I 
117TH CONGRESS 
1ST SESSION H. R. 3323 
To strengthen the ability of the Federal Home Loan Bank system to provide 
critical financing to address the economic crisis caused by the COVID– 
19 and to meet the short- and long-term housing and community eco-
nomic development needs of low-income communities, including Tribal 
communities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 18, 2021 
Mr. TORRES of New York introduced the following bill; which was referred 
to the Committee on Financial Services, and in addition to the Commit-
tees on Ways and Means, and Small Business, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To strengthen the ability of the Federal Home Loan Bank 
system to provide critical financing to address the eco-
nomic crisis caused by the COVID–19 and to meet the 
short- and long-term housing and community economic 
development needs of low-income communities, including 
Tribal communities, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Federal Home Loan 
Banks’ Mission Implementation Act’’. 
SEC. 2. PURPOSE. 
The purpose of this Act is to promote economic recov-
ery in response to the COVID–19 pandemic and to meet 
the short- and long-term housing and community eco-
nomic development needs of low-income communities, in-
cluding Tribal communities, by— 
(1) increasing the ability of the Federal Home 
Loan Banks to accept, as collateral, small business 
loans guaranteed by the Small Business Administra-
tion; 
(2) authorizing the Federal Home Loan Banks 
to accept government guaranteed loans as collateral 
to support COVID–19 programs; 
(3) allowing community development financial 
institutions and credit unions to pledge community 
financial institution collateral, such as small busi-
ness, small agriculture, and community development 
loans, and enable the Federal Housing Finance 
Agency to raise the threshold for qualification as a 
community financial institution; 
(4) providing letters of credit to provide liquid-
ity, and support, stabilize and strengthen local, Trib-
al, State and Federal governmental entities public 
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unit deposits, housing and community development 
efforts, and vital public financing; 
(5) increasing funding for the Affordable Hous-
ing Program established by each Federal Home 
Loan Bank under section 10(j) of the Federal Home 
Loan Bank Act (12 U.S.C. 1430(j)) and establishing 
a 2-percent set aside for Native American Tribes; 
and 
(6) creating a community economic development 
investment program within the Federal Home Loan 
Bank system to generate financial opportunity, cre-
ate jobs, and stimulate economic development in dis-
tressed urban, rural, Tribal, and suburban commu-
nities in the United States. 
SEC. 3. FHLB ADVANCES SECURED BY SBA LOANS. 
Section 7 of the Small Business Act (15 U.S.C. 636) 
is amended by adding at the end the following: 
‘‘(o) FEDERAL HOME LOAN BANK ADVANCES.— 
‘‘(1) DEFINITION
OF
BANK.—In this sub-
section, the term ‘Bank’ means a Federal Home 
Loan Bank, as defined in section 2 of the Federal 
Home Loan Bank Act (12 U.S.C. 1422). 
‘‘(2) ADVANCES.—A Bank that, in the exercise 
of its authority under section 10 of the Federal 
Home Loan Bank Act (12 U.S.C. 1430) to make se-
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cured advances, accepts as collateral a loan guaran-
teed by the Administration under this Act or any 
other provision of law, including loans guaranteed 
under section 7(a)— 
‘‘(A) may exercise all of the rights and 
remedies contained in any pledge or similar se-
curity agreement between the Bank and the 
lending or participating institution that made 
or purchased the loan; and 
‘‘(B) in the event of default on the loan, 
shall possess the same rights and remedies as 
such a lending or participating institution 
would possess in the same circumstance, includ-
ing collecting monies due on the guarantee di-
rectly from the Administration. 
‘‘(3) TRANSFER OF GUARANTEE.—With respect 
to a guaranteed loan that a Bank accepts as collat-
eral under paragraph (2), the guarantee obligation 
of the Administration on the loan shall transfer to 
the Bank.’’. 
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SEC. 4. MAKING GOVERNMENT GUARANTEED LOANS IN RE-
SPONSE TO THE COVID–19 CRISIS ELIGIBLE 
COLLATERAL FOR THE FEDERAL HOME LOAN 
BANKS. 
Section 10(a)(3) of the Federal Home Loan Bank 
Act (12 U.S.C. 1430(a)(3)) is amended by adding at the 
end the following: 
‘‘(F) Loans guaranteed or insured by the 
United States Government or any agency there-
of and made by any member under programs or 
facilities established by the Secretary of the 
Treasury or the Board of Governors of the Fed-
eral Reserve System under the CARES Act 
(Public Law 116–136) or other similar pro-
grams or facilities in subsequently enacted Acts 
to address the impact to the economy from the 
COVID–19 crisis, including other similar pro-
grams or facilities established under section 
13(3) of the Federal Reserve Act (12 U.S.C. 
