Small Business Lending and Economic Inequality Reduction Act of 2015

To make the Community Advantage Pilot Program of the Small Business Administration permanent, and for other purposes. 1. Short title This Act may be cited as the Small Business Lending and Economic Inequality Reduction Act of 2015 2. Community advantage program (a) In general Section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) (35) Community advantage program (A) Definitions In this paragraph— (i) the term covered institution (I) a development company (as defined in section 103 of the Small Business Investment Act of 1958 ( 15 U.S.C. 662 15 U.S.C. 695 et seq. (II) a nonprofit intermediary (as defined in subsection (m)(11)); (III) a non-Federally regulated entity certified as a community development financial institution by the Community Development Financial Institutions Fund established under section 104(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4703(a) (IV) any other nonprofit organization approved by the Small Business Administration; (ii) the term program (iii) the term Reservist (iv) the term service-connected (v) the term small business concern in an underserved market (I) that is located in— (aa) a low- or moderate-income community; (bb) a HUBZone; or (cc) a community that has been designated as an empowerment zone or an enterprise community under section 1391 (II) that has more than 50 percent of employees residing in a low- or moderate-income community; (III) that has been in existence for not more than 2 years on the date on which a loan is made to the small business concern under the Community Advantage Program established under subparagraph (B); (IV) owned and controlled by veterans; (V) owned and controlled by service-disabled veterans; or (VI) not less than 51 percent of which is owned and controlled by 1 or more— (aa) members of the Armed Forces participating in the Transition Assistance Program of the Department of Defense; (bb) Reservists; (cc) spouses of veterans, members of the Armed Forces, or Reservists; or (dd) surviving spouses of veterans who died on active duty or as a result of a service-connected disability. (B) Establishment There is established a Community Advantage Program, under which the Administration may guarantee loans made by covered institutions under this subsection, including loans made to small business concerns in underserved markets. (C) Requirements Not less than 60 percent of loans made by a covered institution under the program shall consist of loans made to small business concerns in underserved markets under the program. (D) Maximum loan amount The maximum loan amount under the program is $350,000. (E) Regulations (i) In general Not later than 1 year after the date of enactment of this paragraph, the Administrator shall promulgate regulations to carry out the program, which shall be substantially similar to the Community Advantage Pilot Program of the Administration, as in effect on the day before the date of enactment of this paragraph. (ii) Pilot program Beginning on the date on which the regulations promulgated by the Administrator under clause (i) take effect, the Administrator may not carry out the Community Advantage Pilot Program of the Administration. . (b) Technical and conforming amendment Section 3(r) of the Small Business Act ( 15 U.S.C. 632(r) (1) in paragraph (1), by inserting before the period at the end the following: , but does not include a covered institution, as defined in section 7(a)(35)(A) (2) in paragraph (2)— (A) in the matter preceding subparagraph (A), by striking means a business concern — (A) means a business concern if— ; (B) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively, and adjusting the margins accordingly; (C) in subparagraph (A)(iii), as so redesignated, by striking the period at the end and inserting ; and (D) by adding at the end the following: (B) does not include a covered institution, as defined in section 7(a)(35)(A). . 3. Expanding the purposes of advances and collateral available to community development financial institutions Section 10(a) of the Federal Home Loan Bank Act ( 12 U.S.C. 1430(a) (1) in paragraph (2)(B), by inserting or community development financial institution (as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4702 community financial institution (2) in paragraph (3)(E), by inserting or community development financial institution (as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4702 community financial institution

Summary: Small Business Lending and Economic Inequality Reduction Act of 2015 This bill amends the Small Business Act to establish a Community Advantage Program, under which the Small Business Administration (SBA) may guarantee loans up to $350,000 made by specified kinds of institutions, including: development companies eligible for the state and local development company program, nonprofit intermediaries, non-federally regulated entities certified as community development financial institutions, and any other SBA-approved nonprofit organizations. At least 60% of these loans must be made to businesses in certain underserved markets, such as low- or moderate-income communities, HUBZones, empowerment zones, or enterprise communities. The SBA must promulgate regulations for this Program, which shall be substantially similar to its Community Advantage Pilot Program, which shall terminate when these regulations take effect. The Federal Home Loan Bank Act is amended to authorize Federal Home Loan Banks to make long-term secured advances to their members to provide funds to community development financial institutions. At the time of origination or renewal of a loan or advance, a Bank must obtain and maintain a security interest in collateral eligible pursuant to any secured loan for any community development financial institution.