SECTION 1. SHORT TITLE.
This Act shall be cited as the ‘‘Bank Enterprise Act
Amendments of 1993’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds the following:
(1) Many small- and medium-size businesses,
low- to moderate-income individuals and economi-
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 all private sec-
tor institutions, including 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
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-sized businesses, low- and moderate-
income 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 ENTERPRISE ACT
ENHANCEMENTS
SEC. 101. COMMUNITY DEVELOPMENT FUND.
(a) IN GENERAL.—The Bank Enterprise Act (12
U.S.C. 1834 et seq.) is amended by adding at the end
the following new sections:
‘‘SEC. 235. COMMUNITY DEVELOPMENT FUND.
‘‘(a) IN GENERAL.—There is hereby established the
Community Development Fund (hereafter in this section
referred to as the ‘Fund’).
‘‘(b) ADMINISTRATION OF FUND.—
‘‘(1) IN GENERAL.—The Fund shall be adminis-
tered by the Community Enterprise Assessment
Credit Board (hereafter in this section referred to as
the ‘Board’).
‘‘(2) 
STANDARDS
AND
PROCEDURES.—The
Board shall establish standards and procedures for
administering the Fund, processing and reviewing
applications for financial and technical assistance,
and providing oversight for the expenditure of
money from the Fund and for projects funded by the
Fund.
‘‘(3) 
NATIONAL
INFORMATION
CLEARING-
HOUSE.—The Fund shall establish and maintain an
information clearinghouse in coordination with the
Departments of Agriculture, Commerce, and Hous-
ing and Urban Development, the Small Business Ad-
ministration, other Federal agencies, and community
development financial institutions—
‘‘(A) to cause to be collected, compiled,
and analyzed information pertinent to commu-
nity development financial institutions that will
assist in creating, developing, expanding, and
preserving these institutions; and
‘‘(B) to cause to be established a service
center for comprehensive information on finan-
cial, technical and management assistance, case
studies of the activities of community develop-
ment financial institutions, regulations, and
other information that may be useful to pro-
mote the purpose of this Act.
‘‘(4) POWERS.—The Board shall have such
powers as may be necessary for the Board, in the
Board’s status as a Federal agency, to administer
the Fund and carry out the purposes of this section.
‘‘(5) REGULATIONS.—The Board may prescribe
such regulations and issue such orders as the Board
may determine to be appropriate to administer the
Fund and carry out the purposes of this section.
‘‘(c) PURPOSES OF FUND.—Amounts in the Fund
shall be available to—
‘‘(1) support a program of making investments
in and providing assistance to community develop-
ment financial institutions that will provide greater
economic opportunity in qualified distressed commu-
nities;
‘‘(2) provide financial and technical assistance
to community development financial institutions; and
‘‘(3) operate a national information clearing-
house described in subsection (b)(3).
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) FUND.—There are authorized to be appro-
priated to the Fund to carry out this section
$30,000,000 for fiscal year 1994, $52,000,000 for
fiscal year 1995, $53,500,000 for fiscal year 1996,
and $55,500,000 for fiscal year 1997.
‘‘(2) BOARD.—There are authorized to be ap-
propriated to the Board to carry out this subtitle
(other than this section) $30,000,000 for fiscal year
1994, 
$52,000,000 
for 
fiscal 
year 
1995,
$53,500,000 for fiscal year 1996, and $55,500,000
for fiscal year 1997.
‘‘(e) DEFINITIONS.—For purposes of this section—
‘‘(1) COMMUNITY DEVELOPMENT FINANCIAL IN-
STITUTION.—The term ‘community development fi-
nancial institution’—
‘‘(A) means any bank, savings association,
credit union, depository institution holding com-
pany 
or 
affiliate 
of 
such 
company,
microenterprise development fund, community
development corporation, community develop-
ment revolving loan fund, or other depository or
nondepository organization which—
‘‘(i) promotes the provision of capital,
credit, or development services in qualified
distressed communities; and
‘‘(ii) the Board finds provides the
same or greater community participation
in the activities of the institution or orga-
nization as are required under section
234(b) for a community development bank;
and
‘‘(B) does not include an agency or instru-
mentality of the United States or an agency or
instrumentality of any State or political subdivi-
sion of any State.
‘‘(2) BANK, SAVINGS ASSOCIATION, DEPOSITORY
INSTITUTION HOLDING COMPANY, AND AFFILIATE.—
‘‘(A) means any community development
financial institution which is an insured deposi-
tory institution; and
‘‘(B) any insured credit union which has
been designated as low-income by the National
Credit Union Administration.
