.—In establishing the cri24 teria for a distressed rural area to be eligible as

25 a ‘qualified distressed community’ under this
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1 subsection, the factors considered by the Board

2 shall include the following factors:

3 ‘‘(i) Population (as determined by the

4 most recent census data available).

5 ‘‘(ii) State of distress.

6 ‘‘(iii) Size.

7 ‘‘(iv) Unemployment rate.

8 ‘‘(v) Poverty rate.

9 ‘‘(vi) Job loss.

10 ‘‘(vii) Out-migration.’’.

11 (c) EXPANDED QUALIFIED LOANS AND FINANCIAL

12 ASSISTANCE.—Section 233(a)(4) of the Bank Enterprise

13 Act of 1991 is amended by inserting at the end the follow14 ing new subparagraphs:

15 ‘‘(L) Extensions of credit to small busi16 nesses located within a qualified distressed com17 munity.

18 ‘‘(M) Consumer education programs either

19 sponsored or offered by insured depository in20 stitutions that provide assistance to residents of

21 qualified distressed communities in managing

22 their personal finances.

23 ‘‘(N) Technical assistance and consulting

24 services to newly formed small businesses lo25 cated in qualified distressed communities.
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1 ‘‘(O) Technical assistance to, or servicing

2 the loans of, low- or moderate-income home3 owners, and homeowners located in qualified

4 distressed communities.

5 ‘‘(P) Extensions of credit for activities

6 which qualify for advances from a Federal home

7 loan bank under a community investment pro8 gram established by the bank pursuant to sec9 tion 10(i) of the Federal Home Loan Bank

10 Act.’’

11 (d) PRIORITY OF FUNDING.—Section 233 of the

12 Bank Enterprise Act of 1991 is amended by redesignating

13 subsection (g) as subsection (h) and inserting after sub14 section (f) the following new subsection:

15 ‘‘(g) PRIORITY OF FUNDING.—In allocating funds for

16 the implementation of this section, the Board shall grant

17 a priority to qualified distressed communities designated

18 by the Board pursuant to section 233(b)(1)(B) and no less

19 than 25 percent of the funds authorized and appropriated

20 for the implementation of this section shall be allocated

21 by the Board to distressed rural areas that are determined

22 to be qualified distressed communities pursuant to section

23 233(b)(5).’’.

24 (e) COMMUNITY DEVELOPMENT ORGANIZATIONS.—

25 Section 234(e) of the Bank Enterprise Act of 1991 is
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1 amended by striking ‘‘institution,’’ and inserting ‘‘institu2 tion, nonprofit microloan lending organization licensed by

3 the Small Business Administration, development company

4 certified by the Small Business Administration, commu5 nity development financial institution,’’.

6 (f) NONPROFIT, PRIVATE, COMMUNITY DEVELOP7 MENT CORPORATIONS—

8 (1) IN GENERAL.—Section 234(a)(1) of the

9 Bank Enterprise Act of 1991 (12 U.S.C.

10 1834b(a)(1)) is amended—

11 (A) by striking ‘‘or’’ at the end of subpara12 graph (C);

13 (B) by inserting ‘‘or’’ after the semicolon

14 at the end of subparagraph (D); and

15 (C) by adding at the end the following new

16 subparagraph:

17 ‘‘(E) invests in a nonprofit, private, com18 munity development corporation;’’.

19 (2) NONPROFIT, PRIVATE, COMMUNITY DEVEL20 OPMENT CORPORATION REQUIREMENTS.—Section

21 234 of the Bank Enterprise Act of 1991 (12 U.S.C.

22 1834b) is amended by adding at the end the follow23 ing new subsection:

24 ‘‘(f) NONPROFIT, PRIVATE, COMMUNITY DE25 VELOPMENT CORPORATION REQUIREMENTS.—
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1 ‘‘(1) IN GENERAL.—A private, nonprofit, com2 munity development corporation meets the require3 ment of this subsection if the corporation satisfies

4 the selection criteria and the performance require5 ments which the Board shall establish and admin6 ister.

7 ‘‘(2) PERFORMANCE REQUIREMENTS.—The per8 formance requirements established pursuant to para9 graph (1) shall include the following:

10 ‘‘(A) The corporation has received funding

11 from a Federal agency or department.

12 ‘‘(B) The lending and investments of the

13 corporation have been regulated by the Federal

14 agency providing the funding.

15 ‘‘(C) The corporation has satisfactorily met

16 the conditions of the funding.

17 ‘‘(D) The corporation has submitted an18 nual audits or other reports required by the

19 agency providing the funding.’’.

