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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2707 Introduced in House (IH)]

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.

    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 ``Bank Enterprise Act Amendments of 
1993''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (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, non-profit 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 all private sector 
        institutions, including 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-sized 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 ENTERPRISE ACT ENHANCEMENTS

SEC. 101. COMMUNITY DEVELOPMENT FUND.

    (a) In General.--The Bank Enterprise Act (12 U.S.C. 1834 et seq.) 
is amended by adding at the end the following new sections:

``SEC. 235. COMMUNITY DEVELOPMENT FUND.

    ``(a) In General.--There is hereby established the Community 
Development Fund (hereafter in this section referred to as the `Fund').
    ``(b) Administration of Fund.--
            ``(1) In general.--The Fund shall be administered by the 
        Community Enterprise Assessment Credit Board (hereafter in this 
        section referred to as the `Board').
            ``(2) Standards and procedures.--The Board shall establish 
        standards and procedures for administering the Fund, processing 
        and reviewing applications for financial and technical 
        assistance, and providing oversight for the expenditure of 
        money from the Fund and for projects funded by the Fund.
            ``(3) National information clearinghouse.--The Fund shall 
        establish and maintain an information clearinghouse in 
        coordination with the Departments of Agriculture, Commerce, and 
        Housing and Urban Development, the Small Business 
        Administration, other Federal agencies, and community 
        development financial institutions--
                    ``(A) to cause to be collected, compiled, and 
                analyzed information pertinent to community development 
                financial institutions that will assist in creating, 
                developing, expanding, and preserving these 
                institutions; and
                    ``(B) to cause to be established a service center 
                for comprehensive information on financial, technical 
                and management assistance, case studies of the 
                activities of community development financial 
                institutions, regulations, and other information that 
                may be useful to promote the purpose of this Act.
            ``(4) Powers.--The Board shall have such powers as may be 
        necessary for the Board, in the Board's status as a Federal 
        agency, to administer the Fund and carry out the purposes of 
        this section.
            ``(5) Regulations.--The Board may prescribe such 
        regulations and issue such orders as the Board may determine to 
        be appropriate to administer the Fund and carry out the 
        purposes of this section.
    ``(c) Purposes of Fund.--Amounts in the Fund shall be available 
to--
            ``(1) support a program of making investments in and 
        providing assistance to community development financial 
        institutions that will provide greater economic opportunity in 
        qualified distressed communities;
            ``(2) provide financial and technical assistance to 
        community development financial institutions; and
            ``(3) operate a national information clearinghouse 
        described in subsection (b)(3).
    ``(d) Authorization of Appropriations.--
            ``(1) Fund.--There are authorized to be appropriated to the 
        Fund to carry out this section $30,000,000 for fiscal year 
        1994, $52,000,000 for fiscal year 1995, $53,500,000 for fiscal 
        year 1996, and $55,500,000 for fiscal year 1997.
            ``(2) Board.--There are authorized to be appropriated to 
        the Board to carry out this subtitle (other than this section) 
        $30,000,000 for fiscal year 1994, $52,000,000 for fiscal year 
        1995, $53,500,000 for fiscal year 1996, and $55,500,000 for 
        fiscal year 1997.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Community development financial institution.--The 
        term `community development financial institution'--
                    ``(A) means any bank, savings association, credit 
                union, depository institution holding company or 
                affiliate of such company, microenterprise development 
                fund, community development corporation, community 
                development revolving loan fund, or other depository or 
                nondepository organization which--
                            ``(i) promotes the provision of capital, 
                        credit, or development services in qualified 
                        distressed communities; and
                            ``(ii) the Board finds provides the same or 
                        greater community participation in the 
                        activities of the institution or organization 
                        as are required under section 234(b) for a 
                        community development bank; and
                    ``(B) does not include an agency or instrumentality 
                of the United States or an agency or instrumentality of 
                any State or political subdivision of any State.
            ``(2) Bank, savings association, depository institution 
        holding company, and affiliate.--The terms `bank', `savings 
        association', `depository institution holding company', and 
        `affiliate' have the meaning given to such terms in section 3 
        of the Federal Deposit Insurance Act.
            ``(3) Credit union.--The term `credit union' means any 
        State or Federal credit union (as defined in section 101 of the 
        Federal Credit Union Act).
            ``(4) Development services.--The term `development 
        services' means activities conducted by a community development 
        financial institution which promote community development by 
        developing, supporting, and strengthening the lending, 
        investment, and capacity-building activities undertaken by 
        institutions, including--
                    ``(A) business planning services;
                    ``(B) financial and credit counseling services;
                    ``(C) marketing and management assistance; and
                    ``(D) administrative activities associated with 
                lending or investment.
            ``(5) Insured community development financial 
        institution.--The term `insured community development financial 
        institution'--
                    ``(A) means any community development financial 
                institution which is an insured depository institution; 
                and
                    ``(B) any insured credit union which has been 
                designated as low-income by the National Credit Union 
                Administration.
            ``(6) Insured credit union.--The term `insured credit 
        union' has the same meaning given to such term in section 
        101(7) of the Federal Credit Union Act.
            ``(7) Insured depository institution.--The term `insured 
        depository institution' has the meaning given to such term in 
        section 3(c) of the Federal Deposit Insurance Act.
            ``(8) Qualified distressed community.--The term `qualified 
        distressed community' has the meaning given to such term in 
        section 233(b).
            ``(9) State.--The term `State' has the meaning given to 
        such term in section 3 of the Federal Deposit Insurance Act.

``SEC. 236. APPLICATIONS FOR ASSISTANCE FROM FUND.

