are community development financial institu-
tions; and
(B) has a comprehensive plan for providing
meaningful financial assistance to such an en-
tity or network of entities; and
(16) other factors deemed appropriate by the
Board.
(b) GEOGRAPHIC DIVERSITY.—In addition to the
above, in making its selections the Board shall seek to
fund a geographically diverse group of applicants, which
shall include applicants from nonmetropolitan and rural
areas.
(c) PUBLICATION REQUIREMENT.—The Board shall
publish regulations with respect to its selection criteria not
later than 210 days after the date of enactment of this
title.
SEC. 207. ASSISTANCE PROVIDED BY THE FUND.
(a) PURPOSE OF ASSISTANCE.—
(1) The Fund shall work to promote an envi-
ronment hospitable to business information, eco-
nomic growth, community development, and afford-
able housing in distressed communities. The Fund
shall coordinate its activities with existing Federal
and other community and economic development
programs.
(2) Assistance may be provided to an existing
qualified community development financial institu-
tion to expand its activities to serve investment
areas or targeted populations not currently served by
another qualified community development financial
institution receiving assistance under this section or
to expand the volume of its activities consistent with
the purposes of this title, or to form a new entity
to undertake activities consistent with the purposes
of this title, or to assist an existing entity to modify
its structure or activities in order to undertake ac-
tivities consistent with the purposes of this title.
(b) TYPES OF ASSISTANCE.—
(1) IN GENERAL.—The Fund may provide fi-
nancial assistance to qualified community develop-
ment financial institutions through equity invest-
ments, loans, deposits, membership shares, and
grants. The Fund may also provide technical assist-
ance, including training, and grants for technical as-
sistance to qualified community development finan-
cial institutions. The allocation of awards of assist-
ance between insured and uninsured community de-
velopment financial institutions shall be in the dis-
cretion of the Board: Provided, That due consider-
ation shall be given to the allocation of funds to in-
sured community development financial institutions.
(2) FINANCIAL ASSISTANCE.—The Fund shall
structure financial assistance to a qualified commu-
nity development financial institution in such a man-
ner that it does not own more than 50 percent of
the equity of such institution and does not control
the operations of such institution. The Fund will not
be deemed to control such institution for the pur-
poses of applicable laws. With respect to equity in-
vestments, the Fund shall hold only transferable,
nonvoting investments. Such equity investments may
provide for convertibility to voting stock upon trans-
fer by the Fund.
(3) DEPOSITS.—Notwithstanding any other
provision of law, deposits made pursuant to this sec-
tion in qualified insured community development fi-
nancial institutions shall not be subject to any re-
quirement for collateral or security.
(4) LIMITATIONS
ON
OBLIGATIONS.—Direct
loan obligations may be incurred only to the extent
that appropriations of budget authority to cover
their costs, as defined in section 502 of the Congres-
sional Budget Act of 1974, are made in advance.
(c) PURPOSE OF FINANCIAL ASSISTANCE.—Financial
assistance made available under this title may be used by
assisted institutions to develop or support—
(1) commercial facilities that enhance revitaliza-
tion, community stability, or job creation and reten-
tion efforts;
(2) business creation and expansion efforts
that—
(A) create or retain jobs for low-income
people;
(B) enhance the availability of products
and services to low-income people; or
(C) create or retain businesses owned by
low-income people or residents of a targeted
area;
(3) community facilities that provide benefits to
low-income people or enhance community stability;
(4) the provision of basic financial services to
low-income people or residents of a targeted area;
(5) the provision of development services;
(6) home ownership opportunities that are af-
fordable to low-income households;
(7) rental housing that is principally affordable
to low-income households; and
(8) other activities deemed appropriate by the
Fund.
(d) AMOUNT OF ASSISTANCE.—The Fund may pro-
vide up to $5,000,000 of assistance per application to any
one qualified insured community development financial in-
stitution and up to $2,000,000 per application to any
other qualified community development financial institu-
tion. The Fund shall have the authority to set minimum
amounts of assistance per institution.
(e) MATCHING REQUIREMENTS.—
(1) Assistance provided to qualified insured
community development financial institutions, other
than deposits or membership shares of $100,000 or
less, technical assistance, or grants for technical as-
sistance, shall be matched by no less than one dollar
of equity, deposits or membership shares for each
dollar provided by the Fund. The Fund shall require
a match for all other assistance, the amount and
form of which shall be in the discretion of the Fund:
Provided, That the Fund shall in no event require
assistance provided in the form of deposits or mem-
bership shares of $100,000 or less, technical assist-
ance, or grants for technical assistance to be
matched. The Fund shall provide no assistance ex-
cept technical assistance or grants for technical as-
sistance until a qualified community development fi-
nancial institution has secured legally enforceable
commitments for the entire match required. Assist-
ance may be provided in one lump sum, or over a
period of time, as determined by the Fund.
