I
103D CONGRESS
1ST SESSION
H. R. 238
To promote community development lending by financial institutions in
economically distressed areas.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. LEACH introduced the following bill; which was referred to the Committee
on Banking and Finance
A BILL
To promote community development lending by financial
institutions in economically distressed areas.
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 shall be cited as the ‘‘Community Develop-
ment Banking Act of 1993’’.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds that:
(1) Many small and medium size businesses,
low- to moderate-income individuals and economi-
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cally 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 re-
investment.
(3) The best way to address problems of de-
pressed economies in inner cities, rural areas, and
other underserved communities is by empowering
local residents through technical assistance and mar-
ket incentives for pooling local resources.
(4) There is a need to provide existing regu-
lated financial institutions with incentives to provide
these groups with adequate access to credit and pri-
vate capital without compromising safety and sound-
ness.
(5) There is a need to encourage other private
sector institutions, such as community development
banks, community development corporations, com-
munity development credit unions and small busi-
ness investment corporations to provide these groups
with adequate access to credit and private capital
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without the creation of an additional Federal bu-
reaucracy and without exposing taxpayers to unnec-
essary risk.
(6) There is a need for the Administration to
complete implementing guidelines for existing initia-
tives, 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 size businesses, low- and moderate-in-
come individuals and economically distressed areas with
adequate access to credit and private capital by providing
incentives to regulated financial institutions and other pri-
vate sector institutions.
TITLE I—BANK COMMUNITY
DEVELOPMENT INCENTIVES
SEC. 101. CRA CREDIT FOR COMMUNITY INVESTMENTS.
(a) CRA CREDIT FOR COMMUNITY LENDING ACTIVI-
TIES.—The Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.) is amended by inserting at the end
the following new section:
‘‘SEC. 809. STANDARDS FOR CRA CREDIT.
‘‘(a) IN GENERAL.—Not later than 1 year after the
date of enactment of this section, the Federal Financial
Institutions Examination Council, in consultation with the
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Community Enterprise Assessment Credit Board, individ-
uals representing regulated financial institutions, consum-
ers, community groups, and other interested parties, shall
establish standards to assess the record of a regulated fi-
nancial institution in meeting its community credit needs
and for purposes of written evaluations prepared under
section 807. Such standards shall evaluate a regulated fi-
nancial institution’s record of meeting the credit needs of
its entire community and expressly grant credit for pur-
poses of written evaluations under section 807 of this Act
based on, but not limited to, the following—
‘‘(1) the actual volume of lending by the institu-
tion to its delineated community;
‘‘(2) the percentage of earning assets, new loan
production or capital that the institution has in-
vested in its delineated community;
‘‘(3) investments by the institution designed
primarily to promote the public welfare, including
the welfare of low- and moderate-income commu-
nities or families (such as by providing housing serv-
ices or jobs in the institution’s community);
‘‘(4) investments in any community develop-
ment organization, community development bank,
community development corporation, community de-
velopment credit union, minority depository institu-
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tion, women’s depository institution, small business
investment corporation operating in the regulated fi-
nancial institution’s delineated community or any
qualifying activity pursuant to section 233(a) of the
Bank Enterprise Act of 1991;
‘‘(5) achieving the assessment factors identified
in the regulations prescribed by the Federal finan-
cial supervisory agencies to implement this Act;
‘‘(6) additional factors that demonstrate an in-
stitution’s commitment to meeting the credit needs
of its entire community.
‘‘(b) REGULATIONS TO INCLUDE STANDARDS.—Each
appropriate Federal financial supervisory agency shall in-
clude the standards established under subsection (a) in its
regulations required by section 806.
‘‘(c) ASSIGNED RATINGS.—
‘‘(1) RATING STANDARDS.—The Federal finan-
cial supervisory agencies shall base the assigned rat-
ings required under section 807(b)(2) of this Act on
the standards established pursuant to subsection (a).
‘‘(2) AGENCY DISCRETION.—In connection with
the use of the standards established under sub-
section (a) and for purposes of the assigned ratings
required under section 807(b)(2), the appropriate
Federal financial supervisory agency shall consider
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and give appropriate weight and consideration for a
regulated financial institution’s asset size and serv-
ice area, access to Federal programs, local economic
conditions, legal impediments and any additional
factors that reasonably bear upon such institution’s
ability to meet its community credit needs.’’