    ``(a) Form and Procedures.--An application for assistance under 
section 235 shall be submitted by an applicant in such form and in 
accordance with such procedures as the Board shall establish.
    ``(b) Minimum Requirements.--The Board shall require that the 
application--
            ``(1) demonstrate to the satisfaction of the Board that the 
        applicant is, or upon the receipt of a charter will be, a 
        community development financial institution;
            ``(2) demonstrate that the applicant will serve a qualified 
        distressed community;
            ``(3) in the case of an applicant that has previously 
        received assistance from the Fund, demonstrate that the 
        applicant--
                    ``(A) has successfully carried out the applicant's 
                responsibilities with respect to such assistance;
                    ``(B) has become or is about to become an entity 
                that will not be dependent upon assistance from the 
                Fund for continued viability; and
                    ``(C) will expand the applicant's operations into a 
                new qualified distressed community, offer new services, 
                or will increase the volume of its current business;
            ``(4) in the case of a community development financial 
        institution with existing operations, demonstrate a record of 
        success of serving a qualified distressed community;
            ``(5) include a detailed and comprehensive strategic plan 
        for the organization that contains--
                    ``(A) a business plan of at least 5 years that 
                demonstrates the applicant is properly managed and has 
                the capacity to form and operate a community 
                development financial institution that is, or will 
                become, an entity that will not be dependent upon 
                assistance from the Fund for continued viability;
                    ``(B) a statement that the applicant has, or will 
                have, in the applicant's charter or other governing 
                documents a commitment to community development, or 
                other evidence of a prior history and a continuing 
                affirmation of a commitment of community development;
                    ``(C) an analysis of the needs of the qualified 
                distressed community and a strategy for how the 
                applicant will attempt to meet those needs;
                    ``(D) a plan to coordinate use of assistance from 
                the Fund with existing Federal, government-sponsored 
                enterprise, and State and local assistance programs, 
                and private sector financial services;
                    ``(E) a statement that the proposed activities of 
                the applicant are consistent with existing economic, 
                community and housing development plans adopted by or 
                applicable to the qualified distressed community;
                    ``(F) a description of how the applicant will 
                affiliate, network, or otherwise coordinate with a full 
                range of community organizations and financial 
                institutions which provide, or will provide, capital, 
                credit, or secondary markets in order to assure that 
                banking, economic development, investment, affordable 
                housing, and other related services will be available 
                within the qualified distressed community; and
                    ``(G) such other information as the Board considers 
                to be appropriate for inclusion in the strategic plan;
            ``(6) demonstrate that the applicant will carry on the 
        applicant's activities consistent with the purposes of the 
        assistance provided by the Fund within the qualified distressed 
        community;
            ``(7) include a detailed and specific statement of 
        applicant's plans and likely sources of funds to match the 
        amount of assistance from the Fund with funds from private 
        sources in accordance with the requirements of section 238(e); 
        and
            ``(8) include such other information as the Board may 
        require.

``SEC. 237. SELECTION OF INSTITUTIONS.

    ``(a) In General.--The Board shall, in the Board's discretion, 
select applications that meet the requirements of section 236 and award 
assistance from the Fund in accordance with section 238.
    ``(b) Selection Criteria.--In selecting applications, the Board 
shall consider applications based on factors established by the Board 
which shall include the following criteria:
            ``(1) The likelihood of success of the applicant in forming 
        and operating a community development financial institution.
            ``(2) The range and comprehensiveness of the capital, 
        credit, and development services to be provided by the 
        applicant.
            ``(3) The extent of the need, as measured by objective 
        criteria of distress, within the qualified distressed community 
        for the types of activities proposed by the applicant.
            ``(4) The likelihood that the proposed activities will 
        benefit a significant portion of the qualified distressed 
        community or, in the case of a community development financial 
        institution with existing operations, evidence of the 
        applicant's record of success in serving a qualified distressed 
        community.
            ``(5) The extent to which the applicant will concentrate 
        the applicant's activities on serving low and very low-income 
        families.
            ``(6) The evidence of the extent of a broad cross-section 
        of support from the qualified distressed community.
            ``(7) The experience and background of the proposed 
        management team.
            ``(8) The amount of legally enforceable commitments 
        available at the time of application to meet or exceed the 
        matching requirements under section 238(e) and the strength of 
        the plan for raising the balance of the match.
            ``(9) In the case of applicants that have previously 
        received assistance from the Fund, the extent to which they 
        have met or exceeded the performance goals applicable with 
        respect to such assistance.
            ``(10) The extent to which the proposed activities will 
        expand the employment base within the qualified distressed 
        community.
            ``(11) The extent to which the applicant is, or will be, 
        community-owned or community-governed.
            ``(12) Whether the applicant is, or will become, an insured 
        community development financial institution.
            ``(13) Whether the applicant is, or will be located, in a 
        qualified distressed community.
            ``(14) In the case of an institution that is not an insured 
        community development financial institution, the extent to 
        which the institution has or will have the ability to increase 
        the applicant's resources through affiliation with a secondary 
        market, insured depository institution, or other financial 
        intermediary in order to multiply the amount of capital or 
        credit available for community development.
            ``(15) In the case of an insured depository institution or 
        insured credit union applicant, whether the institution--
                    ``(A) has or will have a substantial affiliation 
                with an entity or network of entities that are 
                community development financial institutions; and
                    ``(B) has a comprehensive plan for providing 
                meaningful financial assistance to such an entity or 
                network of entities.
    ``(c) Fair Distribution of Funding.--In addition to the criteria 
described in subsection (b), the Board, in making selections under this 
section, shall seek to provide a fair distribution of funding among--
            ``(1) a geographically diverse group of applicants, which 
        shall include applicants from nonmetropolitan and rural areas;
            ``(2) various types of community development financial 
        institutions; and
            ``(3) community development financial institutions of 
        various sizes (as determined on the basis of total assets).

