A bill to amend the Emergency Economic Stabilization Act of 2008, with respect to considerations of the Secretary of the Treasury in providing assistance under that Act, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bank On Our Communities Act of 
2009''.

SEC. 2. COMMUNITY CREDIT RENEWAL PROGRAM.

    Section 103 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5213) is amended--
            (1) by striking ``In exercising the authorities granted'' 
        and inserting the following:
    ``(a) In General.--In exercising the authorities granted'';
            (2) in paragraph (5), by inserting before the semicolon the 
        following: ``, except that the needs of certain small financial 
        institutions may be taken into account, as set forth in 
        paragraph (6), and the viability of certain small financial 
        institutions may be established, as set forth in subsection 
        (b)(3)''; and
            (3) by adding at the end the following:
    ``(b) Community Credit Renewal Program.--
            ``(1) In general.--There is established within the Treasury 
        the Community Credit Renewal Fund, which shall be used by the 
        Secretary to provide assistance to community banking 
        institutions in an amount not to exceed $15,000,000,000.
            ``(2) Transfer of funds.--Of amounts made available to 
        carry out this title, the Secretary shall transfer 
        $15,000,000,000 to Community Credit Renewal Fund for purposes 
        of this subsection.
            ``(3) Determination of viability.--Notwithstanding any 
        other provision of this title, the Secretary shall provide 
        assistance under this subsection to any community banking 
        institution, and a community banking institution may establish 
        its long-term viability for purposes of subsection (a)(4), by 
        demonstrating its receipt of capital from investors other than 
        the Secretary, if--
                    ``(A) the amount of capital to be received from 
                investors other than the Secretary is equal to or 
                greater than the amount of capital to be received from 
                the Secretary;
                    ``(B) the aggregate amount of capital to be 
                received from the Secretary and from investors other 
                than the Secretary is determined, on the basis of a 
                forward-looking assessment by the institution by its 
                management (in consultation with the appropriate 
                Federal banking agency), to enable the community 
                banking institution to remain well-capitalized (as 
                determined by the appropriate Federal banking agency) 
                even under a reasonably adverse economic scenario 
                during the 2-year period following the date of receipt 
                of such capital, and to increase the outstanding loans 
                of the community banking institution, by December 31, 
                2010, such that the total amount of commercial and 
                industrial loans is at least 5 percent greater than the 
                smallest amount of such loans held by the community 
                banking institution, as of any quarter-end in calendar 
                year 2009;
                    ``(C) not later than--
                            ``(i) 20 business days prior to the 
                        proposed date of the investment by the 
                        Secretary, the community banking institution 
                        notifies the Secretary, or the designee 
                        selected by the Secretary to receive such 
                        notice, of the amount of capital that the 
                        community banking institution proposes to 
                        solicit from investors other than the 
                        Secretary, on the condition that such capital 
                        will be matched or supplemented by an 
                        investment by the Secretary, and of the amount 
                        of capital that the community banking 
                        institution proposes be invested by the 
                        Secretary; and
                            ``(ii) the close of business on the 5th 
                        business day after the date of the receipt of 
                        notice under clause (i) (or such longer period 
                        as the Secretary may reasonably establish, up 
                        to an additional 10 business days), the 
                        Secretary does not notify the community banking 
                        institution of the refusal of the Secretary to 
                        make the matching or supplementary investment 
                        and the grounds for such refusal, including the 
                        determination of the Secretary, in consultation 
                        with the appropriate Federal banking agency, 
                        that the aggregate amount of capital to be 
                        raised would not be enough to meet the 
                        requirements of this subsection, provided, 
                        however, that the Secretary may not refuse to 
                        make a matching or supplementary investment to 
                        an institution solely on the grounds that the 
                        institution holds a CAMEL composite rating of 3 
                        under the Uniform Financial Institutions Rating 
                        System (or an equivalent rating under a 
                        comparable rating system);
                    ``(D) the capital is received from investors other 
                than the Secretary on the same day as the date of 
                receipt of capital from the Secretary, and such date is 