(b) CONFORMING AMENDMENT.—Section 808(a) of
the Community Reinvestment Act of 1977 (12 U.S.C.
2907(a)) (as amended by section 909 of the Housing and
Community Development Act of 1992) is amended by
striking ‘‘may be a factor’’ and inserting ‘‘shall be consid-
ered and given credit’’.
SEC. 102. CRA COMPLIANCE.
(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 insert-
ing ‘‘(a) IN GENERAL.—Subject to subsection (b), in
connection with’’;
(2) by adding at the end the following:
‘‘(b) CRA COMPLIANCE.—Notwithstanding sub-
section (a)(2), an application for a deposit facility by a
regulated financial institution shall not be denied on the
basis of such institution’s compliance with this Act if such
institution has received a rating in its last evaluation
under section 804 of ‘outstanding’ in its record of meeting
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the appropriate Federal financial supervisory
agency determines that such an investment is
not consistent with safe and sound banking
practices.
‘‘(C) Any ‘qualifying investment’ under
this paragraph shall be designed to satisfy the
affiliated regulated financial institution’s con-
tinuing and affirmative obligation to help meet
the credit needs of the local community where
it is chartered.’’.
(b) CONFORMING AMENDMENT.—Section 803 of the
Community Reinvestment Act is amended by inserting at
the end the following:
‘‘(5) 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) The terms ‘community development orga-
nization’, ‘community development bank’, and ‘com-
munity development corporation’ have the same
meaning given such terms in section 234 of the
Bank Enterprise Act of 1991.
‘‘(7) The term ‘community development credit
union’ has the same meaning given such term as in
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section 101(1) of the Federal Credit Union Act (12
U.S.C. 1752(10)) [as amended herein].’’
SEC. 103. EXPEDITED PROCEDURES FOR COMMUNITY DE-
VELOPMENT 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 DEVEL-
OPMENT 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 without providing the Board with at
least 30 days prior written notice of the proposed
transaction or expansion.
‘‘(2) CONTENTS OF NOTICE.—The notice sub-
mitted to the Board shall contain such information
as the Board shall prescribe by regulation or by spe-
cific request in connection with a particular notice.
‘‘(3) PROCEDURE FOR AGENCY ACTION.—A no-
tice filed under this subsection shall be deemed to be
approved by the Board unless, prior to the expira-
tion of 30 days from the receipt of a complete no-
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tice, the Board issues an order setting forth the rea-
sons for disapproval.
‘‘(4) WAIVER.—Any activity of a Community
Development Corporation authorized under sub-
section (c) and subject to paragraph (1), may pro-
ceed prior to the expiration of the disapproval period
if the Board issues a written notice of approval.
‘‘(5) SHORTER PERIOD.—The Board may pro-
vide 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. 104. COMMUNITY DEVELOPMENT INVESTMENT AC-
COUNTS.
(a) NATIONAL BANKS.—Section 5136 of the revised
statutes (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: Provided,
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.’’
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(b) SAVINGS ASSOCIATIONS.—(b) 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 is-
sued by companies that are registered as investment
companies under the Investment Company Act of
1940: Provided, That such investment companies in-
vest and trade only in securities issued by companies
located and primarily doing business in qualified dis-
tressed communities as defined in section 233(b) of
the Bank Enterprise Act of 1991.’’
SEC. 105. 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 pri-
marily doing business in a qualified distressed com-
munity as defined in section 233(b) of the Bank En-
terprise Act of 1991 to the extent that—
‘‘(A) the total amount of the shares of
such company acquired or retained in accord-
ance with this paragraph (by the bank holding
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company and any subsidiary of the bank hold-
ing company) does not exceed 25 percent of the
outstanding voting shares of the company;
‘‘(B) the company is not under the oper-
ational control, directly or indirectly, of the
bank holding company;
‘‘(C) the company does not engage in real
estate or real estate related activities not per-
missible for a national bank; and
‘‘(D) the Board has been given notice by
the bank holding company of its intent to ac-
quire 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 re-
tention of shares would adversely affect the
safety and soundness of insured depository in-
stitution 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 para-
graph:
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‘‘(4) For the purpose of any proceeding under para-
graph (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. 106. AWARDS PROGRAM.