``SEC. 238. ASSISTANCE PROVIDED BY THE FUND.

    ``(A) In General.--
            ``(1) Promotion of hospitable environment for development 
        and growth.--The Fund shall work to promote an environment 
        hospitable to business information, economic growth, community 
        development, and affordable housing in qualified distressed 
        communities.
            ``(2) Coordination of activities.--The Fund shall 
        coordinate activities of the Fund with other Federal agencies 
        and other community and economic development programs.
            ``(3) Purpose of assistance.--Assistance may be provided 
        to--
                    ``(A) an existing qualified community development 
                financial institution to--
                            ``(i) expand the institution's activities 
                        to serve any qualified distressed community not 
                        currently served by another qualified community 
                        development financial institution receiving 
                        assistance under this section; and
                            ``(ii) expand the volume of the 
                        institution's activities consistent with the 
                        purposes of the Fund;
                    ``(B) from a new entity to undertake activities 
                consistent with the purposes of the Fund; or
                    ``(C) to assist an existing entity to modify the 
                entity's structure or activities in order to undertake 
                activities consistent with the purposes of the Fund.
    ``(b) Types of Assistance.--
            ``(1) In general.--
                    ``(A) Financial assistance.--The Fund may provide 
                financial assistance to qualified community development 
                financial institutions through equity investments, 
                loans, deposits, membership shares, and grants.
                    ``(B) Technical assistance.--The Fund may provide 
                technical assistance, including training, and grants 
                for technical assistance to qualified community 
                development financial institutions.
                    ``(C) Allocation of assistance.--The allocation of 
                awards of assistance between insured and uninsured 
                community development financial institutions shall be 
                in the discretion of the Board, except that due 
                consideration shall be given to the allocation of funds 
                to insured community development financial 
                institutions.
            ``(2) Limitations on equity investments.--
                    ``(A) 50 percent of equity maximum.--The Fund shall 
                structure financial assistance to a qualified community 
                development financial institution in such a manner that 
                the Fund does not own more than 50 percent of the 
                equity of such institution after providing such 
                assistance and does not control the operations of such 
                institution.
                    ``(B) Coordination with other laws.--The Fund shall 
                not be deemed to control any institution in which the 
                Fund has an equity investment for the purposes of any 
                applicable Federal or State law.
                    ``(C) Limitation on form of equity.--In the case of 
                equity investments, the Fund shall hold only 
                transferable, nonvoting investments, except that the 
                security representing any such equity investment may 
                provide for convertibility to working stock upon 
                transfer of the security by the Fund.
            ``(3) Deposits.--Notwithstanding any other provision of 
        law, deposits made pursuant to this section in qualified 
        insured community development financial institutions shall not 
        be subject to any requirement for collateral or security.
            ``(4) Limitations on obligations.--Direct loan obligations 
        may be incurred only to the extent that appropriations of 
        budget authority to cover their costs, as defined in section 
        502 of the Congressional Budget Act of 1974, are made in 
        advance.
    ``(c) Purpose of Financial Assistance.--Financial assistance made 
available under this section may be used by assisted institutions to 
develop or support--
            ``(1) commercial facilities that enhance revitalization, 
        community stability, or job creation and retention efforts;
            ``(2) business creation and expansion efforts that--
                    ``(A) create or retain jobs for low-income people;
                    ``(B) enhance the availability of products and 
                services to low-income people; or
                    ``(C) create or retain businesses owned by low-
                income people or residents of a qualified distressed 
                community;
            ``(3) community facilities that provide benefits to low-
        income people or enhance community stability;
            ``(4) the provision of basic financial services to low-
        income people or residents of a qualified distressed community;
            ``(5) the provision of development services;
            ``(6) home ownership opportunities that are affordable to 
        low-income households;
            ``(7) rental housing that is principally affordable to low-
        income households; and
            ``(8) other activities deemed appropriate by the Fund.
    ``(d) Amount of Assistance.--
            ``(1) In general.--The Fund may provide up to $5,000,000 of 
        assistance per application to any one qualified insured 
        community development financial institution and up to 
        $2,000,000 per application to any other qualified community 
        development financial institution.
            ``(2) Authority of board to set minimum amounts.--The Board 
        shall have the authority to set minimum amounts of assistance 
        from the Fund per institution.
    ``(e) Matching Requirements.--
            ``(1) In general.--Assistance provided to qualified insured 
        community development financial institutions, other than 
        deposits or membership shares of $100,000 or less, technical 
        assistance, or grants for technical assistance, shall be 
        matched by no less than $1 of equity, deposits, or membership 
        shares for each dollar provided by the Fund.
            ``(2) Other forms of assistance.--
                    ``(A) General rule.--The Fund shall require a match 
                for all other assistance, the amount and form of which 
                shall be in the discretion of the Fund.
                    ``(B) Exception.--The Fund shall in no event 
                require assistance provided in the form of deposits or 
                membership shares of $100,000 or less, technical 