20 (3) DEFINITION OF NONPROFIT, PRIVATE, COM21 MUNITY DEVELOPMENT CORPORATION.—Section

22 234(e) of the Bank Enterprise Act of 1991 (12

23 U.S.C. 1834b(e)) is amended by adding at the end

24 the following new paragraph:
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1 ‘‘(6) NONPROFIT, PRIVATE, COMMUNITY DE2 VELOPMENT CORPORATION REQUIREMENTS.—The

3 term ‘private, nonprofit, community development

4 corporation’ means a private, locally-initiated, non5 profit corporation (or a private nonprofit affiliate of

6 such a corporation) which—

7 ‘‘(A) meets the requirements of subsection

8 (f);

9 ‘‘(B) is governed by a board consisting of

10 residents and business and civic leaders of the

11 community; and

12 ‘‘(C) sponsors enterprises which provide

13 employment, housing, and business development

14 opportunities for low- and moderate-income

15 residents of a qualified distressed community

16 and are designed to increase employment, hous17 ing, and business opportunities in such commu18 nity.’’.

19 TITLE II—BANK COMMUNITY

20 DEVELOPMENT INCENTIVES

21 SEC. 201. CRA CREDIT FOR COMMUNITY INVESTMENTS.

22 (a) CRA CREDIT FOR COMMUNITY LENDING ACTIVI23 TIES.—The Community Reinvestment Act of 1977 (12

24 U.S.C. 2901 et seq.) is amended by adding at the end

25 the following new section:
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1 ‘‘SEC. 809. PERFORMANCE RATING STANDARDS FOR CRA

2 CREDIT.

3 ‘‘(a) PERFORMANCE RATING STANDARDS RE4 QUIRED.—

5 ‘‘(1) IN GENERAL.—Not later than 1 year after

6 the date of enactment of the Bank Enterprise Act

7 Amendments of 1993, the Financial Institutions Ex8 amination Council, in consultation with the Commu9 nity Enterprise Assessment Credit Board, individ10 uals representing regulated financial institutions,

11 consumers, community groups, and other interested

12 parties, shall establish performance rating standards

13 to assess the record of a regulated financial institu14 tion in meeting the credit needs of the institution’s

15 community, including low- and moderate-income

16 neighborhoods, for purposes of this title.

17 ‘‘(2) RATING METHODOLOGY.—The perform18 ance rating standards shall require—

19 ‘‘(A) a quantitative analysis of objective,

20 quantitative data which shall be used to meas21 ure the extent to which a regulated financial in22 stitution is committing financial and managerial

23 resources to community reinvestment activities

24 in relation to the institution’s total amount of

25 deposit liabilities; and
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1 ‘‘(B) a qualitative analysis of subjective

2 factors which the Financial Institutions Exam3 ination Council determines are appropriate in

4 assessing a regulated financial institution for

5 purposes of this title, including the following

6 factors:

7 ‘‘(i) The regulated financial institu8 tion’s asset size and service area.

9 ‘‘(ii) Access to Federal programs.

10 ‘‘(iii) Economic conditions in the insti11 tution’s service area.

12 ‘‘(iv) Legal impediments.

13 ‘‘(v) The unique nature of any com14 munity reinvestment activity of the regu15 lated financial institution which may not

16 be accurately or adequately reflected in

17 amount of the institution’s investments.

18 ‘‘(vi) The community reinvestment ac19 tivities of any affiliate (as defined in sec20 tion 2(k) of the Bank Holding Company

21 Act of 1956) of the institution which is not

22 a regulated financial institution to the ex23 tent the consideration of such affiliate is

24 appropriate in assessing the community re25 investment activities of the institution.
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1 ‘‘(vii) Any additional factors that rea2 sonably bear upon the institution’s ability

3 to meet the credit needs of the institution’s

4 service area, including low- and moderate5 income neighborhoods.

6 ‘‘(3) QUALIFIED INVESTMENTS AND ACTIVI7 TIES.—

8 ‘‘(A) IN GENERAL.—The Financial Institu9 tions Examination Council shall compile a list

10 of activities and investments which qualify as

11 community reinvestment activities for purposes

12 of this title and the relative weight which shall

13 be accorded to each type or category of such in14 vestment activities for purposes of paragraph

15 (2)(A).

16 ‘‘(B) CERTAIN ACTIVITIES AND INVEST17 MENTS INCLUDED.—The following activities

18 and investments shall qualify as community re19 investment activities for purposes of this title:

20 ‘‘(i) Any activity or investment of a

21 regulated financial institution which is

22 treated as a qualifying activity or invest23 ment under section 233(a) of the Bank

24 Enterprise Act of 1991 for purposes of

25 such Act.
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1 ‘‘(ii) Any activity of a regulated finan2 cial institution which involves providing

3 lifeline accounts (as defined in section

4 232(a) of the Bank Enterprise Act of

5 1991).

6 ‘‘(iii) Any investment which—

7 ‘‘(I) is made by a regulated fi8 nancial institution or an affiliate of

9 any such institution in a community

10 development bank, community devel11 opment corporation, community devel12 opment credit union, or small business

13 investment corporation operating in

14 the regulated financial institution’s

15 delineated community; and

16 ‘‘(II) is consistent with safe and

17 sound banking practices.