343(3)). 
‘‘(G) Loans guaranteed by the Small Busi-
ness Administration under the Small Business 
Act (15 U.S.C. 631 et seq.) or any other provi-
sion of law.’’. 
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SEC. 5. ADDING CREDIT UNIONS TO THE DEFINITION OF 
COMMUNITY FINANCIAL INSTITUTIONS AND 
EXPANDING THE PURPOSES OF ADVANCES 
AND COLLATERAL AVAILABLE TO CERTAIN 
COMMUNITY DEVELOPMENT FINANCIAL IN-
STITUTIONS. 
(a) IN GENERAL.—Section 10(a) of the Federal 
Home Loan Bank Act (12 U.S.C. 1430(a)) is amended— 
(1) in paragraph (2)(B), by inserting ‘‘or quali-
fying community development financial institution’’ 
after ‘‘community financial institution’’; and 
(2) in paragraph (3)(E), by inserting ‘‘or quali-
fying community development financial institution’’ 
after ‘‘community financial institution’’. 
(b) DEFINITIONS.—Section 2 of the Federal Home 
Loan Bank Act (12 U.S.C. 1422) is amended— 
(1) in paragraph (10)— 
(A) by striking ‘‘INSTITUTION.—’’ and all 
that follows through ‘‘The term’’ and inserting 
‘‘INSTITUTION.—The term’’; 
(B) by striking subparagraph (B); 
(C) by redesignating clauses (i) and (ii) as 
subparagraphs (A) and (B), respectively, and 
adjusting the margins accordingly; 
(D) in subparagraph (A), as so redesig-
nated, by inserting ‘‘(12 U.S.C. 1811 et seq.) 
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or the Federal Credit Union Act (12 U.S.C. 
1751 et seq.)’’ before the semicolon; and 
(E) in subparagraph (B), as so redesig-
nated, by striking ‘‘$1,000,000,000’’ and insert-
ing ‘‘assets at a level set by the Agency, but not 
more than $10,000,000,000’’; and 
(2) by adding at the end the following: 
‘‘(13) QUALIFYING COMMUNITY DEVELOPMENT 
FINANCIAL
INSTITUTION.—The term ‘qualifying 
community development financial institution’ means 
an entity that— 
‘‘(A) has been certified as a community de-
velopment financial institution (as such term is 
defined in section 103 of the Riegle Community 
Development and Regulatory Improvement Act 
of 1994 (12 U.S.C. 4702) by the Secretary of 
the Treasury; and 
‘‘(B) satisfies the average total assets 
threshold requirement for a community finan-
cial institution set forth in paragraph (10).’’. 
SEC. 6. STANDBY LETTERS OF CREDIT. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 
et seq.) is amended— 
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(1) in section 2 (12 U.S.C. 1422), as amended 
by section 5 of this Act, is amended by adding at 
the end the following: 
‘‘(14) EMPLOYEE- OR COMMUNITY-OWNED COM-
PANY.—The term ‘employee- or community-owned 
company’ means— 
‘‘(A) an organization described in section 
1381 of the Internal Revenue Code of 1986; 
‘‘(B) an eligible worker-owned cooperative, 
as defined in section 1042(c)(2) of the Internal 
Revenue Code of 1986; and 
‘‘(C) an employee stock ownership plan, as 
defined in section 4975(e)(7) of the Internal 
Revenue Code of 1986, which meets the re-
quirements of section 409 of such Code.’’; and 
(2) in section 11 (12 U.S.C. 1431), by adding 
at the end the following: 
‘‘(m) STANDBY LETTERS OF CREDIT.— 
‘‘(1) IN GENERAL.—Each Federal Home Loan 
Bank is authorized to issue and confirm standby let-
ters of credit, secured by collateral eligible to secure 
advances, to support any activity permitted under 
law or regulation applicable to the member or non- 
member mortgagee eligible to receive advances under 
section 10b, subject to safety and soundness over-
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sight, including the purposes described in paragraph 
(2). 
‘‘(2) PURPOSES.—Each Bank is authorized to 
issue or confirm on behalf of members or non-mem-
ber mortgagees standby letters of credit that comply 
with the requirements of this subsection for any of 
the following purposes: 
‘‘(A) To assist members or non-member 
mortgagees in facilitating residential housing fi-
nance. 
‘‘(B) To assist members or non-member 
mortgagees in facilitating community lending. 
‘‘(C) To assist members or non-member 
mortgagees with asset or liability management. 
