Title: Promoting and Advancing Communities of Color through Inclusive Lending Act
Policy area: Finance and Financial Sector

Summary:
Promoting and Advancing Communities of Color through Inclusive Lending Act
This bill revises requirements applicable to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) and addresses lending during the COVID-19 (i.e., coronavirus disease 2019) pandemic.
The bill establishes mandatory set-asides for (1) minority CDFIs under the CDFI Fund, and (2) CDFIs and MDIs under existing COVID-19 economic aid programs.
The bill also establishes an impact bank designation for certain small depository institutions that lend primarily to low-income borrowers and establishes programs for impact banks and MDIs regarding investments, technical assistance, and federal government deposits.
Finally, the Department of the Treasury must provide capital and interest-free loans to CDFIs, MDIs, impact banks, and credit unions that primarily serve low-income, underserved communities. The bill also reduces the CDFI Bond Guarantee Program minimum issuance amount from $100 million to $25 million for FY2020 and to $50 million for fiscal years thereafter.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7993 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 7993

To support the efforts of Community Development Financial Institutions 
(CDFIs), minority CDFIs, and minority depository institutions to serve 
consumers, small businesses, and minority-owned businesses, especially 
   in low-income and underserved communities, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 7, 2020

Ms. Waters (for herself, Mr. Clay, Mr. Green of Texas, Mr. Gonzalez of 
 Texas, Mr. Lawson of Florida, Ms. Pressley, Ms. Tlaib, Ms. Adams, Mr. 
Phillips, Ms. Garcia of Texas, Mr. Cleaver, Mrs. Beatty, Mr. Garcia of 
 Illinois, Mr. David Scott of Georgia, Mr. Gottheimer, and Mr. Meeks) 
 introduced the following bill; which was referred to the Committee on 
Financial Services, and in addition to the Committee on Small Business, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
To support the efforts of Community Development Financial Institutions 
(CDFIs), minority CDFIs, and minority depository institutions to serve 
consumers, small businesses, and minority-owned businesses, especially 
   in low-income and underserved communities, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Promoting and 
Advancing Communities of Color through Inclusive Lending Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings; sense of Congress.
Sec. 3. Strengthening minority community development financial 
                            institutions.
Sec. 4. Community Development Financial Institutions Fund.
Sec. 5. Minimum issuance amounts under the CDFI Bond Guarantee Program.
Sec. 6. Community Capital Investment Program.
Sec. 7. Ensuring Diversity in Community Banking.
Sec. 8. Establishment of Financial Agent Mentor-Protege Program.
Sec. 9. Study and report with respect to impact of programs on low- and 
                            moderate-income and minority communities.

SEC. 2. FINDINGS; SENSE OF CONGRESS.