18 ‘‘(4) PREINVESTMENT OPINION.—

19 ‘‘(A) PROCEDURES REQUIRED.—The Fi20 nancial Institutions Examination Council shall

21 establish procedures under which a regulated fi22 nancial institution can obtain a written opinion

23 of the appropriate Federal supervisory agency

24 on the qualification of a proposed activity or in-
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1 vestment as a community reinvestment activity

2 for purposes of this title.

3 ‘‘(B) TIMELY OPINION REQUIRED.—In the

4 case of a request for an opinion under the pro5 cedures established pursuant to subparagraph

6 (A) with respect to a proposed activity or in7 vestment, the appropriate Federal financial su8 pervisory agency shall provide a written opinion

9 on whether such activity or investment may be

10 treated as a qualified community reinvestment

11 activity within 3 business days of the receipt of

12 the request.

13 ‘‘(b) REGULATIONS TO INCLUDE STANDARDS.—Each

14 appropriate Federal financial supervisory agency shall in15 clude the standards established under subsection (a) in the

16 regulations prescribed by the agency pursuant to this title.

17 ‘‘(c) ASSIGNED RATINGS.—The Federal financial su18 pervisory agencies shall base the assigned ratings required

19 under section 807(b)(2) on the standards established pur20 suant to subsection (a).’’.

21 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

22 Section 808(a) of the Community Reinvestment Act of

23 1977 (12 U.S.C. 2907(a)) is amended by striking ‘‘may

24 be a factor’’ and inserting ‘‘shall be considered and given

25 credit’’.
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1 SEC. 202. CRA COMPLIANCE AND COMMUNITY DEVELOP2 MENT INVESTMENT ACTIVITIES.

3 (a) IN GENERAL.—Section 804 of the Community

4 Reinvestment Act of 1977 (12 U.S.C. 2903) is amended—

5 (1) by striking ‘‘In connection with’’ and insert6 ing ‘‘(a) IN GENERAL.—Subject to subsection (b), in

7 connection with’’; and

8 (2) by adding at the end the following new sub9 sections:

10 ‘‘(b) SAFE HARBOR FOR INSTITUTIONS WITH OUT11 STANDING RATINGS.—Notwithstanding subsection (a)(2),

12 an application for a deposit facility by a regulated finan13 cial institution in any year shall not be denied on the basis

14 of such institution’s compliance with this Act if such insti15 tution has received a 1 rating under section 807 in each

16 of the 3 years preceding such year.

17 ‘‘(c) DETERMINATION OF SERVICE AREA.—

18 ‘‘(1) CRITERIA AND PROCEDURES.—The Finan19 cial Institutions Examination Council shall establish

20 criteria and procedures for delineating the service

21 area of a regulated financial institution on the basis

22 of existing market conditions and local credit needs,

23 including the credit needs of low- and moderate-in24 come neighborhoods.

25 ‘‘(2) USE OF CRITERIA AND PROCEDURES.—

26 The delineation of the service area of a regulated fi-
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1 nancial institution by the appropriate Federal finan2 cial supervisory agency for purposes of this title

3 shall be made in accordance with the criteria and

4 procedures established under paragraph (1).

5 ‘‘(3) RULE OF CONSTRUCTION.—Any reference

6 in this title to a regulated financial institution’s

7 community shall be considered to be a reference to

8 the service area delineated for such bank under this

9 subsection.’’.

10 ‘‘(b) TECHNICAL AND CONFORMING AMEND11 MENTS.—Section 803 of the Community Reinvestment

12 Act is amended by inserting at the end the following:

13 ‘‘(5) DEPOSITORY INSTITUTION HOLDING COM14 PANY.—The term ‘depository institution holding

15 company’ has the same meaning given such term as

16 in section 3(w)(1) of the Federal Deposit Insurance

17 Act (12 U.S.C. 1813(w)(1)).

18 ‘‘(6) COMMUNITY DEVELOPMENT ORGANIZA19 TION, COMMUNITY DEVELOPMENT BANK, AND COM20 MUNITY DEVELOPMENT CORPORATION.—The terms

21 ‘community development organization’, ‘community

22 development bank’, and ‘community development

23 corporation’ have the meaning given to such terms

24 in section 234 of the Bank Enterprise Act of 1991.
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1 ‘‘(7) COMMUNITY DEVELOPMENT CREDIT

2 UNION.—The term ‘community development credit

3 union’ has the same meaning given such term as in

4 section 101(1) of the Federal Credit Union Act.’’.

5 SEC. 203. COMMUNITY COMMENTS; REVIEW PROCEDURE.

6 ‘‘(a) IN GENERAL.—Section 809 of the Community

7 Reinvestment Act of 1977 (12 U.S.C. 2906) (as added by

8 section 201 of this Act) is amended by adding at the end

9 the following new subsections:

10 ‘‘(d) COMMUNITY COMMENTS ON PERFORMANCE

11 RATING STANDARDS.—

12 ‘‘(1) NOTICE OF OPPORTUNITY REQUIRED.—

13 Before making any final determination with respect

14 to the proposed treatment of any activity or invest15 ment as a qualified community reinvestment, the Fi16 nancial Institutions Examination Council shall pub17 lish a notice in the Federal Register soliciting the

18 comments of any community group or other inter19 ested person.