‘‘(D) To provide members or non-member 
mortgagees with liquidity or other funding. 
‘‘(E) To assist members in facilitating 
business retention or facilitating business tran-
sition to employee- or community-owned compa-
nies or assisting those companies.’’. 
SEC. 7. LETTERS OF CREDIT ON TAX EXEMPT BONDS. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
149(b)(3)(A) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘a bond during the period beginning 
on the date of the enactment of this clause and ending 
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on December 31, 2010’’ and inserting ‘‘a municipal bond 
(as defined in section 75(b)(1)) on or after the date of 
enactment of the Federal Home Loan Banks’ Mission Im-
plementation Act’’. 
(b) SAFETY
AND SOUNDNESS REQUIREMENTS.— 
Subparagraph (E) of section 149(b)(3) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘which are 
at least’’ and all that follows through the period and in-
serting ‘‘as are established by the Director of the Federal 
Housing Finance Agency from time to time.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to guarantees made after the date 
of enactment of this Act. 
(d) SUNSET.—Effective on the date that is 2 years 
after the date on which the Federal Emergency Manage-
ment Agency terminates the emergency declared on March 
13, 2020 by the President under the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 
4121 et seq.) relating to the Coronavirus Disease 2019 
(COVID–19) pandemic, section 149(b)(3) of the Internal 
Revenue Code of 1986 is amended— 
(1) in subparagraph (A)(iv), by striking ‘‘a mu-
nicipal bond (as defined in section 75(b)(1)) on or 
after the date of enactment of the Federal Home 
Loan Banks’ Mission Implementation Act’’ and in-
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serting ‘‘a bond during the period beginning on the 
date of the enactment of this clause and ending on 
December 31, 2010’’; and 
(2) in subparagraph (E), by striking ‘‘as are es-
tablished by the Director of the Federal Housing Fi-
nance Agency from time to time’’ and inserting 
‘‘which are at least as stringent as such require-
ments which apply under regulations applicable to 
such guarantees by Federal home loan banks as in 
effect on April 9, 2008’’. 
SEC. 8. AFFORDABLE HOUSING PROGRAM. 
(a) IN GENERAL.—Section 10 of the Federal Home 
Loan Bank Act (12 U.S.C. 1430) is amended— 
(1) in subsection (j)— 
(A) in paragraph (3)— 
(i) in the matter preceding subpara-
graph (A), by striking ‘‘such as the fol-
lowing:’’ and inserting ‘‘such as—’’; 
(ii) in subparagraph (A)— 
(I) by inserting ‘‘the’’ before 
‘‘purchase’’; and 
(II) by striking the comma at the 
end and inserting a semicolon; 
(iii) in subparagraph (B)— 
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(I) by inserting ‘‘the’’ before 
‘‘purchase’’; and 
(II) by striking ‘‘and’’ at the end; 
(iv) in subparagraph (C)— 
(I) by inserting ‘‘the’’ before 
‘‘purchase’’; and 
(II) by striking the period at the 
end and inserting a semicolon; and 
(v) by adding at the end the following: 
‘‘(D) the purchase or rehabilitation of 
housing financed by a community land trust; 
and 
‘‘(E) the purchase or rehabilitation of 
housing in qualified manufactured home com-
munities owned by nonprofit organizations or 
the residents.’’; and 
(B) in paragraph (5)(C)— 
(i) by striking ‘‘10’’ and inserting 
‘‘20’’; 
(ii) by striking ‘‘100,000,000’’ and in-
serting ‘‘200,000,000’’; and 
(iii) by adding at the end the fol-
lowing: ‘‘Of such contribution, an amount 
equal to not less than 2 percent of 20 per-
cent of the preceding year’s net income 
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shall be used to support subsidized grants 
or advances through the Affordable Hous-
ing Program benefitting federally recog-
nized Indian Tribes and communities, 
which includes awards outside of the dis-
trict of a Bank.’’. 
(b) DEFINITIONS.—Section 2 of the Federal Home 
Loan Bank Act (12 U.S.C. 1422), as amended by section 
6 of this Act, is amended by adding at the end the fol-
lowing: 
‘‘(16) 
MANUFACTURED
HOME.—The 
term 
‘manufactured home’ has the meaning given the 
term in section 603 of the National Manufactured 
Housing Construction and Safety Standards Act of 
1974 (42 U.S.C. 5402). 