    (a) Findings.--The Congress finds the following:
            (1) The Coronavirus 2019 (COVID-19) pandemic and the 
        resulting recession have led to more than 4.8 million cases and 
        at least 157,000 deaths in the United States as of August 6, 
        2020; a 7.6 percent increase in the unemployment rate from 
        February to June, or approximately 12 million more persons who 
        have lost their job; and an estimated 36 percent of renters and 
        4.1 million homeowners who are struggling to pay their rent and 
        mortgages.
            (2) According to the Centers for Disease Control, ``long-
        standing systemic health and social inequities have put some 
        members of racial and ethnic minority groups at increased risk 
        of getting COVID-19 or experiencing severe illness''.
            (3) Minority-owned businesses are also facing more 
        difficult economic circumstances than others as a result of the 
        COVID-19 pandemic. In April 2020, the Federal Reserve Bank of 
        New York reported that minority- and women-owned businesses 
        were not only more likely to show signs of limited financial 
        health, but also twice as likely to be classified as ``at 
        risk'' or ``distressed'' than their non-minority counterparts.
            (4) During the Coronavirus 2019 (COVID-19) pandemic, 
        community development financial institutions (CDFIs) and 
        minority depository institutions (MDIs) have delivered needed 
        capital and relief to underserved communities, many of which 
        have borne a disproportionate impact of the COVID-19 pandemic. 
        Through July 31, 2020, CDFIs and MDIs have provided more than 
        $16.2 billion in Paycheck Protection Program (PPP) loans to 
        small businesses with a smaller median loan size of about 
        $75,000 compared to the overall program median loan size of 
        $103,000.
            (5) In addition to establishing relief funds and services 
        for local businesses and individuals experiencing loss of 
        income, CDFIs and MDIs have provided mortgage forbearances, 
        loan deferments, and modifications to help address the needs of 
        their borrowers. CDFIs and MDIs are reaching underserved 
        communities and minority-owned businesses at a critical time.
            (6) The Community Development Financial Institutions Fund 
        (CDFI Fund) is an agency of the U.S. Department of the Treasury 
        and was established by the Riegle Community Development and 
        Regulatory Improvement Act of 1994. The mission of the CDFI 
        Fund is ``to expand economic opportunity for underserved people 
        and communities by supporting the growth and capacity of a 
        national network of community development lenders, investors, 
        and financial service providers''. As of July 13, 2020, there 
        were 1,129 certified CDFIs in all 50 States, District of 
        Columbia, Guam, and Puerto Rico.
            (7) Following the 2008 financial crisis and the 
        disproportionate impact the Great Recession had on minority 
        communities, the number of MDI banks fell more than 30 percent 
        over the following decade, to 143 as of the first quarter of 
        2020. Meanwhile, MDI credit unions have seen similar declines, 
        with more than one-third of such institutions disappearing 
        since 2013.
            (8) The Committee on Financial Services of the House of 
        Representatives has examined the importance of CDFIs and MDIs 
        through three hearings held during the 116th Congress. At these 
        hearings, the Committee received testimony from 13 witnesses, 
        most of whom were representatives of CDFIs or MDIs, and four of 
        whom were Federal regulators. These hearings include:
                    (A) October 22, 2019, ``An Examination of the 
                Decline of Minority Depository Institutions and the 
                Impact on Underserved Communities''.
                    (B) November 20, 2019, ``An Examination of 
                Regulators' Efforts to Preserve and Promote Minority 
                Depository Institutions''.
                    (C) June 3, 2020, Virtual Hearing--``Promoting 
                Inclusive Lending During the Pandemic: Community 
                Development Financial Institutions and Minority 
                Depository Institutions''.
        At these hearings, the Committee discussed the opportunities 
        and challenges facing CDFIs and MDIs. The Committee discussed 9 
        different pieces of legislation to address some of these 
        challenges and fully support the work of MDIs and CDFIs.
    (b) Sense of Congress.--The following is the sense of the Congress:
            (1) The Department of the Treasury, Board of Governors of 
        the Federal Reserve System, Small Business Administration 
        (SBA), Office of the Comptroller of the Currency, Federal 
        Deposit Insurance Corporation, National Credit Union 
        Administration, and other Federal agencies should take steps to 
        support, engage with, and utilize minority depository 
        institutions and community development financial institutions 
        in the near term, especially as they carry out programs to 
        respond to the COVID-19 pandemic, and the long term.
            (2) The Department of the Treasury and prudential 
        regulators should establish a strategic plan identifying 
        concrete steps that they can take to support existing minority 
        depository institutions, as well as the formation of new 
        minority depository institutions consistent with the goals 
        established in the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (FIRREA) to preserve and promote 
        minority depository institutions.
            (3) Congress should increase funding and make other 
        enhancements, including those provided by this legislation, to 
        enhance the effectiveness of the CDFI Fund, especially reforms 
        to support minority-owned and minority led CDFIs in times of 
        crisis and beyond.
            (4) Congress should conduct robust and ongoing oversight of 
        the Department of the Treasury, CDFI Fund, Federal prudential 
        regulators, SBA, and other Federal agencies to ensure they 
        fulfill their obligations under the law as well as implement 
        this Act and other laws in a manner that supports and fully 
        utilizes minority depository institutions and community 
        development financial intuitions, as appropriate.

SEC. 3. STRENGTHENING MINORITY COMMUNITY DEVELOPMENT FINANCIAL 
              INSTITUTIONS.