20 ‘‘(2) COMMENTS CONSIDERED.—In making the

21 determination described in paragraph (1), the Fi22 nancial Institutions Examination Council shall con23 sider comments received pursuant to any solicitation

24 of comments under this subsection.’’.
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1 (b) REVIEW PROCEDURE FOR WRITTEN EVALUA2 TIONS.—

3 (1) IN GENERAL.—Section 807 of the Commu4 nity Reinvestment Act of 1977 (12 U.S.C. 2906) is

5 amended by adding at the end the following new

6 subsection:

7 ‘‘(d) REVIEW PROCEDURE.—

8 ‘‘(1) NOTICE.—Each appropriate Federal finan9 cial supervisory agency shall notify a regulated fi10 nancial institution of the completion of an evaluation

11 of the institution under subsection (a).

12 ‘‘(2) HEARING.—Any regulated financial insti13 tution may request a hearing for agency review, in

14 accordance with chapter 5 of title 5, United States

15 Code, of any evaluation prepared under this section

16 before the end of the 14-day period beginning on the

17 date the institution receives notice under paragraph

18 (1).’’.

19 (2) TECHNICAL AND CONFORMING AMEND20 MENTS.—Section 807(b)(2) of the Community Rein21 vestment Act of 1977 (12 U.S.C. 2906(b)(2)) is

22 amended—

23 (A) in subparagraph (A), by striking ‘‘Out24 standing’’ and inserting ‘‘1, if the institution

25 has an outstanding’’;
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1 (B) in subparagraph (B), by striking ‘‘Sat2 isfactory’’ and inserting ‘‘2, if the institution

3 has a satisfactory’’;

4 (C) in subparagraph (C), by striking

5 ‘‘Needs to improve’’ and inserting ‘‘3, if the in6 stitution needs to improve its’’;

7 (D) in subparagraph (D), by striking

8 ‘‘Substantial noncompliance’’ and inserting ‘‘4,

9 if the institution is in substantial noncompli10 ance’’; and

11 (E) by striking the closing quotation

12 marks before the period at the end of subpara13 graphs (A), (B), (C), and (D).

14 SEC. 204. EXPEDITED PROCEDURES FOR COMMUNITY DE15 VELOPMENT CORPORATIONS.

16 Section 4 of the Bank Holding Company Act of 1956

17 (12 U.S.C. 1843) is amended by inserting at the end the

18 following new subsection:

19 ‘‘(j) NOTICE PROCEDURES FOR COMMUNITY DEVEL20 OPMENT CORPORATION ACTIVITIES.—

21 ‘‘(1) GENERAL NOTICE PROCEDURE.—No bank

22 holding company may acquire or retain ownership or

23 control of the shares of a community development

24 corporation as authorized pursuant to subsection (c)

25 of this section unless the company submits a written
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1 notice of the proposed transaction or expansion not

2 less than 30 days before the date the proposed

3 transaction or expansion commences.

4 ‘‘(2) CONTENTS OF NOTICE.—The notice sub5 mitted to the Board shall contain such information

6 as the Board shall prescribe by regulation or by spe7 cific request in connection with a particular notice.

8 ‘‘(3) PROCEDURE FOR AGENCY ACTION.—A no9 tice filed under this subsection shall be deemed to be

10 approved by the Board unless, before the end of the

11 30-day period beginning on the date of the receipt

12 of a complete notice, the Board issues an order set13 ting forth the reasons for disapproval.

14 ‘‘(4) WAIVER.—Any activity of a community de15 velopment corporation authorized under subsection

16 (c) and subject to paragraph (1), may proceed prior

17 to the expiration of the disapproval period if the

18 Board issues a written notice of approval.

19 ‘‘(5) SHORTER PERIOD.—The Board may pro20 vide for a shorter period of time for notice under

21 this subsection if such action would produce benefits

22 to the public without adversely affecting the safety

23 and soundness of insured depository institutions.’’.
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1 SEC. 205. COMMUNITY DEVELOPMENT INVESTMENT AC2 COUNTS.

3 (a) NATIONAL BANKS.—Section 5136 of the Revised

4 Statutes of the United States (12 U.S.C. 24) is amended

5 by inserting at the end the following:

6 ‘‘Twelfth. Notwithstanding any other provision of

7 law, to organize, sponsor or underwrite securities issued

8 by companies that are registered as investment companies

9 under the Investment Company Act of 1940 to the extent

10 that such investment companies invest and trade only in

11 securities issued by companies located and primarily doing

12 business in qualified distressed communities as defined in

13 section 233(b) of the Bank Enterprise Act of 1991.’’.