‘‘(6) INSURED CREDIT UNION.—The term ‘in-
sured credit union’ has the same meaning given to
such term in section 101(7) of the Federal Credit
Union Act.
‘‘(7) INSURED DEPOSITORY INSTITUTION.—The
term ‘insured depository institution’ has the mean-
ing given to such term in section 3(c) of the Federal
Deposit Insurance Act.
‘‘(8) QUALIFIED
DISTRESSED
COMMUNITY.—
The term ‘qualified distressed community’ has the
meaning given to such term in section 233(b).
‘‘(9) STATE.—The term ‘State’ has the mean-
ing given to such term in section 3 of the Federal
Deposit Insurance Act.
‘‘SEC. 236. APPLICATIONS FOR ASSISTANCE FROM FUND.
‘‘(a) FORM AND PROCEDURES.—An application for
assistance under section 235 shall be submitted by an ap-
plicant in such form and in accordance with such proce-
dures as the Board shall establish.
‘‘(b) MINIMUM REQUIREMENTS.—The Board shall
require that the application—
‘‘(1) demonstrate to the satisfaction of the
Board that the applicant is, or upon the receipt of
a charter will be, a community development financial
institution;
‘‘(2) demonstrate that the applicant will serve a
qualified distressed community;
‘‘(3) in the case of an applicant that has pre-
viously received assistance from the Fund, dem-
onstrate that the applicant—
‘‘(A) has successfully carried out the appli-
cant’s responsibilities with respect to such as-
sistance;
‘‘(B) has become or is about to become an
entity that will not be dependent upon assist-
ance from the Fund for continued viability; and
‘‘(C) will expand the applicant’s operations
into a new qualified distressed community, offer
new services, or will increase the volume of its
current business;
‘‘(4) in the case of a community development fi-
nancial institution with existing operations, dem-
onstrate a record of success of serving a qualified
distressed community;
‘‘(5) include a detailed and comprehensive stra-
tegic plan for the organization that contains—
‘‘(A) a business plan of at least 5 years
that demonstrates the applicant is properly
managed and has the capacity to form and op-
erate a community development financial insti-
tution that is, or will become, an entity that will
not be dependent upon assistance from the
Fund for continued viability;
‘‘(B) a statement that the applicant has,
or will have, in the applicant’s charter or other
governing documents a commitment to commu-
nity development, or other evidence of a prior
history and a continuing affirmation of a com-
mitment of community development;
‘‘(C) an analysis of the needs of the quali-
fied distressed community and a strategy for
how the applicant will attempt to meet those
needs;
‘‘(D) a plan to coordinate use of assistance
from the Fund with existing Federal, govern-
ment-sponsored enterprise, and State and local
assistance programs, and private sector finan-
cial services;
‘‘(E) a statement that the proposed activi-
ties of the applicant are consistent with existing
economic, community and housing development
plans adopted by or applicable to the qualified
distressed community;
‘‘(F) a description of how the applicant
will affiliate, network, or otherwise coordinate
with a full range of community organizations
and financial institutions which provide, or will
provide, capital, credit, or secondary markets in
order to assure that banking, economic develop-
ment, investment, affordable housing, and other
related services will be available within the
qualified distressed community; and
‘‘(G) such other information as the Board
considers to be appropriate for inclusion in the
strategic plan;
‘‘(6) demonstrate that the applicant will carry
on the applicant’s activities consistent with the pur-
poses of the assistance provided by the Fund within
the qualified distressed community;
‘‘(7) include a detailed and specific statement of
applicant’s plans and likely sources of funds to
match the amount of assistance from the Fund with
funds from private sources in accordance with the
requirements of section 238(e); and
‘‘(8) include such other information as the
Board may require.
‘‘SEC. 237. SELECTION OF INSTITUTIONS.
‘‘(a) IN GENERAL.—The Board shall, in the Board’s
discretion, select applications that meet the requirements
of section 236 and award assistance from the Fund in ac-
cordance with section 238.
‘‘(b) SELECTION CRITERIA.—In selecting applica-
tions, the Board shall consider applications based on fac-
tors established by the Board which shall include the fol-
lowing criteria:
‘‘(1) The likelihood of success of the applicant
in forming and operating a community development
financial institution.