                assistance, or grants for technical assistance to be 
                matched.
                    ``(C) Legally enforceable commitments required.--
                The Fund shall provide no assistance except technical 
                assistance or grants for technical assistance until a 
                qualified community development financial institution 
                has secured legally enforceable commitments for the 
                entire match required.
                    ``(D) Form of payment.--Assistance may be provided 
                in one lump sum, or over a period of time, as 
                determined by the Fund.
            ``(3) Match requirement.--Assistance shall be matched with 
        funds from sources other than the Federal Government.
    ``(f) Terms and Conditions.--
            ``(1) In general.--The Fund shall provide assistance 
        authorized under this Act in such form and subject to such 
        restrictions as are necessary to ensure that to the maximum 
        extent practicable--
                    ``(A) all assistance granted is used by the 
                qualified community development financial institution 
                in a manner consistent with the purposes of this Act;
                    ``(B) qualified community development financial 
                institutions receiving assistance that are not 
                otherwise regulated by the Federal Government or by a 
                State government are financially and managerially 
                sound;
                    ``(C) assistance results in a net increase, both 
                nationally and in the local communities in which 
                assistance is provided, in capital, credit, and 
                development services; and
                    ``(D) assistance is provided in a manner that 
                encourages affiliations and partnerships between 
                insured depository institutions, secondary markets or 
                other sources of credit or leverage and local 
                organizations dedicated to community development.
            ``(2) Consultation with banking regulators.--Prior to 
        providing assistance to a qualified insured community 
        development financial institution, the Board should consult 
        with the appropriate Federal banking agency or, in the case of 
        an insured credit union, the National Credit Union 
        Administration.
            ``(3) Assistance agreement.--
                    ``(A) Restrictions on use of assistance.--The Board 
                shall impose restrictions on the use of assistance 
                provided by the Fund through the use of a stock 
                purchase agreement, share purchase agreement, or 
                through a contract entered into in consideration for 
                the provision of assistance.
                    ``(B) Performance goals.--
                            ``(i) In general.--Any agreement or 
                        contract relating to the provision of 
                        assistance shall require the institution 
                        assisted to comply with performance goals.
                            ``(ii) Negotiation of goals.--The 
                        performance goals shall be negotiated between 
                        the Board and each qualified community 
                        development financial institution receiving 
                        assistance based upon the strategic plan 
                        submitted pursuant to section 236(b)(5).
                            ``(iii) Renegotiation.--The performance 
                        goals may be renegotiated jointly as 
                        appropriate, subject to subparagraph (C).
                            ``(iv) Determination of activity levels.--
                        Activity levels for insured community 
                        development financial institutions should be 
                        determined by the Board in consultation with 
                        the appropriate Federal banking agency or, in 
                        the case of an insured credit union, with the 
                        National Credit Union Administration.
                    ``(C) Sanctions.--
                            ``(i) In general.--The agreement or 
                        contract relating to the provision of 
                        assistance shall specify sanctions available to 
                        the Board, in the Board's discretion, in the 
                        event of noncompliance with the purposes of the 
                        assistance or the terms of the agreement.
                            ``(ii) Sanctions available.--The sanctions 
                        available for purposes of clause (i) may 
                        include revocation of approval of the 
                        application, terminating or reducing future 
                        assistance, requiring repayment of assistance, 
                        and requiring changes to the performance goals 
                        imposed pursuant to subparagraph (B) or to the 
                        strategic plan submitted pursuant to section 
                        236(b)(5).
                            ``(iii) Consultation with other agencies.--
                        In the case of an insured community development 
                        financial institution, the Board shall consult 
                        with the appropriate Federal banking agency or, 
                        in the case of an insured credit union, the 
                        National Credit Union Administration, before 
                        imposing sanctions pursuant to this paragraph.
            ``(4) Review.--At least annually, the Board shall review 
        the performance of each assisted qualified community 
        development financial institution in carrying out the 
        applicant's strategic plan and performance goals.
            ``(5) Reporting.--The Board shall require each qualified 
        community development financial institution receiving 
        assistance to submit an annual report to the Fund on the 
        applicant's activities, financial condition, success in meeting 
        performance goals, and compliance with other requirements of 
        this Act.
    ``(g) Authority To Sell Equity Investments and Loans.--The Board 
may--
            ``(1) sell any investments or loan asset held by the Fund; 
        and
            ``(2) in the Board's discretion, retain the power to 
        enforce limitations on assistance entered into in accordance 
        with the requirements of this section.
    ``(h) Rule of Construction--No provision of this Act shall be 
construed as affecting any authority of the appropriate Federal banking 
agency or, in the case of an insured credit union, the National Credit 
Union Administration, to supervise and regulate an insured community 
development financial institution.