14 (b) SAVINGS ASSOCIATIONS.—Section 5(c)(1) of the

15 Home Owners’ Loan Act (12 U.S.C. 1464(c)(1)) is

16 amended by inserting at the end the following:

17 ‘‘(S) COMMUNITY DEVELOPMENT INVESTMENT

18 ACCOUNTS.—Notwithstanding any other provision of

19 law, to organize, sponsor or underwrite securities is20 sued by companies that are registered as investment

21 companies under the Investment Company Act of

22 1940 to the extent that such investment companies

23 invest and trade only in securities issued by compa24 nies located and primarily doing business in quali25 fied distressed communities as defined in section

26 233(b) of the Bank Enterprise Act of 1991.’’.
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1 SEC. 206. ENHANCED PASSIVE INVESTMENTS AUTHORIZED

2 FOR COMMUNITY DEVELOPMENT ACTIVITIES.

3 (a) IN GENERAL.—Section 4(c) of the Bank Holding

4 Company Act of 1956 (12 U.S.C. 1843(c)) is amended

5 by adding the following paragraph:

6 ‘‘(15) shares of any company located and pri7 marily doing business in a qualified distressed com8 munity as defined in section 233(b) of the Bank En9 terprise Act of 1991 to the extent that—

10 ‘‘(A) the total amount of the shares of

11 such company acquired or retained in accord12 ance with this paragraph (by the bank holding

13 company and any subsidiary of the bank hold14 ing company) does not exceed 25 percent of the

15 outstanding voting shares of the company;

16 ‘‘(B) the company is not under the oper17 ational control, directly or indirectly, of the

18 bank holding company;

19 ‘‘(C) the company does not engage in real

20 estate or real estate related activities not per21 missible for a national bank; and

22 ‘‘(D) the Board has been given notice by

23 the bank holding company of its intent to ac24 quire or retain the shares of such company in

25 accordance with this paragraph and has not

26 disapproved the acquisition within 45 days
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1 based on a finding that such acquisition or re2 tention of shares would adversely affect the

3 safety and soundness of insured depository in4 stitution affiliates.’’.

5 (b) CONFORMING AMENDMENT.—Section 2(a)(3) of

6 the Bank Holding Company Act of 1956 (12 U.S.C.

7 1841(a)) is amended by redesignating paragraphs (4), (5),

8 and (6) as paragraphs (5), (6), and (7), respectively, and

9 by inserting after paragraph (3) the following new para10 graph:

11 ‘‘(4) For the purpose of any proceeding under para12 graph (2)(C) or to which paragraph (5) applies, there shall

13 be a presumption that any company which owns, controls,

14 or has the power to vote not more than 25 percent of any

15 class of voting stock of any company as authorized by,

16 and in conformity with, section 4(c)(15) of this Act does

17 not control such company.’’.

18 SEC. 207. AWARDS PROGRAM.

19 The Financial Institutions Examination Council shall

20 establish an annual awards program to publicly recognize

21 tangible examples of outstanding efforts by insured depos22 itory institutions to meet the credit needs of their commu23 nities.
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1 SEC. 208. QUALIFIED STOCK ISSUANCES FOR MINORITY

2 THRIFTS.

3 Section 10(q) of the Home Owners’ Loan Act (12

4 U.S.C. 1467a(q)) is amended—

5 (1) by striking ‘‘undercapitalized’’ each place

6 such term appears and inserting ‘‘eligible’’;

7 (2) in paragraph (1)(F), by striking ‘‘has cap8 ital’’ and all that follows through the period and in9 serting ‘‘is adequately capitalized as determined

10 under section 38 of the Federal Deposit Insurance

11 Act.’’;

12 (3) in paragraph (1)(G), by striking ‘‘not more

13 than 15’’ and inserting ‘‘less than 25’’; and

14 (4) by striking subparagraphs (A) and (B) of

15 paragraph (4) and inserting the following new sub16 paragraphs:

17 ‘‘(A) that is undercapitalized (as deter18 mined under section 38 of the Federal Deposit

19 Insurance Act); or

20 ‘‘(B) that is a minority depository institu21 tion (as defined in section 308(b) of Financial

22 Institutions Reform, Recovery, and Enforce23 ment Act of 1989).’’.
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1 TITLE III—HOUSING AND SMALL

2 BUSINESS FINANCE

3 SEC. 301. MEETING UNMET HOUSING AND COMMUNITY

4 CREDIT NEEDS THROUGH THE FEDERAL

5 HOME LOAN BANK SYSTEM.

6 Section 10 of the Federal Home Loan Bank Act (12

7 U.S.C. 1430) is amended by adding at the end the follow8 ing new subsection:

9 ‘‘(k) MEETING UNMET HOUSING AND COMMUNITY

10 DEVELOPMENT NEEDS.—

11 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

12 the Federal home loan banks may establish pro13 grams and engage in activities to meet housing fi14 nance and community development needs in quali15 fied distressed communities that cannot be met or

16 are not being met by the private sector of the econ17 omy.