The Federal Financial Institutions Examination
Council shall establish an annual awards program to pub-
licly recognize tangible examples of outstanding efforts by
insured depository institutions to meet the credit needs of
their communities.
SEC. 107. 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 deleting ‘‘undercapitalized’’ each place
that it appears and inserting ‘‘eligible’’;
(2) in paragraph (1)(F), by deleting ‘‘has cap-
ital’’ and all that follows and inserting ‘‘is ade-
quately capitalized as determined under section 38
of the Federal Deposit Insurance Act (12 U.S.C.
1831o).’’;
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(3) in paragraph (1)(G), by deleting ‘‘not more
than 15’’ and inserting ‘‘less than 25’’;
(4) by deleting subparagraphs (A) and (B) of
paragraph (4), as amended, and inserting new sub-
paragraphs (A) and (B) to read as follows—
‘‘(A) that is ‘undercapitalized’ as deter-
mined under section 38 of the Federal Deposit
Insurance Act (12 U.S.C. 1831o); or
‘‘(B) that is a ‘minority depository institu-
tion’ as determined under section 3 note of the
Home Owners’ Loan Act (12 U.S.C. 1463
note), as added by section 308 of the Financial
Institutions Reform, Recovery and Enforcement
Act of 1989 (Public Law 101–73, 103 Stat.
183).’’.
TITLE II—HOUSING AND SMALL
BUSINESS FINANCE
SEC. 201. GOVERNMENT SPONSORED ENTERPRISE PUR-
CHASE GOALS.
(a) 
LOW- 
AND
MODERATE-INCOME
HOUSING
GOALS.—Section 1332(a) of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 is
amended by adding the following new sentence to the end
thereof: ‘‘The Secretary shall establish a separate specific
sub-goal within the goal under this section for the pur-
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chase by each enterprise of mortgages originated by com-
munity development organizations as such term is de-
scribed in section 234 of the Bank Enterprise Act of
1991.’’.
(b) SPECIAL AFFORDABLE HOUSING GOALS.—Sec-
tion 1333(a) of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 is amended by add-
ing the following new sentence to the end thereof: ‘‘The
Secretary shall establish a separate specific sub-goal with-
in the goal under this section for the purchase by each
enterprise of mortgages originated by community develop-
ment 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 Fi-
nancial Safety and Soundness Act of 1992 is amended by
adding the following new sentence to the end thereof:
‘‘The Secretary shall establish a separate specific sub-goal
within the goal under this section for the purchase by each
enterprise of mortgages originated by community develop-
ment 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—
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(1) by striking ‘‘and’’ at the end of paragraph
(3);
(2) by striking the period at the end of para-
graph (4) and inserting in lieu thereof ‘‘; and’’; and
(3) by inserting the following new paragraph
(5) at the end thereof:
‘‘(5) assist community development organizations, as
such term is described in section 234 of the Bank Enter-
prise Act of 1991, to develop the institutional capacity to
assist low- and moderate-income families with the pur-
chase of their first home.’’
SEC. 202. 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 insert-
ing 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.’’.
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SEC. 203. MICRO-LOAN GUARANTEE DEMONSTRATION PRO-
GRAM.
(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), respec-
tively, and inserting after subclause (I) the following new
subclause (II):
‘‘(II) to establish a model pro-
gram to determine the feasibility of
developing a private secondary market
for loans guaranteed under this sub-
section 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 fol-
lowing: ‘‘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:
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‘‘or has demonstrated to the satisfaction of the Ad-
ministration a commitment to establish a micro-loan
program that includes intensive marketing, manage-
ment, 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 fol-
lowing new clause after clause (v):
‘‘(vi) Notwithstanding any other re-
quirement of this subparagraph, the Ad-
ministration may provide such terms and
conditions, including interest rate require-
ments and percentage of guarantee but not
less than 90 percent, as it deems appro-
priate for purposes of making loan guaran-
tees 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 para-
graphs (10) and (11) as paragraphs (11) and (12), respec-
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tively, and inserting after paragraph (9) the following new
paragraph (10):
‘‘(10) Model Program for Establishing a Sec-
ondary Market for Guaranteed Loans.—The Admin-
istration 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 equip-
ment.’’.