‘‘(2) The range and comprehensiveness of the
capital, credit, and development services to be pro-
vided by the applicant.
‘‘(3) The extent of the need, as measured by
objective criteria of distress, within the qualified dis-
tressed community for the types of activities pro-
posed by the applicant.
‘‘(4) The likelihood that the proposed activities
will benefit a significant portion of the qualified dis-
tressed community or, in the case of a community
development financial institution with existing oper-
ations, evidence of the applicant’s record of success
in serving a qualified distressed community.
‘‘(5) The extent to which the applicant will con-
centrate the applicant’s activities on serving low and
very low-income families.
‘‘(6) The evidence of the extent of a broad
cross-section of support from the qualified distressed
community.
‘‘(7) The experience and background of the pro-
posed management team.
‘‘(8) The amount of legally enforceable commit-
ments available at the time of application to meet or
exceed the matching requirements under section
238(e) and the strength of the plan for raising the
balance of the match.
‘‘(9) In the case of applicants that have pre-
viously received assistance from the Fund, the extent
to which they have met or exceeded the performance
goals applicable with respect to such assistance.
‘‘(10) The extent to which the proposed activi-
ties will expand the employment base within the
qualified distressed community.
‘‘(11) The extent to which the applicant is, or
will be, community-owned or community-governed.
‘‘(12) Whether the applicant is, or will become,
an insured community development financial institu-
tion.
‘‘(13) Whether the applicant is, or will be lo-
cated, in a qualified distressed community.
‘‘(14) In the case of an institution that is not
an insured community development financial institu-
tion, the extent to which the institution has or will
have the ability to increase the applicant’s resources
through affiliation with a secondary market, insured
depository 
institution, 
or 
other 
financial
intermediary in order to multiply the amount of cap-
ital or credit available for community development.
‘‘(15) In the case of an insured depository insti-
tution or insured credit union applicant, whether the
institution—
‘‘(A) has or will have a substantial affili-
ation with an entity or network of entities that
are community development financial institu-
tions; and
‘‘(B) has a comprehensive plan for provid-
ing meaningful financial assistance to such an
entity or network of entities.
‘‘(c) FAIR DISTRIBUTION OF FUNDING.—In addition
to the criteria described in subsection (b), the Board, in
making selections under this section, shall seek to provide
a fair distribution of funding among—
‘‘(1) a geographically diverse group of appli-
cants, 
which 
shall 
include 
applicants 
from
nonmetropolitan and rural areas;
‘‘(2) various types of community development
financial institutions; and
‘‘(3) community development financial institu-
tions of various sizes (as determined on the basis of
total assets).
‘‘SEC. 238. ASSISTANCE PROVIDED BY THE FUND.
‘‘(A) IN GENERAL.—
‘‘(1) PROMOTION
OF
HOSPITABLE
ENVIRON-
MENT
FOR
DEVELOPMENT
AND
GROWTH.—The
Fund shall work to promote an environment hos-
pitable to business information, economic growth,
community development, and affordable housing in
qualified distressed communities.
‘‘(2) 
COORDINATION
OF
ACTIVITIES.—The
Fund shall coordinate activities of the Fund with
other Federal agencies and other community and
economic development programs.
‘‘(3) PURPOSE
OF
ASSISTANCE.—Assistance
may be provided to—
‘‘(A) an existing qualified community de-
velopment financial institution to—
‘‘(i) expand the institution’s activities
to serve any qualified distressed commu-
nity not currently served by another quali-
fied community development financial in-
stitution receiving assistance under this
section; and
‘‘(ii) expand the volume of the institu-
tion’s activities consistent with the pur-
poses of the Fund;
‘‘(B) from a new entity to undertake ac-
tivities consistent with the purposes of the
Fund; or
‘‘(C) to assist an existing entity to modify
the entity’s structure or activities in order to
undertake activities consistent with the pur-
poses of the Fund.
‘‘(b) TYPES OF ASSISTANCE.—
‘‘(1) IN GENERAL.—
‘‘(A) FINANCIAL ASSISTANCE.—The Fund
may provide financial assistance to qualified
community development financial institutions
through equity investments, loans, deposits,
membership shares, and grants.
‘‘(B) TECHNICAL ASSISTANCE.—The Fund
may provide technical assistance, including
training, and grants for technical assistance to
qualified community development financial in-
stitutions.