18 ‘‘(2) NOTICE PROCEDURES.—

19 ‘‘(A) NOTICE REQUIREMENT.—A Federal

20 home loan bank may not engage in any new

21 program or activity under paragraph (1) with22 out providing the Board with written notice of

23 the proposed program or activity at least 30

24 days before the program or activity is proposed

25 to commence.
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1 ‘‘(B) NOTICE OF DISAPPROVAL.—Any no2 tice filed under this subsection shall be deemed

3 to be approved by the Board unless, before the

4 end of the 30-day period beginning on the date

5 the Board receives a notice under subparagraph

6 (A), the Board issues an order disapproving the

7 program or activity and setting forth the rea8 sons for disapproval.

9 ‘‘(C) APPROVAL BEFORE END OF PE10 RIOD.—

11 ‘‘(i) IN GENERAL.—Any transaction

12 or activity may commence before the expi13 ration of any period for disapproval estab14 lished under this paragraph if the Board

15 issues a written notice of approval.

16 ‘‘(ii) SHORTER PERIODS BY REGULA17 TION.—The Board may prescribe regula18 tions which provide for no notice under

19 this paragraph or for a shorter notice pe20 riod with respect to particular programs or

21 activities.’’.

22 SEC. 302. GOVERNMENT SPONSORED ENTERPRISE PUR23 CHASE GOALS.

24 (a) LOW- AND MODERATE-INCOME HOUSING

25 GOALS.—Section 1332(a) of the Federal Housing Enter-
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1 prises Financial Safety and Soundness Act of 1992 is

2 amended by adding at the end the following new sentence:

3 ‘‘The Secretary shall establish a separate specific goal

4 under this section for the purchase by each enterprise of

5 mortgages originated by community development organi6 zations as such term is described in section 234 of the

7 Bank Enterprise Act of 1991.’’.

8 (b) SPECIAL AFFORDABLE HOUSING GOALS.—Sec9 tion 1333(a) of the Federal Housing Enterprises Finan10 cial Safety and Soundness Act of 1992 is amended by add11 ing at the end the following new sentence: ‘‘The Secretary

12 shall establish a separate specific goal under this section

13 for the purchase by each enterprise of mortgages origi14 nated by community development organizations as such

15 term is described in section 234 of the Bank Enterprise

16 Act of 1991.’’.

17 (c) HOUSING GOALS FOR UNDERSERVED AREAS.—

18 Section 1334(a) of the Federal Housing Enterprises Fi19 nancial Safety and Soundness Act of 1992 is amended by

20 adding at the end the following new sentence: ‘‘The Sec21 retary shall establish a separate specific goal under this

22 section for the purchase by each enterprise of mortgages

23 originated by community development organizations as

24 such term is described in section 234 of the Bank Enter25 prise Act of 1991.’’.
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1 (d) ADDITIONAL REQUIREMENTS.—Section 1335 of

2 the Federal Housing Enterprises Financial Safety and

3 Soundness Act of 1992 is amended—

4 (1) by striking ‘‘and’’ at the end of paragraph

5 (3);

6 (2) by striking the period at the end of para7 graph (4) and inserting in lieu thereof ‘‘; and’’; and

8 (3) by inserting at the end the following new

9 paragraph:

10 ‘‘(5) assist community development organiza11 tions (as such term is described in section 234 of the

12 Bank Enterprise Act of 1991) to develop the institu13 tional capacity to assist low- and moderate-income

14 families with the purchase of their first home.’’.

15 SEC. 303. QUALIFIED THRIFT LENDER TEST.

16 Section 10(m)(4)(C)(ii) of the Home Owners’ Loan

17 Act (12 U.S.C. 1467a(m)(4)(C)(ii)) is amended by insert18 ing at the end the following subclause:

19 ‘‘(VII) Loans or extensions of

20 credit for the purchase, improvement,

21 or construction of churches, schools,

22 nursing homes or hospitals located

23 within, and loans or extensions of

24 credit for any purposes to any small

25 businesses located within, a qualified
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1 distressed community as defined in

2 section 233(b) of the Bank Enterprise

3 Act of 1991.’’.

4 SEC. 304. MICROLOAN GUARANTEE DEMONSTRATION PRO5 GRAM.

6 (a) PURPOSES.—Section 7(m)(1)(A)(iii) of the Small

7 Business Act is amended by redesignating subclauses (II),

8 (III), and (IV) as subclauses (III), (IV), and (V), respec9 tively, and inserting after subclause (I) the following new

10 subclause (II):

11 ‘‘(II) to establish a model pro12 gram to determine the feasibility of

13 developing a private secondary market

14 for loans guaranteed under this sub15 section to enhance the availability of

16 credit to small business concerns for

17 working capital or the acquisition of

18 material, supplies, or equipment.’’.