(g) REPORT TO CONGRESS.—Section 7(m)(11) of the
Small Business Act (as redesignated by this section) is
amended—
(1) in subparagraph (F), striking ‘‘and’’ after
the semicolon; and
(2) redesignating subparagraph (G) as subpara-
graph (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
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Federal Government for making such guaran-
tees available; and’’.
(h) DEFINITIONS.—Section 7(m)(12) of the Small
Business Act (as redesignated by this section) is amend-
ed—
(1) in clause (iii), by striking ‘‘or’’ after the
semicolon;
(2) by inserting after clause (iv), the following:
‘‘(v) any insured depository institu-
tion, 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 or-
ganization as such term is described in sec-
tion 234 of the Bank Enterprise Act of
1991.’’.
TITLE III—CREDIT UNION
AMENDMENTS
SEC. 301. 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 mem-
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bers (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 follow-
ing:
‘‘(10) In determining whether a State or feder-
ally chartered credit union is a ‘community develop-
ment credit union’, 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 Statis-
tics; or
‘‘(B) serves predominately low- and mod-
erate-income minorities.’’.
SEC. 302. COMMUNITY DEVELOPMENT REVOLVING LOAN
FUND AND TECHNICAL ASSISTANCE.
(a) Section 120(k) of the Federal Credit Union Act
(12 U.S.C. 1766(k)) is deleted.
(b) The Federal Credit Union Act is amended by in-
serting after section 129 (12 U.S.C. 1772c) the following
new section:
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‘‘SECTION 130. COMMUNITY DEVELOPMENT REVOLVING
LOAN FUND FOR CREDIT UNIONS.
‘‘(a) Notwithstanding any other provision of law, the
Board may exercise the authority granted it by the Com-
munity Development Credit Union Revolving Loan Fund
Transfer Act (Public Law 99–609, section 1, November
6, 1986) including any additional appropriation made and
earnings accrued, subject only to this section and to rules
and regulations prescribed by the Board.
‘‘(b) The Board has the authority to invest any idle
Fund monies in United States Treasury securities. Any
interest accrued on such securities shall become a part of
the fund.
‘‘(c) The Board may require that any loans it makes
from the Fund be matched by increased shares in the bor-
rower credit union.
‘‘(d) Interest earned by the Fund may be allocated
by the Board for technical assistance to community devel-
opment credit unions, as defined by the Board subject to
section 101(10) of the Act.’’.
TITLE IV—BANK ENTERPRISE
ACT ENHANCEMENTS
SEC. 401. CREDITS FOR NEWLY CHARTERED COMMUNITY
DEVELOPMENT BANKS.
(a) Section 233(a) of the Bank Enterprise Act of
1991 (12 U.S.C. 1834a(a)) is amended by redesignating
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paragraphs (3), (4), (5) and (6) as paragraphs (4), (5),
(6), and (7) and by inserting after paragraph (2) the fol-
lowing:
‘‘(3) NEWLY CHARTERED COMMUNITY DEVEL-
OPMENT
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 any semiannual period during the first
three years following the approval of the initial char-
ter of such insured depository institution by the ap-
propriate Federal banking agency or State super-
visor.’’.
(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 ‘‘para-
graph (3)’’ and inserting ‘‘paragraph (4)’’.
SEC. 402. FINANCIAL SERVICES FOR DISTRESSED COMMU-
NITIES.
(a) BANK ENTERPRISE ACT.—The Bank Enterprise
Act of 1991 is amended by inserting at the end the follow-
ing new section:
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‘‘SEC. 235. FINANCIAL SERVICES FOR DISTRESSED COMMU-
NITIES.
‘‘(a) DISTRESSED COMMUNITIES LACKING INSUR-
ANCE SERVICES.—
‘‘(1) IN GENERAL.—With the approval of the
appropriate Federal banking agency and notwith-
standing 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 prop-
erty 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 with-
in such community.
