‘‘(i) In considering any loan to a
microenterprise, the lender takes into ac-
count—
‘‘(I) the creditworthiness of any
person 
who 
controls 
the
microenterprise in lieu of the credit-
worthiness of the enterprise;
‘‘(II) 
in 
the 
case 
of 
a
microenterprise which is a startup
business, whether the microenterprise
is soundly conceived; and
‘‘(III) 
the 
need 
of 
the
microenterprise for expansion capital.
‘‘(ii) The lender accepts as collateral
for the loan a security interest in any per-
sonal property of any person who controls
the microenterprise which consists of
consumer or household goods.
‘‘(iii) The lender does not require col-
lateral or a secured interest for more than
50 percent of the face amount of the loan.
‘‘(iv) The loans are made in amounts
not less than $100 and not more than
$10,000 to persons who would not other-
wise qualify for a commercial loan.
‘‘(v) The lender provides technical as-
sistance, training, and counseling in busi-
ness practices, such as accounting, market-
ing, management, financial practices, and
general business practices and sales, to the
microenterprise in connection with the loan
and closely monitors the microenterprise,
including the enterprise’s loan repayment
performance.
‘‘(B) LENDER DEFINED.—For purposes of
subparagraph (A), the term ‘lender’ means—
‘‘(i) in the case of a microenterprise
loan by a savings association to a
microenterprise, the savings association;
and
‘‘(ii) in the case of a microenterprise
loan by a microenterprise intermediary to
a 
microenterprise, 
the 
microenterprise
intermediary.’’.
SEC. 6. USE OF CDBG ASSISTANCE FOR ADMINISTRATIVE
COSTS 
OF 
ENTITIES 
ASSISTING
MICROENTERPRISES.
Section 105(a)(23) of the Housing and Community
Development Act of 1974 (42 U.S.C. 5305(a)(23)) is
amended by adding at the end the following flush material:
‘‘assistance provided to such entities under this
paragraph may be used for reasonable administra-
tive and operating costs of such entities related to
facilitating economic development through activities
under subparagraphs (A) through (C);’’.
SEC. 7. ESTABLISHMENT OF MICROENTERPRISE DIVISION
IN EACH FEDERAL BANKING AGENCY.
(a) IN GENERAL.—Each Federal banking agency (as
defined in section 3(z) of the Federal Deposit Insurance
Act) shall establish a division to be known as the
‘‘Microenterprise Technical and Operations Office’’ to pro-
mote microenterprises by offering technical assistance,
training, outreach, and other support to groups and indi-
viduals 
engaged 
in, 
or 
desiring 
to 
establish, 
a
microenterprise or an institution which offers credit or fi-
nancial services to microenterprises.
(b) DUTIES OF MICROENTERPRISE DIVISION.—The
Microenterprise Technical and Operations Office of each
Federal banking agency shall—
(1) facilitate the creation and financing of
microenterprises by—
(A) collecting information relating to
microenterprises, including the ownership char-
acteristics of microenterprises and the perform-
ance of microenterprises by industry;
(B) providing such information without
charge to interested persons; and
(C) generally serving as a clearinghouse
for information relating to microenterprises;
and
(2) monitor and provide assistance to the
microenterprise divisions established pursuant to
section 34 of the Federal Deposit Insurance Act.
(a) MICROENTERPRISE DEFINED.—As used in this
section, the term ‘‘microenterprise’’ means any commer-
cial enterprise with 5 or fewer employees, 1 or more of
whom own the enterprise.
SEC. 8. STUDY.
(a) AVAILABILITY
OF CREDIT
FOR SMALL BUSI-
NESSES
WHICH
ARE
LARGER
THAN
MICROENTERPRISES.—The Financial Institutions Exam-
ination Council shall conduct a study before the end of
the 2-year period beginning on the date of the enactment
of this Act, based on the agency’s experience in admin-
istering the microenterprise loan provisions of this Act,
and the amendments made by this Act, on the best means
to make credit available for small businesses which—
(1) do not qualify for microenterprise loans or
need credit in larger amounts than is available
through microenterprise loans; and
(2) need credit in smaller amounts than is gen-
erally available from financial institutions or the
Small Business Administration.
(b) RECOMMENDATIONS AND REPORT.—The Finan-
cial Institutions Examination Council shall submit a re-
port to the Congress before the end of the 2-year period
referred to in subsection (a) containing the findings and
conclusions of the agency in connection with the study
conducted pursuant to subsection (a) and such rec-
ommendations for legislative and administrative action as
the agency may determine to be appropriate.
Æ
HR 1019 IH——2