19 (b) ESTABLISHMENT.—Section 7(m)(1)(B) of the

20 Small Business Act is amended by striking out ‘‘direct

21 loans’’ in clause (i), and inserting in lieu thereof the fol22 lowing: ‘‘loans (either directly or through agreements to

23 participate on a guaranteed basis)’’;

24 (c) ELIGIBILITY FOR PARTICIPATION.—Section

25 7(m)(2)(B) of the Small Business Act is amended—
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1 (1) in subparagraph (A), by striking ‘‘(10)’’

2 and inserting in lieu thereof ‘‘(12)’’; and

3 (2) in subparagraph (B), by striking the period

4 at the end and inserting in lieu thereof the following:

5 ‘‘or has demonstrated to the satisfaction of the Ad6 ministration a commitment to establish a microloan

7 program that includes intensive marketing, manage8 ment, and technical assistance to its borrowers.’’.

9 (d) TERMS AND CONDITIONS.—Section 7(m)(3)(F)

10 of the Small Business Act is amended by adding the fol11 lowing new clause after clause (v):

12 ‘‘(vi) Notwithstanding any other re13 quirement of this subparagraph, the Ad14 ministration may provide such terms and

15 conditions, including interest rate require16 ments and percentage of guarantee but not

17 less than 90 percent, as it deems appro18 priate for purposes of making loan guaran19 tees under this subsection.’’.

20 (e) PORTFOLIO REQUIREMENT.—Section 7(m)(6)(B)

21 of the Small Business Act is amended by inserting after

22 ‘‘practicable’’ the following: ‘‘and except as provided by

23 the Administration with regard to loan guarantees made

24 under this subsection’’.
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1 (f) MODEL PROGRAM TO ESTABLISH A SECONDARY

2 MARKET FOR GUARANTEED LOANS.—Section 7(m) of the

3 Small Business Act is amended by redesignating para4 graphs (10) and (11) as paragraphs (11) and (12), respec5 tively, and by inserting after paragraph (9) the following

6 new paragraph (10):

7 ‘‘(10) MODEL PROGRAM FOR ESTABLISHING A

8 SECONDARY MARKET FOR GUARANTEED LOANS.—

9 The Administration is authorized to establish a

10 model program to determine the feasibility of devel11 oping a private secondary market for loans guaran12 teed under this subsection (including the guarantee13 ing of locally originated loan pools) to enhance the

14 availability of credit to small business concerns for

15 working capital or the acquisition of material, sup16 plies, or equipment.’’.

17 (g) REPORT TO CONGRESS.—Section 7(m)(11) of the

18 Small Business act (as redesignated by this section) is

19 amended—

20 (1) in subparagraph (F), by striking ‘‘and’’

21 after the semicolon; and

22 (2) redesignating subparagraph (G) as subpara23 graph (H), and inserting after subparagraph (F) the

24 following new subparagraph (G):
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1 ‘‘(G) a description of the loan guarantee

2 program, including the extent to which credit

3 may be made available to small businesses

4 through a private secondary market for small

5 business loan guarantees and the cost to the

6 Federal Government for making such guaran7 tees available; and’’.

8 (h) DEFINITIONS.—Section 7(m)(12) of the Small

9 Businesses Act (as redesignated by this section) is amend10 ed—

11 (1) in clause (iii), by striking ‘‘or’’ after the

12 semicolon;

13 (2) by inserting after clause (iv), the following:

14 ‘‘(v) any insured depository institution

15 (as such term is defined in section 3(c)(2)

16 of the Federal Deposit Insurance Act);

17 ‘‘(vi) any insured credit union (as

18 such term is defined in section 101(7) of

19 the Federal Credit Union Act); or

20 ‘‘(vii) any community development or21 ganization (as such term is described in

22 section 234 of the Bank Enterprise Act of

23 1991).’’.
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1 TITLE IV—CREDIT UNION

2 AMENDMENTS

3 SEC. 401. COMMUNITY DEVELOPMENT CREDIT UNIONS.

4 (a) Section 101(5) of the Federal Credit Union Act

5 (12 U.S.C. 1752(5)) is amended by striking ‘‘in the case

6 of a credit union serving predominantly low-income mem7 bers (as defined by the Board)’’ and inserting ‘‘in the case

8 of a community development credit union as defined in

9 subsection (10)’’.

10 (b) Section 101 of the Federal Credit Union Act (12

11 U.S.C. 1752) is amended by adding at the end the follow12 ing:

13 ‘‘(10) In determining whether a State or Fed14 eral credit union may be treated as a community de15 velopment credit union for purposes of this Act and

16 the Community Development Credit Union Revolv17 ing Loan Fund Transfer Act, the Board may con18 sider whether the institution—

19 ‘‘(A) serves predominantly members whose

20 median household incomes are below 80 percent

21 of the national median, or who make less than

22 80 percent of the average for all wage earners

23 as established by the Bureau of Labor Statis24 tics; or
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1 ‘‘(B) serves predominately low- and mod2 erate-income minorities.’’.