‘‘(2) CERTAIN ACTIVITIES PROHIBITED IN CON-
NECTION 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 in-
surance company for which the institution is
acting as agent; or
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‘‘(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 INSUR-
ANCE SERVICES.—The appropriate Federal banking
agency may approve an application by an insured
depository institution to sell insurance under para-
graph (1) in any qualified distressed community only
if the institution provides sufficient evidence that the
availability of insurance agents providing competi-
tively-priced products in the community is inad-
equate.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) APPROPRIATE
FEDERAL
BANKING
AGENCY.—The term ‘appropriate Federal bank-
ing agency’ has the meaning given to such term
in section 3(q) of the Federal Deposit Insur-
ance Act.
‘‘(B) QUALIFIED
DISTRESSED
COMMU-
NITY.—The term ‘qualified distressed commu-
nity’ has the meaning given to such term in sec-
tion 233(b).’’.
(b) BANK ELIGIBLE SECURITIES.—The clause des-
ignated the ‘‘Seventh’’ of section 5136 of the Revised Stat-
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utes (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 (12 U.S.C.
1813(q)), and to such limits as may be prescribed by regu-
lation, any well capitalized national bank which is located
in (or maintains a full service branch located in) a quali-
fied 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 pre-
viously 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 lo-
cated in) a qualified distressed community (as
defined in section 233(b) of the Bank Enter-
prise Act of 1991) may purchase for its own ac-
count, deal in, or underwrite securities issued
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by any small business located in such commu-
nity.’’
SEC. 403. BANK ENTERPRISE ACT ENHANCEMENTS.
(a) QUALIFIED DISTRESSED COMMUNITIES.—Sec-
tion 233(b)(1)(B) of the Bank Enterprise Act of 1991 is
amended to read as follows:
‘‘(B) is designated as a distressed commu-
nity by the Board or by any insured depository
institution in accordance with paragraph (2)
and any designation by an insured depository
institution is not disapproved by the appro-
priate federal banking agency under such para-
graph.’’.
(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 inde-
pendent criteria for a distressed rural area to
be eligible as a ‘qualified distressed community’
under this subsection.
‘‘(B) FACTORS.—In establishing the cri-
teria for a distressed rural area to be eligible as
a ‘qualified distressed community’ under this
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subsection, the Board shall consider, but not be
limited to, 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; and
‘‘(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 follow-
ing:
‘‘(L) Extensions of credit to small busi-
nesses located within a qualified distressed com-
munity.
‘‘(M) Consumer education programs either
sponsored or offered by insured depository in-
stitutions 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 lo-
cated in qualified distressed communities.’’.
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‘‘(O) Technical assistance to, or servicing
the loans of, low- or moderate-income home-
owners, and homeowners located in qualified
distressed communities.
(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 sub-
section (f) the following:
‘‘(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 ‘‘institu-
tion, non-profit micro-loan lending organization licensed
by the Small Business Administration, Small Business
Association certified development company,’’.
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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 edu-
cational services for consumers residing in qualified dis-
tressed 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 serv-
ices sponsored or offered by insured depository institutions
as described in subsection (a) shall, to the extent prac-
ticable, 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);
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(4) Basic banking and personal finances; and
(5) Development of an individual financial plan
and budget.
SECTION 502. CREDIT REPORTS.
(a) INSURED DEPOSITORY INSTITUTIONS.—Any in-
sured depository institution that sponsors or offers a
course for consumers residing in a qualified distressed
community as described in section 501(b) of the Commu-
nity Development Banking Act of 1993 may, in its discre-
tion and to the extent practicable, report the names of
any consumer who complete such course to any consumer
reporting agency (as defined in section 603(f) of the Fair
Credit Reporting Act) to which the institution regularly
reports credit information on consumers.
(b) 
CONSUMER
REPORTING
AGENCIES.—Any
consumer report furnished by a consumer reporting agen-
cy on any consumer residing in a qualified distressed com-
munity who has completed an educational course spon-
sored or offered by an insured depository institution as
described in section 501(b) of the Community Develop-
ment Banking Act 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.
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SECTION 503. CREDIT CARDS.
Insured depository institutions are encouraged to
sponsor or offer courses for consumers residing in quali-
fied distressed communities as described in section 501(b)
of the Community Development Banking Act of 1993, and
at their discretion and to the extent practicable, offer
consumer financial services otherwise available at such in-
stitution, including consumer credit card services, to such
consumers who complete such course and qualify for such
financial services.
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