CDFI Crisis Fund Act
Bill: S.4165 | Sponsor: Sen. Schatz, Brian (D-HI)
Policy area: Finance and Financial Sector

Summary:
CDFI Crisis Fund Act
This bill establishes the CDFI National Crisis Fund. The fund is authorized to make grants to community development financial institutions (CDFIs) providing financial products as emergency assistance to small businesses and low-income populations in certain circumstances. Furthermore, the fund is triggered by
Specified amounts in the fund are set aside for grants to Native and minority CDFIs.
The Government Accountability Office must report on the impact of the fund and provide recommendations.

To amend the Community Development Banking and Financial Institutions 
  Act of 1994 to establish a CDFI National Crisis Fund, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``CDFI Crisis Fund Act''.

SEC. 2. CDFI NATIONAL CRISIS FUND.

    (a) In General.--The Community Development Banking and Financial 
Institutions Act of 1994 (12 U.S.C. 4701 et seq.) is amended by 
inserting after section 122 (12 U.S.C. 4719) the following:

``SEC. 123. CDFI CRISIS FUND.

    ``(a) Definitions.--In this section:
            ``(1) Affected area.--The term `affected area' means--
                    ``(A) a State that is subject to a covered crisis;
                    ``(B) a county that is subject to a covered crisis 
                described in paragraph (3)(B); or
                    ``(C) a Tribal government that is--
                            ``(i) located in a State that is subject to 
                        a covered crisis; or
                            ``(ii) subject to a covered crisis.
            ``(2) Community development financial institution.--The 
        term `community development financial institution' shall 
        include small and emerging community development financial 
        institutions, as defined in the most recent relevant 
        regulations from the Department of the Treasury.
            ``(3) Covered crisis.--The term `covered crisis' means--
                    ``(A) the emergency involving Federal primary 
                responsibility determined to exist by the President 
                under section 501(b) of the Robert T. Stafford Disaster 
                Relief and Emergency Assistance Act (42 U.S.C. 5191(b)) 
                with respect to the Coronavirus disease 2019 (COVID-
                19);
                    ``(B) a major disaster exists in the State for 
                which assistance is authorized under section 408 of the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5174) for a county;
                    ``(C) a major disaster exists in the State for 
                which assistance is authorized under section 408 of the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5174) for individuals who 
                live in an area of the State in which a majority of the 
                residents of the State reside;
                    ``(D) an increase in statewide 6-month average 
                unemployment rate, seasonally adjusted, by not less 
                than 0.5 percentage points more than the lowest 
                recorded unemployment rate over the preceding 12-month 
                period; or
                    ``(E) an increase in the national 3-month average 
                unemployment rate, seasonally adjusted, by not less 
                than 0.5 percentage points more than the lowest 
                recorded unemployment rate over the preceding 12-month 
                period.
            ``(4) Crisis fund.--The term `Crisis Fund' means the CDFI 
        National Crisis Fund established under this section.
            ``(5) Low-income.--The term `low-income' means having an 
        income, as adjusted for family size, that is--
                    ``(A) for metropolitan areas, less than 80 percent 
                of the area median income; and
                    ``(B) for nonmetropolitan areas, the greater of--
                            ``(i) less than 80 percent of the area 
                        median income; or
                            ``(ii) less than 80 percent of the 
                        statewide nonmetropolitan area median income.
            ``(6) Minority community development financial 
        institution.--The term `minority community financial 
        institution' means a community development financial 
        institution that--
                    ``(A) if a privately-owned institution, 51 percent 
                is owned by one or more socially and economically 
                disadvantaged individuals;
                    ``(B) if publicly-owned, 51 percent of the stock is 
                owned by one or more socially and economically 
                disadvantaged individuals; and
                    ``(C) in the case of a mutual institution, where 
                the majority of the Board of Directors, account 
                holders, and the community which the institution 
                services is predominantly Black American, Native 
                American, Hispanic American, or Asian American.
            ``(7) Native community development financial institution.--
                    ``(A) In general.--The term `Native community 
                development financial institution' means a community 
                development financial institution--
                            ``(i) the activities of which not less than 
                        51 percent serve Native Americans; or
                            ``(ii) that is not less than 51 percent 
                        owned or controlled Native Americans.
                    ``(B) Native americans.--In this paragraph, the 
                term `Native Americans' has the meaning given the term 
                in section 3765 of title 38, United States Code.
            ``(8) State.--The term `State' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Virgin Islands, Guam, American Samoa, and the 
        Commonwealth of the Northern Mariana Islands.
            ``(9) Tribal government.--The term `Tribal government' has 
        the meaning given the term `Indian tribal government' in 
        section 102 of the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (42 U.S.C. 5122).
            ``(10) Very low-income.--The term `very low-income' means 
        having an income, as adjusted for family size, that is--
                    ``(A) for metropolitan areas, less than 50 percent 
                of the area median income; and
                    ``(B) for nonmetropolitan areas, the greater of--
                            ``(i) less than 50 percent of the area 
                        median income; or
                            ``(ii) less than 50 percent of the 
                        statewide nonmetropolitan area median income.
    ``(b) Purpose.--The purpose of this section is to create a fund to 