3 SEC. 402. COMMUNITY DEVELOPMENT REVOLVING LOAN

4 FUND AND TECHNICAL ASSISTANCE.

5 (a) Section 120 of the Federal Credit Union Act (12

6 U.S.C. 1766) is amended by striking subsection (k).

7 (b) The Federal Credit Union Act is amended by in8 serting after section 129 (12 U.S.C. 1772c) the following

9 new section:

10 ‘‘SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN

11 FUND FOR CREDIT UNIONS.

12 ‘‘(a) IN GENERAL.—Notwithstanding any other pro13 vision of law, the Board may exercise the authority grant14 ed to the Board by the Community Development Credit

15 Union Revolving Loan Fund Transfer Act, including any

16 additional appropriation made and earnings accrued, sub17 ject only to this section and to regulations prescribed by

18 the Board.

19 ‘‘(b) INVESTMENT OF FUND BALANCES.—

20 ‘‘(1) IN GENERAL.—The Board may invest

21 money in the Community Development Credit Union

22 Revolving Loan Fund which the Board determines is

23 not immediately needed for other purposes in securi24 ties issued by the Secretary of the Treasury under

25 chapter 31, of title 31, United States Code.
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1 ‘‘(2) TREATMENT OF INTEREST.—Any interest

2 which accrues on any securities described in para3 graph (1) shall be deposited in and become a part

4 of the Fund.

5 ‘‘(c) MATCHING REQUIREMENTS AUTHORIZED.—The

6 Board may require that any loans made from the Fund

7 be matched by an increase in the number of shares in the

8 borrower credit union.

9 ‘‘(d) ALLOCATION OF INTEREST.—Interest earned by

10 the Fund may be allocated by the Board for technical as11 sistance to community development credit unions.’’.

12 TITLE V—CONSUMER

13 EDUCATION

14 SEC. 501. CONSUMER EDUCATION PROGRAMS.

15 (a) IN GENERAL.—The appropriate Federal banking

16 agencies (as defined in section 3(q) of the Federal Deposit

17 Insurance Act) shall, to the extent practicable, encourage

18 insured depository institutions to offer or sponsor edu19 cational services for consumers residing in qualified dis20 tressed communities (as defined in section 233(b) of the

21 Bank Enterprise Act of 1991) located in the service area

22 of such institutions, relating to the financial products and

23 services offered by the institution.

24 (b) EDUCATIONAL SERVICES.—The educational serv25 ices sponsored or offered by insured depository institutions
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1 as described in subsection (a) shall, to the extent prac2 ticable, include a course in personal finance designed for

3 persons in a qualified distressed community and such

4 course may include information related to the following:

5 (1) Consumer credit laws and consumer rights

6 and obligations.

7 (2) The credit process and how to obtain a

8 loan.

9 (3) The meaning and significance of entries on

10 a consumer report (as defined in section 603(d) of

11 the Fair Credit Reporting Act).

12 (4) Basic banking and personal finances.

13 (5) Development of an individual financial plan

14 and budget.

15 SEC. 502. CREDIT REPORTS.

16 (a) INSURED DEPOSITORY INSTITUTIONS.—Any in17 sured depository institution that sponsors or offers a

18 course for consumers residing in a qualified distressed

19 community as described in section 501(b) of the Bank En20 terprise Act Amendments of 1993 may, in its discretion

21 and to the extent practicable, report the names of any

22 consumer who completes such course to any consumer re23 porting agency (as defined in section 603(f) of the Fair

24 Credit Reporting Act) to which the institution reguarly re25 ports credit information on consumers.
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1 (b) CONSUMER REPORTING AGENCIES.—Any

2 consumer report furnished by a consumer reporting agen3 cy on any consumer residing in a qualified distressed com4 munity who has completed an educational course spon5 sored or offered by an insured depository institution as

6 described in section 501(b) of the Bank Enterprise Act

7 Amendments of 1993 may, to the extent practicable, in8 clude an indication of the completion of such course if the

9 consumer reporting agency has received notice of the

10 course completion from the institution.

11 SEC. 503. CREDIT CARDS.

12 Insured depository institutions are encouraged to

13 sponsor or offer courses for consumers residing in quali14 fied distressed communities as described in section 501(b)

15 of the Bank Enterprise Act Amendments of 1993, and at

16 their discretion and to the extent practicable, offer

17 consumer financial services otherwise available at such in18 stitution, including consumer credit card services, to such

19 consumers who complete such course and qualify for such

20 financial services.

21 TITLE VI—COMMUNITY

22 DEVELOPMENT TASK FORCE

23 SEC. 601. TASK FORCE.

24 (a) IN GENERAL.—The President shall appoint a

25 community development task force to review the progress
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1 being made by the appropriate Federal agencies and in2 strumentalities in implementing the policies and programs

3 established by this Act and amendments made by this Act

4 and the Bank Enterprise Act of 1991.

5 (b) REPORT.—The community development task

6 force appointed under subsection (a) shall submit a report

7 to the Congress by the end of the 2-year period beginning

8 on the date of the enactment of this Act containing a de9 tailed summary of the task force’s findings in connection

10 with the review conducted under subsection (a) and such

11 recommendations for legislative or administrative action

12 as the task force may determine to be appropriate.

13 (c) CHAIRPERSON.—The chairman of the Neighbor14 hood Reinvestment Corporation shall serve as the chair15 person of the community development task force.

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