``SEC. 239. RECORDKEEPING, REPORTS, AUDITS; AND INVESTMENTS.

    ``(a) Recordkeeping.--
            ``(1) In general.--A qualified community development 
        financial institution receiving assistance from the Fund shall 
        keep such records as may be reasonably necessary to disclose 
        the disposition of any assistance under this Act and to ensure 
        compliance with the requirements of this Act.
            ``(2) Fund access to records.--The Fund shall have access, 
        for the purpose of determining compliance with this Act, to any 
        books, documents, papers, and records of a qualified community 
        development financial institution receiving assistance from the 
        Fund that are pertinent to assistance received under this Act.
    ``(b) Reports.--
            ``(1) Annual report.--
                    ``(A) Report required.--The Fund shall conduct an 
                annual evaluation of the activities carried out 
                pursuant to this Act and shall submit a report of its 
                findings to the President within 120 days of the end of 
                each fiscal year of the Fund.
                    ``(B) Contents.--The report shall include financial 
                statements audited in accordance with subsection (c).
            ``(2) Institutional voice for community development.--
                    ``(A) Ongoing study.--The fund shall conduct, or 
                cause to be conducted, an ongoing study to identify and 
                evaluate the most effective and financially sound 
                policies and practices for encouraging investment in 
                distressed communities, including small business and 
                commercial lending, business formation and expansion, 
                community and economic development, commercial real 
                estate and multifamily housing, and home mortgages. In 
                addition, the Fund may study, or cause to be studied, 
                related matters, such as identification of sources of 
                and access to capital and loans for community 
                investment; development of secondary markets for 
                economic and community development, small business and 
                commercial loans, and home mortgage loans and 
                investments; and methods to involve all segments of the 
                financial services industry in community development.
                    ``(B) Consultation.--In the conduct of the study, 
                the Fund shall consult, or cause consultation with, the 
                Office of the Comptroller of the Currency, the Federal 
                Deposit Insurance Corporation, the Board of Governors 
                of the Federal Reserve System, the Federal Housing 
                Finance Board, the Farm Credit Administration, the 
                Office of Thrift Supervision, the National Credit Union 
                Administration, community reinvestment, civil rights, 
                consumer and financial organizations, and such 
                representatives of agencies or other persons as the 
                Fund may determine.
                    ``(C) Reports.--
                            ``(i) Initial report.--Within 270 days 
                        after the date of enactment of the Bank 
                        Enterprise Act Amendments of 1993, the Board 
                        shall report to the President its initial 
                        findings and recommendations regarding the 
                        matters set forth in subparagraph (A).
                            ``(ii) Subsequent reports.--After the 
                        report required under clause (i), the Board 
                        shall report its findings and recommendations 
                        to the President with the annual report 
                        required by subsection (b)(1).
            ``(3) Investment, governance, and role of fund.--After the 
        end of the 6-year period beginning on the date of the enactment 
        of the Bank Enterprise Act Amendments of 1993, the Fund, in 
        accordance with the procedures described in subparagraphs (A) 
        and (B) of paragraph (2), shall conduct a study evaluating the 
        structure, governance, and performance of the Fund. The study 
        shall be submitted to the President. Such study shall include 
        an evaluation of the overall performance of the Fund in meeting 
        the purposes of this Act and any recommendations of the Fund 
        for restructuring the Board, altering procedures under which 
        the Fund is governed, the future role of the Fund in addressing 
        community development, and the ability of the Fund to become a 
        private, self-sustaining entity capable of fulfilling the 
        purposes of this Act.
    ``(c) Investment of Receipts and Proceeds.--
            ``(1) Proceeds deposited in fund.--Any dividends on equity 
        investments and proceeds from the disposition of investments, 
        deposits, or membership shares and interest payments and loan 
        principal repayments that are received by the Fund as a result 
        of assistance provided pursuant to section 238 shall be 
        deposited and accredited to the Fund.
            ``(2) Investments of amounts in the fund.--The Secretary of 
        the Treasury shall invest amounts deposited in such account in 
        public debt securities with maturities suitable to the needs of 
        the Fund and bearing interest at rates determined by the 
        Secretary of the Treasury, taking into consideration current 
        market yields on outstanding marketable obligations of the 
        United States of comparable maturities.
            ``(3) Availability of amounts.--Amounts deposited into the 
        account and interest earned on such amounts pursuant to this 
        section shall be available to the Fund until expended.''
    (b) Additional Board Members.--Section 233(d)(2) of the Bank 
Enterprise Act of 1991 (12 U.S.C. 1834a(d)(2)) is amended--
            (1) by striking ``5 members'' and inserting ``7 members''; 
        and
            (2) by redesignating subparagraph (D) as subparagraph (F) 
        and inserting after subparagraph (C) the following new 
        subparagraphs:
                    ``(D) The Secretary of Agriculture.
                    ``(E) The Administrator of the Small Business 
                Administration.''.
    (c) Effective Date of Regulations.--The Board shall prescribe 
regulations necessary to implement the amendments made by subsection 
(a) not later than 210 days after enactment of this Act.
    (d) Technical and Conforming Amendment.--Section 8E(a)(2) of the 
Inspector General Act of 1978 (5 U.S.C. App. 3, 8E(a)(2)) is amended by 
inserting ``the Community Enterprise Assessment Credit Board,'' 
immediately after ``the Commodity Futures Trading Commission''.

SEC. 102. CREDITS FOR NEWLY CHARTERED COMMUNITY DEVELOPMENT BANKS.

    (a) In General.--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 new paragraph:
            ``(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 the 1st 6 semiannual periods which begin after the 
        date of the approval of the initial charter of such insured 
        depository institution by the appropriate Federal banking 
        agency or State bank 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. 103. FINANCIAL SERVICES FOR DISTRESSED COMMUNITIES.

    (a) Bank Enterprise Act.--The Bank Enterprise Act of 1991 is 
amended by inserting after section 239 (as added by section 101 of this 
title) the following new section:

``SEC. 240. 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, and to such 
limitations 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. 104. 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--
                        ``(i) the Board; or
                            ``(ii) any insured depository institution 
                        in accordance with paragraph (2) if such 
                        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 
                factors considered by the Board shall include 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.
                            ``(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 new subparagraphs:
                    ``(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.
                    ``(P) Extensions of credit for activities which 
                qualify for advances from a Federal home loan bank 
                under a community investment program established by the 
                bank pursuant to section 10(i) of the Federal Home Loan 
                Bank Act.''
    (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 new subsection:
    ``(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, nonprofit microloan lending organization 
licensed by the Small Business Administration, development company 
certified by the Small Business Administration, community development 
financial institution,''.
    (f) Nonprofit, Private, Community Development Corporations--
            (1) In general.--Section 234(a)(1) of the Bank Enterprise 
        Act of 1991 (12 U.S.C. 1834b(a)(1)) is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (C);
                    (B) by inserting ``or'' after the semicolon at the 
                end of subparagraph (D); and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(E) invests in a nonprofit, private, community 
                development corporation;''.
            (2) Nonprofit, private, community development corporation 
        requirements.--Section 234 of the Bank Enterprise Act of 1991 
        (12 U.S.C. 1834b) is amended by adding at the end the following 
        new subsection:
            ``(f) Nonprofit, Private, Community Development Corporation 
        Requirements.--
            ``(1) In general.--A private, nonprofit, community 
        development corporation meets the requirement of this 
        subsection if the corporation satisfies the selection criteria 
        and the performance requirements which the Board shall 
        establish and administer.
            ``(2) Performance requirements.--The performance 
        requirements established pursuant to paragraph (1) shall 
        include the following:
                    ``(A) The corporation has received funding from a 
                Federal agency or department.
                    ``(B) The lending and investments of the 
                corporation have been regulated by the Federal agency 
                providing the funding.
                    ``(C) The corporation has satisfactorily met the 
                conditions of the funding.
                    ``(D) The corporation has submitted annual audits 
                or other reports required by the agency providing the 
                funding.''.
            (3) Definition of nonprofit, private, community development 
        corporation.--Section 234(e) of the Bank Enterprise Act of 1991 
        (12 U.S.C. 1834b(e)) is amended by adding at the end the 
        following new paragraph:
            ``(6) Nonprofit, private, community development corporation 
        requirements.--The term `private, nonprofit, community 
        development corporation' means a private, locally-initiated, 
        nonprofit corporation (or a private nonprofit affiliate of such 
        a corporation) which--
                    ``(A) meets the requirements of subsection (f);
                    ``(B) is governed by a board consisting of 
                residents and business and civic leaders of the 
                community; and
                    ``(C) sponsors enterprises which provide 
                employment, housing, and business development 
                opportunities for low- and moderate-income residents of 
                a qualified distressed community and are designed to 
                increase employment, housing, and business 
                opportunities in such community.''.

            TITLE II--BANK COMMUNITY DEVELOPMENT INCENTIVES

SEC. 201. 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 adding 
at the end the following new section:

``SEC. 809. PERFORMANCE RATING STANDARDS FOR CRA CREDIT.

    ``(a) Performance Rating Standards Required.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of the Bank Enterprise Act Amendments of 1993, the 
        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 performance rating standards to assess the 
        record of a regulated financial institution in meeting the 
        credit needs of the institution's community, including low- and 
        moderate-income neighborhoods, for purposes of this title.
            ``(2) Rating methodology.--The performance rating standards 
        shall require--
                    ``(A) a quantitative analysis of objective, 
                quantitative data which shall be used to measure the 
                extent to which a regulated financial institution is 
                committing financial and managerial resources to 
                community reinvestment activities in relation to the 
                institution's total amount of deposit liabilities; and
                    ``(B) a qualitative analysis of subjective factors 
                which the Financial Institutions Examination Council 
                determines are appropriate in assessing a regulated 
                financial institution for purposes of this title, 
                including the following factors:
                            ``(i) The regulated financial institution's 
                        asset size and service area.
                            ``(ii) Access to Federal programs.
                            ``(iii) Economic conditions in the 
                        institution's service area.
                            ``(iv) Legal impediments.
                            ``(v) The unique nature of any community 
                        reinvestment activity of the regulated 
                        financial institution which may not be 
                        accurately or adequately reflected in amount of 
                        the institution's investments.
                            ``(vi) The community reinvestment 
                        activities of any affiliate (as defined in 
                        section 2(k) of the Bank Holding Company Act of 
                        1956) of the institution which is not a 
                        regulated financial institution to the extent 
                        the consideration of such affiliate is 
                        appropriate in assessing the community 
                        reinvestment activities of the institution.
                            ``(vii) Any additional factors that 
                        reasonably bear upon the institution's ability 
                        to meet the credit needs of the institution's 
                        service area, including low- and moderate-
                        income neighborhoods.
            ``(3) Qualified investments and activities.--
                    ``(A) In general.--The Financial Institutions 
                Examination Council shall compile a list of activities 
                and investments which qualify as community reinvestment 
                activities for purposes of this title and the relative 
                weight which shall be accorded to each type or category 
                of such investment activities for purposes of paragraph 
                (2)(A).
                    ``(B) Certain activities and investments 
                included.--The following activities and investments 
                shall qualify as community re-investment activities for 
                purposes of this title:
                            ``(i) Any activity or investment of a 
                        regulated financial institution which is 
                        treated as a qualifying activity or investment 
                        under section 233(a) of the Bank Enterprise Act 
                        of 1991 for purposes of such Act.
                            ``(ii) Any activity of a regulated 
                        financial institution which involves providing 
                        lifeline accounts (as defined in section 232(a) 
                        of the Bank Enterprise Act of 1991).
                            ``(iii) Any investment which--
                                    ``(I) is made by a regulated 
                                financial institution or an affiliate 
                                of any such institution 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; and
                                    ``(II) is consistent with safe and 
                                sound banking practices.
            ``(4) Preinvestment opinion.--
                    ``(A) Procedures required.--The Financial 
                Institutions Examination Council shall establish 
                procedures under which a regulated financial 
                institution can obtain a written opinion of the 
                appropriate Federal supervisory agency on the 
                qualification of a proposed activity or investment as a 
                community reinvestment activity for purposes of this 
                title.
                    ``(B) Timely opinion required.--In the case of a 
                request for an opinion under the procedures established 
                pursuant to subparagraph (A) with respect to a proposed 
                activity or investment, the appropriate Federal 
                financial supervisory agency shall provide a written 
                opinion on whether such activity or investment may be 
                treated as a qualified community reinvestment activity 
                within 3 business days of the receipt of the request.
    ``(b) Regulations to Include Standards.--Each appropriate Federal 
financial supervisory agency shall include the standards established 
under subsection (a) in the regulations prescribed by the agency 
pursuant to this title.
    ``(c) Assigned Ratings.--The Federal financial supervisory agencies 
shall base the assigned ratings required under section 807(b)(2) on the 
standards established pursuant to subsection (a).''.
    (b) Technical and Conforming Amendments.--Section 808(a) of the 
Community Reinvestment Act of 1977 (12 U.S.C. 2907(a)) is amended by 
striking ``may be a factor'' and inserting ``shall be considered and 
given credit''.