support community development financial institutions during acute 
periods of crisis in their mission to provide uniquely supportive 
financial products and services to otherwise underserved clients.
    ``(c) Establishment.--There is established in the Treasury the CDFI 
National Crisis Fund, which shall be within the Fund.
    ``(d) Availability of Crisis Fund.--Amounts in the Crisis Fund 
shall be available, until expended, to provide grants to community 
development financial institutions as provided under this section.
    ``(e) Grants.--
            ``(1) In general.--The Crisis Fund shall be authorized to 
        make grants to community development financial institutions to 
        enable those institutions to provide emergency assistance in 
        the form of financial products and services to help small 
        businesses and low-income and very low-income populations 
        respond to and recover from covered crises in the affected 
        area.
            ``(2) Application.--
                    ``(A) In general.--The Secretary shall--
                            ``(i) accept applications during the period 
                        beginning upon notification of a covered crisis 
                        under subsection (f) and ending on the date 
                        that is 6 months after the date of the 
                        notification;
                            ``(ii) approve or deny any application 
                        submitted for a grant under paragraph (1) not 
                        later than 30 days after receipt; and
                            ``(iii) upon request by an applicant for a 
                        grant under paragraph (1), provide technical 
                        assistance for the applicant.
                    ``(B) Selection formula.--
                            ``(i) In general.--Not later than 180 days 
                        after the date of enactment of this section, 
                        the Fund shall--
                                    ``(I) develop a selection formula 
                                as may be necessary for the selection 
                                of community development financial 
                                institutions to receive assistance 
                                under this section and guidance to aid 
                                those institutions in meeting the 
                                formula; and
                                    ``(II) post the information 
                                described in subclause (I) on a 
                                publicly available website.
                            ``(ii) Considerations.--In establishing the 
                        selection formula under clause (i), the Fund 
                        shall take into account--
                                    ``(I) the program capacity of a 
                                community development financial 
                                institution to provide emergency 
                                assistance in the form of financial 
                                products and services to help targeted 
                                populations or populations in 
                                investment areas recover from covered 
                                crises in the affected area; and
                                    ``(II) the need for simplicity in 
                                the selection formula given the varying 
                                capacities of community development 
                                financial institutions and the time 
                                frames required under this section.
            ``(3) Amount of grants.--
                    ``(A) Determination of amount.--The amount of a 
                grant made to a community development financial 
                institution under this section shall be determined 
                based on the previously demonstrated capacity of the 
                community development financial institution to make 
                impactful financial services and products available, as 
                determined by the Secretary of the Treasury.
                    ``(B) Grant amount.--
                            ``(i) Maximum.--With respect to grants made 
                        under this section, the grant shall be in an 
                        amount that is not more than 10 percent of the 
                        total amount in the Crisis Fund for each fiscal 
                        year in which the community development 
                        financial institution receives a grant.
                            ``(ii) Minimum.--The Fund shall establish 
                        minimum grant amounts under this section for 
                        each fiscal year in which a community 
                        development financial institution receives a 
                        grant under this section based on the 
                        demonstrated capacity of and the cost of grant 
                        requirements for the applicant.
                    ``(C) Limitation of assistance.--The total 
                aggregate amount outstanding and committed to any 
                community development financial institution in grants 
                under this section in any fiscal year shall not exceed 
                15 percent of the total amount of the Crisis Fund.
                    ``(D) Distribution of assistance.--The Secretary 
                shall disburse the full amount of a grant under this 
                section to an approved applicant not later than 30 days 
                after the date on which the application is approved.
                    ``(E) Set asides.--
                            ``(i) Native cdfis.--Of the amounts in the 
                        Crisis Fund, 10 percent shall be set aside for 
                        grants made to Native community development 
                        financial institutions, which set aside may 
                        also qualify under clause (ii).
                            ``(ii) Minority community development 
                        financial institutions.--Of the amounts in the 
                        Crisis Fund, 30 percent shall be set aside for 
                        grants made to minority community development 
                        financial institutions.
                    ``(F) Use of grant funds for more than 1 covered 
                crisis.--The Secretary may retroactively approve use of 
                grant funds for covered crises in affected areas that 
                took place after the grant was made.
            ``(4) Use of funds.--A recipient of a grant under this 
        section--
                    ``(A) shall use--
                            ``(i) not less than 90 percent of the grant 