‘‘(C) ALLOCATION
OF
ASSISTANCE.—The
allocation of awards of assistance between in-
sured and uninsured community development fi-
nancial institutions shall be in the discretion of
the Board, except that due consideration shall
be given to the allocation of funds to insured
community development financial institutions.
‘‘(2) LIMITATIONS ON EQUITY INVESTMENTS.—
‘‘(A) 50 PERCENT OF EQUITY MAXIMUM.—
The Fund shall structure financial assistance to
a qualified community development financial in-
stitution in such a manner that the Fund does
not own more than 50 percent of the equity of
such institution after providing such assistance
and does not control the operations of such in-
stitution.
‘‘(B) 
COORDINATION
WITH
OTHER
LAWS.—The Fund shall not be deemed to con-
trol any institution in which the Fund has an
equity investment for the purposes of any appli-
cable Federal or State law.
‘‘(C) LIMITATION ON FORM OF EQUITY.—
In the case of equity investments, the Fund
shall hold only transferable, nonvoting invest-
ments, except that the security representing any
such equity investment may provide for convert-
ibility to working stock upon transfer of the se-
curity 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.—Finan-
cial assistance made available under this section may be
used by assisted institutions to develop or support—
‘‘(1) commercial facilities that enhance revital-
ization, community stability, or job creation and re-
tention 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 qualified
distressed community;
‘‘(3) community facilities that provide benefits
to low-income people or enhance community stabil-
ity;
‘‘(4) the provision of basic financial services to
low-income people or residents of a qualified dis-
tressed community;
‘‘(5) the provision of development services;
‘‘(6) home ownership opportunities that are af-
fordable to low-income households;
‘‘(7) rental housing that is principally afford-
able to low-income households; and
‘‘(8) other activities deemed appropriate by the
Fund.
‘‘(d) AMOUNT OF ASSISTANCE.—
‘‘(1) IN GENERAL.—The Fund may provide up
to $5,000,000 of assistance per application to any
one qualified insured community development finan-
cial institution and up to $2,000,000 per application
to any other qualified community development finan-
cial institution.
‘‘(2) AUTHORITY OF BOARD TO SET MINIMUM
AMOUNTS.—The Board shall have the authority to
set minimum amounts of assistance from the Fund
per institution.
‘‘(e) MATCHING REQUIREMENTS.—
‘‘(1) IN
GENERAL.—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 assistance, shall be matched by
no less than $1 of equity, deposits, or membership
shares for each dollar provided by the Fund.
‘‘(2) OTHER FORMS OF ASSISTANCE.—
‘‘(A) GENERAL RULE.—The Fund shall re-
quire a match for all other assistance, the
amount and form of which shall be in the dis-
cretion of the Fund.
‘‘(B) EXCEPTION.—The Fund shall in no
event require assistance provided in the form of
deposits or membership shares of $100,000 or
less, technical assistance, or grants for technical
assistance to be matched.
‘‘(C) LEGALLY
ENFORCEABLE
COMMIT-
MENTS REQUIRED.—The Fund shall provide no
assistance except technical assistance or grants
for technical assistance until a qualified com-
munity development financial institution has se-
cured legally enforceable commitments for the
entire match required.
‘‘(D) FORM
OF
PAYMENT.—Assistance
may be provided in one lump sum, or over a pe-
riod of time, as determined by the Fund.
‘‘(3) MATCH REQUIREMENT.—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 Act 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 Act;
‘‘(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 Ad-
ministration.
‘‘(3) ASSISTANCE AGREEMENT.—
‘‘(A) RESTRICTIONS
ON
USE
OF
ASSIST-
ANCE.—The Board shall impose restrictions on
the use of assistance provided by the Fund
through the use of a stock purchase agreement,
share purchase agreement, or through a con-
tract entered into in consideration for the provi-
sion of assistance.
‘‘(B) PERFORMANCE GOALS.—
‘‘(i) IN GENERAL.—Any agreement or
contract relating to the provision of assist-
ance shall require the institution assisted
to comply with performance goals.
‘‘(ii) NEGOTIATION
OF
GOALS.—The
performance goals shall be negotiated be-
tween the Board and each qualified com-
munity development financial institution
receiving assistance based upon the strate-
gic plan submitted pursuant to section
236(b)(5).
‘‘(iii) RENEGOTIATION.—The perform-
ance goals may be renegotiated jointly as
appropriate, subject to subparagraph (C).
‘‘(iv) DETERMINATION
OF
ACTIVITY
LEVELS.—Activity levels for insured com-
munity development financial institutions