                prior to the earlier of--
                            ``(i) 9 months after the date of enactment 
                        of this subsection; or
                            ``(ii) September 30, 2010; and
                    ``(E) the aggregate amount of funds invested by the 
                Secretary under this subsection does not exceed 
                $15,000,000,000.
            ``(4) Lending incentives and penalties.--
                    ``(A) Penalties.--
                            ``(i) In general.--The interest rate or 
                        dividend to be paid on the Federal capital 
                        provided under this subsection by a community 
                        banking institution shall be increased to a 
                        penalty rate established by the Secretary, 
                        which shall be not less than 5 percentage 
                        points higher than the initial dividend or 
                        interest rate set for all community banking 
                        institutions assisted under this subsection if, 
                        by December 31, 2010, the community banking 
                        institution has failed--
                                    ``(I) to increase its total amount 
                                of commercial, industrial, and consumer 
                                loans by a dollar amount that is equal 
                                to the amount of capital received from 
                                the Secretary; or
                                    ``(II) to increase its total amount 
                                of commercial and industrial loans by a 
                                dollar amount that is at least 5 
                                percent greater than the smallest 
                                amount of such loans held by the 
                                community banking institution as of any 
                                quarter end of the first three quarters 
                                in calendar year 2009.
                            ``(ii) Exemption authority.--The Secretary 
                        may provide for exceptions to the provisions of 
                        this paragraph in the case of exigent 
                        circumstances, as determined by the Secretary.
                    ``(B) Incentives for commercial and industrial 
                loans.--Notwithstanding any other provision of this 
                title--
                            ``(i) for each dollar that a community 
                        banking institution that has received 
                        assistance under this subsection does in 
                        commercial and industrial loans above the 
                        amounts described in subparagraph (A)(i)(II)--
                                    ``(I) the community banking 
                                institution may redeem or repurchase 
                                one dollar of securities or stock held 
                                by the Secretary at a discount level 
                                established by the Secretary, except 
                                that such level shall be a minimum of 
                                20 percent below par; or
                                    ``(II) the Secretary may, by rule, 
                                allow for a reduction in the interest 
                                or dividend paid on the securities; and
                            ``(ii) if the dollar increase in lending by 
                        a community banking institution that has 
                        received assistance under this subsection 
                        exceeds the total Federal assistance under this 
                        subsection, the Secretary may establish rules 
                        for additional discounts on redemption of stock 
                        or securities held by the Secretary.
            ``(5) Definitions.--As used in this subsection--
                    ``(A) the term `community banking institution' 
                means a insured depository institution, or a holding 
                company thereof, having total assets of less than 
                $5,000,000,000; and
                    ``(B) the terms `insured depository institution' 
                and `appropriate Federal banking agency' have the same 
                meanings as in section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813).''.

Summary: Bank On Our Communities Act of 2009 - Amends the Emergency Economic Stabilization Act of 2008 (EESA) to provide that the needs and viability of insured depository institutions with total assets of less than $5 billion (small financial institutions) may be taken into account by the Secretary of the Treasury when exercising authority under EESA.

Establishes within the Treasury the Community Credit Renewal Fund to provide up to $15 billion in assistance to community banking institutions.

Prescribes the manner in which a community banking institution may establish its long-term viability by demonstrating receipt of capital from investors other than the Secretary.

Subjects a community banking institution to penalties if has failed by December 31, 2010, to: (1) increase its total amount of commercial, industrial, and consumer loans by a dollar amount equal to the amount of capital received from the Secretary; or (2) increase its total amount of commercial and industrial loans by a dollar amount at least 5 % greater than the smallest amount of such loans held by the community banking institution as of any quarter end of the first three quarters in calendar year 2009.

Prescribes lending incentives to spur commercial and industrial loans by a community banking institution.