‘‘(17) QUALIFIED MANUFACTURED HOME COM-
MUNITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
manufactured home community’ means— 
‘‘(i) a cooperative controlled by resi-
dents or a nonprofit or municipal housing 
corporation established pursuant to the 
laws of the State in which the property 
used as a manufactured home community 
is located; and 
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members or nonmember mortgagees eligible to 
receive advances under section 10b to provide 
projects targeted to certain economic develop-
ment activities and specific beneficiaries, includ-
ing certain geographic areas and at certain tar-
geted income levels established by the Bank 
with the prior approval of Director; and 
‘‘(B) shall provide targeted community eco-
nomic development grants and lending. 
‘‘(2) MIXED-USE PROJECTS.—With respect to a 
project funded under a program established under 
this subsection involving a combination of housing 
projects and economic development projects, only the 
economic development components of the project 
shall be required to meet the appropriate targeted 
income level for the program. 
‘‘(3) PRICING
AND
AVAILABILITY
OF
AD-
VANCES.—A Bank shall price advances to members 
under this subsection as provided in section 1266.5 
of title 12, Code of Federal Regulations, or any suc-
cessor regulation, and may price such advances at 
rates below the price of advances of similar amounts, 
maturities, and terms made pursuant to subsection 
(a). 
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‘‘(4) ADVANCES TO NON-MEMBER MORTGAGEES 
ELIGIBLE TO RECEIVE ADVANCES.— 
‘‘(A) IN GENERAL.—A Bank may offer ad-
vances under a program established under this 
subsection to non-member mortgagees eligible 
to receive advances under subsection (b) at the 
Bank’s option. 
‘‘(B) PRICING.—A Bank shall price ad-
vances under this paragraph to non-member 
mortgagees eligible to receive advances under 
section 10b as provided in section 1266.17 of 
title 12, Code of Federal Regulations, or any 
successor regulation, and may price such ad-
vances at rates below the price of advances of 
similar amounts, maturities, and terms made 
pursuant to section 10b. 
‘‘(5) PRICING
PASS-THROUGH.—A Bank may 
require that borrowers receiving advances made 
under a program established under this subsection 
pass through the benefit of any price reduction from 
regular advance pricing to borrowers of the Bank. 
‘‘(6) DISCOUNT FUND.— 
‘‘(A) IN GENERAL.—A Bank may establish 
a discount fund that the Bank may use to re-
duce the price of advances made under a pro-
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gram established under this subsection below 
the advance prices provided for by part 1292 of 
title 12, Code of Federal Regulations, or any 
successor regulation. 
‘‘(B) FAIR DISTRIBUTION SCHEME.—Price 
reductions made through a discount fund under 
subparagraph (A) shall be made in accordance 
with a fair distribution scheme. 
‘‘(7) 
COMMUNITY
ECONOMIC
DEVELOPING 
GRANTS AND LENDING.— 
‘‘(A) DEFINITIONS.—In this paragraph: 
‘‘(i) ELIGIBLE ENTITY.—The term ‘el-
igible entity’ means— 
‘‘(I) a locally owned nonprofit or-
ganization 
described 
in 
section 
501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from tax-
ation under section 501(a) of such 
Code or a community development 
corporation— 
‘‘(aa) that has experience in 
developing and managing eco-
nomic development projects; 
‘‘(bb) that is governed by a 
board of directors consisting of 
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residents of the community and 
business and civic leaders; and 
‘‘(cc) the principal purpose 
of which is to plan, develop, or 
manage low-income housing or 
community development projects; 
‘‘(II) a non-depository commu-
nity development financial institution, 
as defined in section 103 of the Riegle 
Community Development and Regu-
latory Improvement Act of 1994 (12 
U.S.C. 4702), that is certified by the 
Community Development Financial 
Institutions 
Fund 
under 
section 
1805.201 of title 12, Code of Federal 
Regulations, or any successor regula-
tion; 
‘‘(III) a federally recognized In-
dian Tribe or community; or 
‘‘(IV) a regional or national non-
profit community development or co-
operative development intermediary. 
‘‘(ii) LOW-INCOME COMMUNITY.—The 
term ‘low-income community’ has the 
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meaning given the term in section 45D(e) 
of the Internal Revenue Code of 1986. 
‘‘(iii) RURAL COMMUNITY.—The term 
‘rural community’ means a city, town, or 
Census Designated Place with a population 
of not more than 20,000, according to the 
most recent decennial census conducted by 
the Bureau of the Census. 
‘‘(iv) 
VERY
LOW-INCOME
HOUSE-
HOLD.—The term ‘very low-income house-
hold’ means a household with an income 
that is not greater than 50 percent of the 
area median income. 