                        funds for activities described in paragraph (1) 
                        in the affected area of the covered crisis;
                            ``(ii) not less than 25 percent of the 
                        grant funds for activities described in 
                        paragraph (1) that benefit very low-income 
                        individuals; and
                            ``(iii) not less than 15 percent of the 
                        grant funds for activities described in 
                        paragraph (1) that benefit individuals with 
                        incomes of not more than 30 percent of the area 
                        median income, which set aside may also qualify 
                        under clause (ii);
                    ``(B) may use not more than 10 percent of the grant 
                funds for administrative costs, costs related to 
                outreach and partnership building, and financial 
                products and services to areas surrounding the affected 
                area; and
                    ``(C) may use any remaining grant funds approved 
                for a covered crisis in an affected area for another 
                covered crisis in an affected area occurring after the 
                grant was made, if the Secretary approves the use of 
                those funds under paragraph (3)(F).
            ``(5) Unemployment measures for tribal governments.--The 
        Commissioner of the Bureau of Labor Statistics shall coordinate 
        with the Assistant Secretary of Indian Affairs to develop 
        reliable unemployment measures for American Indian, Native 
        Alaskan, and Native Hawaiian communities in order to understand 
        when the requirements for a covered crisis under subsection 
        (a)(1)(C) are met with respect to a Tribal government.
    ``(f) Notification of Covered Crisis.--
            ``(1) Emergency or major disaster.--The Administrator of 
        the Federal Emergency Management Agency, through the Secretary 
        of the Treasury, shall notify the Fund when the requirements 
        for a covered crisis under subparagraph (A) or (B) of 
        subsection (a)(1) are met, which shall include the date on 
        which the requirements are met and the relevant affected areas.
            ``(2) Unemployment.--The Secretary of Labor, through the 
        Secretary of the Treasury, shall notify the Crisis Fund when 
        the requirements for a covered crisis under subsection 
        (a)(1)(C) are met, which shall include the date on which the 
        requirements are met and the relevant affected areas, including 
        for Tribal governments.
    ``(g) Data.--The Fund shall post updates on--
            ``(1) the disbursements of funds from the Crisis Fund, 
        including the distribution of funds going to low-income and 
        very low-income populations and demographic data regarding the 
        areas and populations receiving funds from the Crisis Fund; and
            ``(2) all other applications made, denied, and disbursed on 
        a monthly basis during a covered crisis.
    ``(h) Repository of Best Practices.--Based on the recommendations 
of the Comptroller General of the United States and data that the 
Secretary of the Treasury may collect from recipients of grants under 
this section, the Secretary of the Treasury shall--
            ``(1) develop a publicly accessible database of best 
        practices for effective use of those grants, including past 
        case studies of success and other useful information; and
            ``(2) issue guidance, restrictions, and regulations with 
        respect to those grants.
    ``(i) Authorization of Appropriations.--
            ``(1) Crisis fund authorization.--To carry out this 
        section, there are authorized to be appropriated to the Crisis 
        Fund $2,000,000,000 for fiscal year 2023, to remain available 
        until expended.
            ``(2) Future fiscal years.--For every fiscal year following 
        fiscal year 2023, there is authorized to be appropriated to the 
        Crisis Fund an amount equal to the amount by which--
                    ``(A) $2,000,000,000 (or, if greater, the amount 
                determined for such fiscal year under paragraph (3)); 
                exceeds
                    ``(B) the balance of the Crisis Fund as of the last 
                day of the fiscal year preceding the fiscal year 
                involved.
            ``(3) Inflation adjustment.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount determined under this paragraph for a fiscal 
                year is the product of--
                            ``(i) $2,000,000,000; and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the Consumer Price Index for 
                                all-urban consumers published by the 
                                Department of Labor for the 12-month 
                                period ending with September of the 
                                preceding fiscal year; and
                                    ``(II) the Consumer Price Index for 
                                All-Urban Consumers published by the 
                                Department of Labor for the 12-month 
                                period ending with September 2019.
                    ``(B) Rule of application.--In no case shall the 
                application of this paragraph result in the application 
                under paragraph (2)(A) of an amount for a fiscal year 
                that is less than the amount that applied under such 
                paragraph (2)(A) for the preceding fiscal year.
            ``(4) Administrative expenses.--Of the amounts made 
        available under paragraph (1), the Crisis Fund may use not more 
        than 0.5 percent for administrative costs and expenses.
    ``(j) Regulations.--The Secretary of the Treasury may prescribe 
such regulations as necessary to carry out this section.
    ``(k) Report.--Not later than 1 year after the date of enactment of 
this section and periodically thereafter, the Comptroller General of 
the United States shall submit to Congress a report--
            ``(1) evaluating the impact of this section in meeting 
        intended outcomes, focusing on the use of the Crisis Fund in 
        aiding community development financial institutions to support 
        their communities and helping them respond to and recover from 
        natural disasters and economic crises; and
            ``(2) making recommendations to the Fund and to 
        Congress.''.
    (b) Technical and Conforming Amendment.--The table of contents in 
section 1(b) of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (Public Law 103-325; 108 Stat. 2160) is amended 
by inserting after the item relating to section 121 the following:

``Sec. 122. Grants to establish loan-loss reserve funds.
``Sec. 123. CDFI Crisis Fund.''.

SEC. 3. RESILIENCE GRANTS.

    Section 108 of the Community Development Banking and Financial 
Institutions Act of 1994 (12 U.S.C. 4707) is amended--
            (1) in subsection (a)(1)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(C) grants to community development financial 
                institutions (as defined in section 123) to improve 
                resilience to the impacts of covered crises (as defined 
                in section 123) in any State (as defined in section 
                123).'';
            (2) in subsection (d)--
                    (A) in paragraph (1), by striking ``paragraph (2)'' 
                and inserting ``paragraphs (2) and (3)'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4);
                    (C) by inserting after paragraph (2) the following:
            ``(3) Resilience grants.--With respect to resilience grants 
        described in subsection (a)(1)(C), each grant made in a fiscal 
        year shall be in an amount that is not more than 10 percent of 
        the total amount appropriated for resilience grants for that 
        fiscal year.''; and
                    (D) in paragraph (4), as so redesignated, by 
                striking ``paragraphs (1) and (2)'' and inserting 
                ``paragraphs (1), (2), and (3)'';
            (3) by redesignating subsections (e) through (h) as 
        subsections (f) through (i), respectively; and
            (4) by inserting after subsection (d) the following:
    ``(e) Resilience Grants.--
            ``(1) In general.--With respect to resilience grants 
        described in subsection (a)(1)(C), the Secretary of the 
        Treasury shall award the grants based on criteria established 
        by the Fund, including--
                    ``(A) making awards for projects that the Fund 
                determines will have the greatest impact in improving 
                resilience for low-income populations; and
                    ``(B) coordinating with the Federal Emergency 
                Management Agency, the Department of Housing and Urban 
                Development, and with the Small Business 
                Administration, as relevant, to ensure that the awards 
                meet unmet resilience needs.
            ``(2) Use of funds.--A recipient of a resilience grant 
        described in subsection (a)(1)(C) shall use--
                    ``(A) not less than 25 percent of the grant funds 
                for activities described in paragraph (1) that benefit 
                very low-income individuals; and
                    ``(B) not less than 15 percent of the grant funds 
                for activities described in paragraph (1) that benefit 
                individuals with incomes of not more than 30 percent of 
                the area median income.
            ``(3) Set asides.--
                    ``(A) Native cdfis.--Of the amounts made available 
                under this subsection, 10 percent shall be set aside 
                for resilience grants made to Native community 
                development financial institutions, which set aside may 
                also qualify under subparagraph (ii).
                    ``(B) Minority community development financial 
                institutions.--Of the amounts made available under this 
                subsection, 30 percent shall be set aside for grants 
                made to minority community development financial 
                institutions.
            ``(4) Repository of best practices.--Based on the 
        recommendations of the Comptroller General of the United States 
        and data that the Secretary of the Treasury may collect from 
        recipients of resilience grants described in subsection 
        (a)(1)(C), the Secretary of the Treasury shall--
                    ``(A) develop a publicly accessible database of 
                best practices for effective use of those grants, 
                including past case studies of success and other useful 
                information; and
                    ``(B) issue guidance, restrictions, and regulations 
                with respect to those grants.
            ``(5) Authorization of appropriations.--To provide 
        resilience grants described in subsection (a)(1)(C), there is 
        authorized to be appropriated to the Fund $30,000,000 for 
        fiscal year 2023, to remain available until expended.
            ``(6) Definitions.--In this subsection, the terms `low-
        income', `minority community development financial 
        institution', `Native community development financial 
        institution', and `very low-income' have the meanings given 
        those terms in section 123.''.
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