I 
114TH CONGRESS 
2D SESSION 
H. R. 5113 
To encourage initiatives for financial products and services that are appro-
priate and accessible for millions of American small businesses that 
do not have access to the financial mainstream. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 28, 2016 
Mrs. CAROLYN B. MALONEY of New York (for herself, Ms. VELA´ZQUEZ, Ms. 
HAHN, Mr. VARGAS, Mr. RANGEL, Ms. MOORE, Mr. JOHNSON of Geor-
gia, Ms. CLARKE of New York, Mr. HINOJOSA, Ms. NORTON, Mr. 
HONDA, and Mr. RICHMOND) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
A BILL 
To encourage initiatives for financial products and services 
that are appropriate and accessible for millions of Amer-
ican small businesses that do not have access to the 
financial mainstream. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Investing in America’s 
Small Businesses Act of 2016’’. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
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(1) Small businesses in underserved areas have 
for generations been unable to access affordable 
credit. 
(2) A 2013 report commissioned by the U.S. 
Small Business Administration shows the major con-
straint limiting the growth, expansion, and wealth 
creation of small firms—especially women- and mi-
nority-owned businesses—is inadequate capital. 
(3) Small businesses revitalize communities by 
creating jobs, and also contribute to the local tax 
base, which helps finance investments in schools, 
hospitals, infrastructure, and public safety. 
(4) A 2015 report from the Carsey School of 
Public Policy at the University of New Hampshire 
found that 79 percent of CDFI loan volume went to 
borrowers from underserved populations. 
(5) During the financial crisis, CDFI loan 
funds expanded their activity to meet increased de-
mand from borrowers that could not access tradi-
tional lending. From 2006 to 2009, the median fund 
deployment ratio grew 3.1 percent annually. 
(6) After Superstorm Sandy, CDFIs launched 
disaster recovery loan programs and reached out to 
affected businesses and organizations to provide 
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credit to help grocery stores and social service orga-
nizations re-open to help communities in need. 
(7) A 2014 report by the Dardin School of 
Business at the University of Virginia found that de-
spite serving predominately low-income markets, 
CDFI banks and credit unions had virtually the 
same level of performance as mainstream financial 
institutions. 
SEC. 3. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 
FUNDS FOR SMALL BUSINESS LENDING. 
(a) IN GENERAL.—The Community Development 
Banking and Financial Institutions Act of 1994 (12 
U.S.C. 4701 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 123. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 
FUNDS FOR SMALL BUSINESS LENDING. 
‘‘(a) PURPOSES.—The purposes of this section are— 
‘‘(1) to make financial assistance available from 
the Fund in order to help community development 
financial institutions defray the costs of operating 
small business loan programs, by providing the 
amounts necessary for such institutions to establish 
their own loan loss reserve funds to mitigate some 
of the losses on such small business loan programs; 
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‘‘(2) to encourage community development fi-
nancial institutions to establish and maintain small 
business loan programs that would help provide bor-
rowers access to mainstream financial institutions 
and combat high cost small business lending; and 
‘‘(3) to encourage community development fi-
nancial institutions to expand the development serv-
ices they offer and to serve new investment areas 
and new targeted populations. 
‘‘(b) GRANTS.— 
‘‘(1) LOAN-LOSS RESERVE FUND GRANTS.— 
‘‘(A) IN GENERAL.—The Fund shall make 
grants to community development financial in-
stitutions to enable such institutions to estab-
lish a loan-loss reserve fund in order to defray 
the costs of a small business loan program es-
tablished or maintained by such institution. 
‘‘(B) APPLICATION.—A community devel-
opment financial institution that wishes to re-
ceive a grant under this paragraph shall submit 
an application to the Administrator in such 
form and manner and containing such informa-
tion as the Administrator may require. 
‘‘(C) MATCHING REQUIREMENT.—A com-
munity development financial institution shall 
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provide non-Federal matching funds in an 
amount equal to 50 percent of the amount of 
any grant received under this paragraph. 
‘‘(D) USE OF FUNDS.—Any grant amounts 
received by a community development financial 
institution under this paragraph— 
‘‘(i) may not be used by such institu-
tion to provide direct loans to small busi-
nesses; 
‘‘(ii) may be used by such institution 
to help recapture a portion or all of a de-
faulted loan made under the small business 
loan program of such institution on or 
after the date of the enactment of this sec-
tion; and 
‘‘(iii) may be used to designate and 
utilize a fiscal agent for services normally 
provided by such an agent. 
‘‘(2) TECHNICAL ASSISTANCE GRANTS.— 
‘‘(A) IN GENERAL.—The Fund shall make 
technical assistance grants to community devel-
opment financial institutions to create, support, 
or maintain a small business loan program. Any 
grant amounts received under this paragraph 
may be used for— 
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‘‘(i) technology, staff support, staff 
capacity building, and other costs associ-
ated with establishing, supporting, or 
maintaining a small business loan pro-
gram; and 
‘‘(ii) 
establishing, 
supporting, 
or 
maintaining technical assistance programs 
for borrowers. 
‘‘(B) APPLICATION.—A community devel-
opment financial institution that wishes to re-
ceive a grant under this paragraph shall submit 
an application to the Administrator in such 
form and manner and containing such informa-
tion as the Administrator may require. 
‘‘(c) REPORTS.—For each fiscal year for which 
grants are made under this section, the Administrator 
shall submit a report to the Committee on Financial Serv-
ices of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate 
containing a description of the activities funded and 
amounts distributed under this section for such fiscal year, 
as well as measurable results of such actions. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.— 
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‘‘(1) IN GENERAL.—There are authorized to be 
appropriated to the Fund $25,000,000 for each of 
fiscal years 2017 to 2022 to carry out this section. 
‘‘(2) ADMINISTRATIVE COSTS.—There are au-
thorized to be appropriated to the Fund $2,000,000 
for each of fiscal years 2017 to 2022 for the admin-
istrative costs of carrying out this section. 
‘‘(e) DEFINITIONS.—For purposes of this section: 
‘‘(1) SMALL BUSINESS.—The term ‘small busi-
ness’ has the meaning given the term ‘small business 
concern’ under section 3(a) of the Small Business 
Act (15 U.S.C. 632(a)). 
‘‘(2) SMALL BUSINESS LOAN PROGRAM.—The 
term ‘small business loan program’ means a loan 
program wherein a community development financial 
institution offers loans to small businesses that— 
‘‘(A) are made in amounts not exceeding 
$50,000; 
‘‘(B) have no pre-payment penalty; and 
‘‘(C) meet any other affordability require-
ments as may be established by the Adminis-
trator.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents for the Riegle Community Development and Regu-
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latory Improvement Act of 1994 is amended by inserting 
after the item relating to section 121 the following: 
‘‘Sec. 122. Grants to establish loan-loss reserve funds. 
‘‘Sec. 123. Grants to establish loan-loss reserve funds for small business lend-
ing.’’. 
Æ 
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