‘‘(B) REQUIREMENT.—Each Bank shall 
establish a program to provide grants or sub-
sidize the interest rate on advances to members 
engaged in lending to eligible entities for eco-
nomic development activities that serve low-in-
come or rural communities. 
‘‘(C) USE OF FUNDS.—The entire amount 
of a grant or subsidized advance provided under 
this paragraph— 
‘‘(i) shall benefit the communities as-
sisted by the recipient of the grant or sub-
sidized advance; 
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‘‘(ii) shall not be used for the purpose 
of financial education or to support a 
sports stadium or arena; and 
‘‘(iii) shall provide at least 2 percent 
of grants or advance funds to benefit fed-
erally recognized Indian Tribes or commu-
nities, which may include a Bank providing 
grants or advance funds outside of the dis-
trict of the Bank. 
‘‘(D) 
ELIGIBLE
ACTIVITIES.—Economic 
development activities that are eligible to be 
carried out under this paragraph include— 
‘‘(i) providing grants and equity in-
vestments, including those that capitalize a 
revolving loan fund of a Treasury-certified 
non-depository community development fi-
nancial institution for eligible economic de-
velopment activities similar to the author-
ity provided within the Affordable Housing 
Program under subsection (j); 
‘‘(ii) providing awards consistent with 
awards provided under section 680 of the 
Community Block Grant Act (42 U.S.C. 
9921); 
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‘‘(iii) financing business transitions to 
worker-owned cooperatives or financing the 
sales of business assets to employees or 
community stakeholders that preserve jobs 
in low- and moderate-income communities; 
‘‘(iv) financing capital expenditures, 
such as the purchase of equipment or real 
property for nonprofit organizations, in-
cluding child care or health care facilities 
in low-income communities, that provide 
service to low-income households; 
‘‘(v) financing operating expenses for 
nonprofit community development organi-
zations engaged in community economic 
development activities benefitting very low- 
income households; 
‘‘(vi) water, road, broadband, clean 
energy, or municipal infrastructure invest-
ments, including investments to address 
climate change, in Native American tribal 
lands and economically distressed rural 
communities; 
‘‘(vii) providing community facilities 
or infrastructure, including public transit, 
green space consisting of parks with trees 
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and shrubbery, heat-reflecting road and 
sidewalk upgrades, tornado shelters, public 
restrooms, or environmental cooling loca-
tions accessible to the public in low-income 
communities; and 
‘‘(viii) any other activity established 
by the Director in consultation with Con-
gress, the Federal Home Loan Banks and 
their housing advisory councils, and the 
public. 
‘‘(E) PRIORITIES
FOR
MAKING
GRANTS 
AND
ADVANCES.—In using amounts provided 
under this paragraph, each Bank member shall 
give priority to qualified projects such as— 
‘‘(i) grants or advances for mixed-use 
housing developments that provide eco-
nomic activity and affordable housing for 
low-income and rural communities; 
‘‘(ii) grants or advances for child care 
facilities that serve low-income households; 
‘‘(iii) grants or advances for programs 
that provide economic opportunities for 
formerly incarcerated individuals; 
‘‘(iv) grants or advances that enable 
conversion to employee- or community- 
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owned companies or financing the sales of 
business assets to employees or community 
stakeholders; 
‘‘(v) grants or advances to established 
regional and national intermediary organi-
zations that already receive Federal funds 
and have the capacity to deliver economic 
development activities to low-income house-
holds; and 
‘‘(vi) any other priority established by 
the Agency in consultation with the Banks, 
Bank members, housing advisory councils 
of the Banks, Congress, and the public. 
‘‘(F) REQUIREMENTS
FOR
PROJECTS
IN 
RURAL
COMMUNITIES.—With respect to a 
project carried out by an eligible entity in a 
rural community under this paragraph— 
‘‘(i) not less than 51 percent of the 
population served by the project shall re-
side in the rural community; 
‘‘(ii) the projects shall primarily serve 
and benefit rural residents and commu-
nities; and 
‘‘(iii) the rural community shall be 
within the jurisdiction of the eligible entity. 
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‘‘(G) REPORT.—Each member receiving a 
grant or advance under this paragraph shall re-
port annually to the Bank making the grant or 
advance concerning the use by the member of 
the grant or advance. 
‘‘(H) CONTRIBUTION TO PROGRAM.—Each 
Bank shall annually contribute 10 percent of 
the preceding year’s net income, or such pro-
rated sums as may be required to ensure that 
the aggregate contribution of the Banks shall 
not be less than $100,000,000 for each such 
year, to support grants and subsidized advances 
made under this paragraph.’’. 
Æ 
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