SEC. 202. CRA COMPLIANCE AND COMMUNITY DEVELOPMENT INVESTMENT 
              ACTIVITIES.

    (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''; 
        and
            (2) by adding at the end the following new subsections:
    ``(b) Safe Harbor for Institutions With Outstanding Ratings.--
Notwithstanding subsection (a)(2), an application for a deposit 
facility by a regulated financial institution in any year shall not be 
denied on the basis of such institution's compliance with this Act if 
such institution has received a 1 rating under section 807 in each of 
the 3 years preceding such year.
    ``(c) Determination of Service Area.--
            ``(1) Criteria and Procedures.--The Financial Institutions 
        Examination Council shall establish criteria and procedures for 
        delineating the service area of a regulated financial 
        institution on the basis of existing market conditions and 
        local credit needs, including the credit needs of low- and 
        moderate-income neighborhoods.
            ``(2) Use of criteria and procedures.--The delineation of 
        the service area of a regulated financial institution by the 
        appropriate Federal financial supervisory agency for purposes 
        of this title shall be made in accordance with the criteria and 
        procedures established under paragraph (1).
            ``(3) Rule of construction.--Any reference in this title to 
        a regulated financial institution's community shall be 
        considered to be a reference to the service area delineated for 
        such bank under this subsection.''.
    ``(b) Technical and Conforming Amendments.--Section 803 of the 
Community Reinvestment Act is amended by inserting at the end the 
following:
            ``(5) Depository institution holding company.--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) Community development organization, community 
        development bank, and community development corporation.--The 
        terms `community development organization', `community 
        development bank', and `community development corporation' have 
        the meaning given to such terms in section 234 of the Bank 
        Enterprise Act of 1991.
            ``(7) Community development credit union.--The term 
        `community development credit union' has the same meaning given 
        such term as in section 101(1) of the Federal Credit Union 
        Act.''.

SEC. 203. COMMUNITY COMMENTS; REVIEW PROCEDURE.

    ``(a) In General.--Section 809 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2906) (as added by section 201 of this Act) is amended 
by adding at the end the following new subsections:
    ``(d) Community Comments on Performance Rating Standards.--
            ``(1) Notice of opportunity required.--Before making any 
        final determination with respect to the proposed treatment of 
        any activity or investment as a qualified community 
        reinvestment, the Financial Institutions Examination Council 
        shall publish a notice in the Federal Register soliciting the 
        comments of any community group or other interested person.
            ``(2) Comments considered.--In making the determination 
        described in paragraph (1), the Financial Institutions 
        Examination Council shall consider comments received pursuant 
        to any solicitation of comments under this subsection.''.
    (b) Review Procedure for Written Evaluations.--
            (1) In general.--Section 807 of the Community Reinvestment 
        Act of 1977 (12 U.S.C. 2906) is amended by adding at the end 
        the following new subsection:
    ``(d) Review Procedure.--
            ``(1) Notice.--Each appropriate Federal financial 
        supervisory agency shall notify a regulated financial 
        institution of the completion of an evaluation of the 
        institution under subsection (a).
            ``(2) Hearing.--Any regulated financial institution may 
        request a hearing for agency review, in accordance with chapter 
        5 of title 5, United States Code, of any evaluation prepared 
        under this section before the end of the 14-day period 
        beginning on the date the institution receives notice under 
        paragraph (1).''.
            (2) Technical and conforming amendments.--Section 807(b)(2) 
        of the Community Reinvestment Act of 1977 (12 U.S.C. 
        2906(b)(2)) is amended--
                    (A) in subparagraph (A), by striking 
                ``Outstanding'' and inserting ``1, if the institution 
                has an outstanding'';
                    (B) in subparagraph (B), by striking 
                ``Satisfactory'' and inserting ``2, if the institution 
                has a satisfactory'';
                    (C) in subparagraph (C), by striking ``Needs to 
                improve'' and inserting ``3, if the institution needs 
                to improve its'';
                    (D) in subparagraph (D), by striking ``Substantial 
                noncompliance'' and inserting ``4, if the institution 
                is in substantial noncompliance''; and
                    (E) by striking the closing quotation marks before 
                the period at the end of subparagraphs (A), (B), (C), 
                and (D).

SEC. 204. 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 unless the company submits a 
        written notice of the proposed transaction or expansion not 
        less than 30 days before the date the proposed transaction or 
        expansion commences.
            ``(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, before the end of the 30-day period beginning on the 
        date of 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. 205. COMMUNITY DEVELOPMENT INVESTMENT ACCOUNTS.