(2) Assistance shall be matched with funds
from sources other than the Federal Government.
(f) TERMS AND CONDITIONS.—
(1) IN GENERAL.—The Fund shall provide as-
sistance authorized under this title in such form and
subject to such restrictions as are necessary to en-
sure that to the maximum extent practicable—
(A) all assistance granted is used by the
qualified community development financial in-
stitution in a manner consistent with the pur-
poses of this title;
(B) qualified community development fi-
nancial institutions receiving assistance that are
not otherwise regulated by the Federal Govern-
ment or by a State government are financially
and managerially sound;
(C) assistance results in a net increase,
both nationally and in the local communities in
which assistance is provided, in capital, credit,
and development services; and
(D) assistance is provided in a manner
that encourages affiliations and partnerships
between insured depository institutions, second-
ary markets or other sources of credit or lever-
age and local organizations dedicated to com-
munity development.
(2) CONSULTATION
WITH
BANKING
REGU-
LATORS.—Prior to providing assistance to a quali-
fied insured community development financial insti-
tution, the Board should consult with the appro-
priate Federal banking agency or, in the case of an
insured credit union, the National Credit Union
Administration.
(3) ASSISTANCE AGREEMENT.—
(A) The Board shall impose restrictions on
the use of assistance through a stock purchase
agreement, 
share 
purchase 
agreement, 
or
through a contract entered into in consideration
for the provision of assistance.
(B) Such agreement or contract shall re-
quire institutions assisted under this title to
comply with performance goals. The perform-
ance goals shall be negotiated between the
Board and each qualified community develop-
ment financial institution receiving assistance
based upon the strategic plan submitted pursu-
ant to section 205(b)(5). The performance goals
may be renegotiated jointly as necessary or ap-
propriate, subject to subparagraph (C) of this
section. Activity levels for insured community
development financial institutions should be de-
termined by the Board in consultation with the
appropriate Federal banking agency or, in the
case of an insured credit union, with the Na-
tional Credit Union Administration.
(C) The agreement or contract shall speci-
fy sanctions available to the Board, in its dis-
cretion, in the event of noncompliance with the
purposes of this title or the terms of the agree-
ment. The sanctions may include revocation of
approval of the application, terminating or re-
ducing future assistance, requiring repayment
of assistance, and requiring changes to the per-
formance goals imposed pursuant to subpara-
graph (B) or to the strategic plan submitted
pursuant to section 205(b)(5). In the case of an
insured community development financial insti-
tution, the Board shall consult with the appro-
priate Federal banking agency or, in the case of
an insured credit union, the National Credit
Union Administration, before imposing sanc-
tions pursuant to this paragraph.
(4) REVIEW.—At least annually, the Board
shall review the performance of each assisted quali-
fied community development financial institution in
carrying out its strategic plan and performance
goals.
(5) REPORTING.—The Board shall require each
qualified community development financial institu-
tion receiving assistance to submit an annual report
to the Fund on its activities, its financial condition,
its success in meeting performance goals, and its
compliance with other requirements of this title.
(g) AUTHORITY TO SELL EQUITY INVESTMENTS AND
LOANS.—The Board shall have the authority at any time
to sell its investments and loans and may, in its discretion,
retain the power to enforce limitations on assistance en-
tered into in accordance with the requirements of this title.
(h) NO AUTHORITY TO LIMIT SUPERVISION AND
REGULATION.—Nothing in this title shall affect any au-
thority of the appropriate Federal banking agency or, in
the case of an insured credit union, the National Credit
Union Administration, to supervise and regulate an in-
sured community development financial institution.
SEC. 208. ENCOURAGEMENT OF PRIVATE ENTITIES.
The Board may cause to be incorporated, or encour-
age the incorporation of, private non-profit and for-profit
entities that will complement the activities of the Fund
in carrying out the purposes of this title. The purposes
of any such entities shall be limited to investing in and
assisting community development financial institutions in
a manner similar to the activities of the Fund under this
title. Any such entities shall be managed exclusively by
private individuals who are selected in accordance with the
laws of the jurisdiction of incorporation.
SEC. 209. CLEARINGHOUSE FUNCTION.
The Fund shall establish and maintain an informa-
tion clearinghouse in coordination with the Departments
of Agriculture, Commerce, and Housing and Urban Devel-
opment, the Small Business Administration, other Federal
agencies, and community development financial institu-
tions—
(1) to cause to be collected, compiled, and ana-
lyzed information pertinent to community develop-
ment financial institutions that will assist in creat-
ing, developing, expanding, and preserving these in-
stitutions; and
(2) to cause to be established a service center
for comprehensive information on financial, tech-
nical, and management assistance, case studies of
the activities of community development financial in-
stitutions, regulations, and other information that
may promote the purposes of this title.