    (a) National Banks.--Section 5136 of the Revised Statutes of the 
United States (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 to the extent 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.--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 to the extent 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. 206. 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. 207. AWARDS PROGRAM.

    The 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. 208. 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 striking ``undercapitalized'' each place such term 
        appears and inserting ``eligible'';
            (2) in paragraph (1)(F), by striking ``has capital'' and 
        all that follows through the period and inserting ``is 
        adequately capitalized as determined under section 38 of the 
        Federal Deposit Insurance Act.'';
            (3) in paragraph (1)(G), by striking ``not more than 15'' 
        and inserting ``less than 25''; and
            (4) by striking subparagraphs (A) and (B) of paragraph (4) 
        and inserting the following new subparagraphs:
                    ``(A) that is undercapitalized (as determined under 
                section 38 of the Federal Deposit Insurance Act); or
                    ``(B) that is a minority depository institution (as 
                defined in section 308(b) of Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989).''.

             TITLE III--HOUSING AND SMALL BUSINESS FINANCE

SEC. 301. MEETING UNMET HOUSING AND COMMUNITY CREDIT NEEDS THROUGH THE 
              FEDERAL HOME LOAN BANK SYSTEM.

    Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is 
amended by adding at the end the following new subsection:
    ``(k) Meeting Unmet Housing and Community Development Needs.--
            ``(1) In general.--Subject to paragraph (2), the Federal 
        home loan banks may establish programs and engage in activities 
        to meet housing finance and community development needs in 
        qualified distressed communities that cannot be met or are not 
        being met by the private sector of the economy.
            ``(2) Notice procedures.--
                    ``(A) Notice requirement.--A Federal home loan bank 
                may not engage in any new program or activity under 
                paragraph (1) without providing the Board with written 
                notice of the proposed program or activity at least 30 
                days before the program or activity is proposed to 
                commence.
                    ``(B) Notice of disapproval.--Any notice filed 
                under this subsection shall be deemed to be approved by 
                the Board unless, before the end of the 30-day period 
                beginning on the date the Board receives a notice under 
                subparagraph (A), the Board issues an order 
                disapproving the program or activity and setting forth 
                the reasons for disapproval.
                    ``(C) Approval before end of period.--
                            ``(i) In general.--Any transaction or 
                        activity may commence before the expiration of 
                        any period for disapproval established under 
                        this paragraph if the Board issues a written 
                        notice of approval.
                            ``(ii) Shorter periods by regulation.--The 
                        Board may prescribe regulations which provide 
                        for no notice under this paragraph or for a 
                        shorter notice period with respect to 
                        particular programs or activities.''.

SEC. 302. 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 at the end the following new sentence: ``The 
Secretary shall establish a separate specific 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 at the end the following new sentence: ``The 
Secretary shall establish a separate specific 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 at the end the following new sentence: ``The 
Secretary shall establish a separate specific 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 at the end the following new paragraph:
            ``(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. 303. 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. 304. MICROLOAN 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 microloan 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 by 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), by 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 Businesses 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 IV--CREDIT UNION AMENDMENTS

SEC. 401. 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 Federal credit 
        union may be treated as a community development credit union 
        for purposes of this Act and the Community Development Credit 
        Union Revolving Loan Fund Transfer Act, 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. 402. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND AND TECHNICAL 
              ASSISTANCE.

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

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

    ``(a) In General.--Notwithstanding any other provision of law, the 
Board may exercise the authority granted to the Board by the Community 
Development Credit Union Revolving Loan Fund Transfer Act, including 
any additional appropriation made and earnings accrued, subject only to 
this section and to regulations prescribed by the Board.
    ``(b) Investment of Fund Balances.--
            ``(1) In general.--The Board may invest money in the 
        Community Development Credit Union Revolving Loan Fund which 
        the Board determines is not immediately needed for other 
        purposes in securities issued by the Secretary of the Treasury 
        under chapter 31, of title 31, United States Code.
            ``(2) Treatment of interest.--Any interest which accrues on 
        any securities described in paragraph (1) shall be deposited in 
        and become a part of the Fund.
    ``(c) Matching Requirements Authorized.--The Board may require that 
any loans made from the Fund be matched by an increase in the number of 
shares in the borrower credit union.
    ``(d) Allocation of Interest.--Interest earned by the Fund may be 
allocated by the Board for technical assistance to community 
development credit unions.''.

                      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.
            (5) Development of an individual financial plan and budget.

SEC. 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 
Bank Enterprise Act Amendments of 1993 may, in its discretion and to 
the extent practicable, report the names of any consumer who completes 
such course to any consumer reporting agency (as defined in section 
603(f) of the Fair Credit Reporting Act) to which the institution 
reguarly 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 Bank Enterprise Act Amendments 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.

SEC. 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 Bank Enterprise Act Amendments 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.

               TITLE VI--COMMUNITY DEVELOPMENT TASK FORCE

SEC. 601. TASK FORCE.

    (a) In General.--The President shall appoint a community 
development task force to review the progress being made by the 
appropriate Federal agencies and instrumentalities in implementing the 
policies and programs established by this Act and amendments made by 
this Act and the Bank Enterprise Act of 1991.
    (b) Report.--The community development task force appointed under 
subsection (a) shall submit a report to the Congress by the end of the 
2-year period beginning on the date of the enactment of this Act 
containing a detailed summary of the task force's findings in 
connection with the review conducted under subsection (a) and such 
recommendations for legislative or administrative action as the task 
force may determine to be appropriate.
    (c) Chairperson.--The chairman of the Neighborhood Reinvestment 
Corporation shall serve as the chairperson of the community development 
task force.

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