SEC. 210. RECORDKEEPING, REPORTS, AND AUDITS.
(a) RECORDKEEPING.—
(1) A qualified community development finan-
cial institution receiving assistance from the Fund
shall keep such records as may be reasonably nec-
essary to disclose the disposition of any assistance
under this title and to ensure compliance with the
requirements of this title.
(2) The Fund shall have access, for the purpose
of determining compliance with this title, to any
books, documents, papers, and records of a qualified
community development financial institution receiv-
ing assistance from the Fund that are pertinent to
assistance received under this title.
(b) REPORTS.—
(1) ANNUAL REPORT.—The Fund shall conduct
an annual evaluation of the activities carried out
pursuant to this title and shall submit a report of
its findings to the President within 120 days of the
end of each fiscal year of the Fund. The report shall
include financial statements audited in accordance
with subsection (c).
(2) INSTITUTIONAL VOICE FOR COMMUNITY DE-
VELOPMENT.—
(A) ONGOING
STUDY.—The Fund shall
conduct, or cause to be conducted, an ongoing
study to identify and evaluate the most effective
and financially sound policies and practices for
encouraging investment in distressed commu-
nities, including small business and commercial
lending, business formation and expansion,
community and economic development, commer-
cial real estate and multi-family housing, and
home mortgages. In addition, the Fund may
study, or cause to be studied, related matters,
such as identification of sources of and access
to capital and loans for community investment;
development of secondary markets for economic
and community development, small business
and commercial loans, and home mortgage
loans and investments; and methods to involve
all segments of the financial services industry in
community development.
(B) CONSULTATION.—In the conduct of
the study, the Fund shall consult, or cause con-
sultation with, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance
Corporation, the Board of Governors of the
Federal Reserve System, the Federal Housing
Finance Board, the Farm Credit Administra-
tion, the Office of Thrift Supervision, the Na-
tional Credit Union Administration, community
reinvestment, civil rights, consumer and finan-
cial organizations, and such representatives of
agencies or other persons as the Fund may de-
termine.
(C) REPORTS.—Within 270 days after the
date of enactment of this title, the Fund shall
report to the President its initial findings and
recommendations regarding the matters set
forth in subparagraph (A). Thereafter, the
Fund shall report its findings and recommenda-
tions to the President with the annual report
required by paragraph (b)(1).
(3) INVESTMENT, GOVERNANCE, AND ROLE OF
FUND.—Six years following the date of enactment of
this title, the Fund, in accordance with the proce-
dures described in paragraphs (2)(A) and (B), shall
conduct a study evaluating the structure, govern-
ance, and performance of the Fund. The study shall
be submitted to the President. Such study shall in-
clude an evaluation of the overall performance of the
Fund in meeting the purposes of this title and any
recommendations of the Fund for restructuring the
Board, altering procedures under which the Fund is
governed, the future role of the Fund in addressing
community development, and the ability of the Fund
to become a private, self-sustaining entity capable of
fulfilling the purposes of this title.
(c) EXAMINATION AND AUDIT.—The financial state-
ments of the Fund shall be audited in accordance with
section 9105 of title 31, United States Code, except that
audits required by section 9105(a) of that title shall be
performed annually.
SEC. 211. INVESTMENT OF RECEIPTS AND PROCEEDS.
Any dividends on equity investments and proceeds
from the disposition of investments, deposits, or member-
ship shares that are received by the Fund as a result of
assistance provided pursuant to section 217 shall be de-
posited and accredited to an account of the Fund estab-
lished to carry out the authorized purposes of this title.
Upon request of the Chief Executive Officer, the Secretary
of the Treasury shall invest amounts deposited in such ac-
count in public debt securities with maturities suitable to
the needs of the Fund, as determined by the Chief Execu-
tive Officer, and bearing interest at rates determined by
the Secretary of the Treasury, taking into consideration
current market yields on outstanding marketable obliga-
tions of the United States of comparable maturities.
Amounts deposited into the account and interest earned
on such amounts pursuant to this section shall be available
to the Fund until expended.
SEC. 212. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appro-
priated to the Fund, to remain available until expended,
$60,000,000 for fiscal year 1994, $104,000,000 for fiscal
year 1995, $107,000,000 for fiscal year 1996, and
$111,000,000 for fiscal year 1997, or such greater sums
as may be appropriated, to carry out the purposes of the
title.
(b) ADMINISTRATIVE EXPENSES.—The Fund may
set aside up to $10,000,000 each fiscal year to pay admin-
istrative costs and expenses.
SEC. 213. CONFORMING AMENDMENT.
Section 8E(a)(2) of the Inspector General Act of
1978 (5 U.S.C. app. 3, 8E(a)(2)) is amended by inserting
‘‘the Community Development Banking and Financial In-
stitutions Fund,’’ immediately following ‘‘the Commodity
Futures Trading Commission.’’.
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