    (a) Minority Community Development Financial Institution Set-Aside 
in Providing Assistance.--
            (1) In general.--Section 108 of the Community Development 
        Banking and Financial Institutions Act of 1994 (12 U.S.C. 4707) 
        is amended by adding at the end the following:
    ``(i) Minority Community Development Financial Institution Set-
Aside in Providing Assistance.--Notwithstanding any other provision of 
law, in providing any assistance, the Fund shall reserve 40 percent of 
such assistance for minority community development financial 
institutions.''.
            (2) Definitions.--Section 103 of the Community Development 
        Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702) 
        is amended by adding at the end the following:
            ``(22) Minority community development financial institution 
        definitions.--
                    ``(A) Minority.--The term `minority' means any 
                Black American, Native American, Hispanic American, or 
                Asian American.
                    ``(B) Minority community development financial 
                institution.--The term `minority community development 
                financial institution' means a community development 
                financial institution that--
                            ``(i) if a privately owned institution, 51 
                        percent is owned by one or more socially and 
                        economically disadvantaged individuals;
                            ``(ii) if publicly owned, 51 percent of the 
                        stock is owned by one or more socially and 
                        economically disadvantaged individuals;
                            ``(iii) 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 
                        minority; and
                            ``(iv) in the case of any other 
                        institution, is a minority-owned or minority-
                        led institution, as determined by the 
                        Administrator.''.
    (b) Office of Minority Community Development Financial 
Institutions.--Section 104 of the Community Development Banking and 
Financial Institutions Act of 1994 (12 U.S.C. 4703) is amended by 
adding at the end the following:
    ``(l) Office of Minority Community Development Financial 
Institutions.--
            ``(1) Establishment.--There is established within the Fund 
        an Office of Minority Community Development Financial 
        Institutions, which shall oversee assistance provided by the 
        Fund to minority community development financial institutions.
            ``(2) Deputy director.--The head of the Office shall be the 
        Deputy Director of Minority Community Development Financial 
        Institutions, who shall report directly to the Administrator of 
        the Fund.''.
    (c) Reporting on Minority Community Development Financial 
Institutions.--Section 117 of the Community Development Banking and 
Financial Institutions Act of 1994 (12 U.S.C. 4716) is amended by 
adding at the end the following:
    ``(g) Reporting on Minority Community Development Financial 
Institutions.--Each report required under subsection (a) shall include 
a description of the extent to which assistance from the Fund are 
provided to minority community development financial institutions.''.

SEC. 4. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND.

    (a) In General.--Of any unobligated amounts that were appropriated 
to the fund established under section 5302(a)(1) of title 31, United 
States Code, by section 4027 of the CARES Act (15 U.S.C. 9061), 
$5,000,000,000 shall be transferred to the Community Development 
Financial Institutions Fund for fiscal years 2020 and 2021, for 
providing financial assistance and technical assistance under 
subparagraphs (A) and (B) of section 108(a)(1) of the Community 
Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 
4707(a)(1)), except that subsections (d) and (e) of such section 108 
shall not apply to the provision of such assistance, for the Bank 
Enterprise Award program, and for financial assistance, technical 
assistance, training, and outreach programs designed to benefit Native 
American, Native Hawaiian, and Alaska Native communities and provided 
primarily through qualified community development lender organizations 
with experience and expertise in community development banking and 
lending in Indian country, Native American organizations, Tribes and 
Tribal organizations, and other suitable providers. Of such amount, not 
less than $2,000,000,000 shall be for providing financial assistance, 
technical assistance, awards, training, and outreach programs described 
above to recipients that are minority lending institutions.
    (b) Definitions.--For purposes of this section:
            (1) Minority lending institution.--The term ``minority 
        lending institution'' means any depository institution, loan 
        fund, or other 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;
                    (C) in the case of a mutual institution, where the 
                majority of the Board of Directors, account holders, 
                and the community which it services is predominantly 
                minority; and
                    (D) in the case of any other institution, is a 
                minority-owned or minority-led institution, as 
                determined by the Administrator of the Community 
                Development Financial Institutions Fund.
            (2) Minority.--The term ``minority'' means any Black 
        American, Native American, Hispanic American, or Asian 
        American.

SEC. 5. MINIMUM ISSUANCE AMOUNTS UNDER THE CDFI BOND GUARANTEE PROGRAM.

    (a) Reduction for Fiscal Year 2020.--
            (1) In general.--Section 114A(e)(2)(B) of the Riegle 
        Community Development and Regulatory Improvement Act of 1994 
        (12 U.S.C. 4713a(e)(2)(B)) is amended by striking 
        ``$100,000,000'' and inserting ``$25,000,000''.
            (2) Rule of application.--The Notice of Guarantee 
        Availability issued for the Bond Guarantee Program in fiscal 
        year 2019 (CFDA 21.011) shall apply for purposes of carrying 
        out the Program (as defined under section 114A(a) of the Riegle 
        Community Development and Regulatory Improvement Act of 1994) 
        with regard to commitments to guarantee bonds and notes during 
        fiscal year 2020.
    (b) Permanent Adjustment.--Effective October 1, 2020, section 
114A(e)(2)(B) of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4713a(e)(2)(B)) is amended by 
striking ``$25,000,000'' and inserting ``$50,000,000''.

SEC. 6. COMMUNITY CAPITAL INVESTMENT PROGRAM.

    Section 4003 of the CARES Act (15 U.S.C. 9042) is amended by adding 
at the end the following:
    ``(i) Community Capital Investment Program.--
            ``(1) In general.--The Secretary of the Treasury shall 
        establish a Community Capital Investment Program (the 
        `Program') to support the efforts of community investment 
        institutions to provide loans and forbearance for small 
        businesses, minority-owned businesses, and consumers, 
        especially in low-income and underserved communities, by--
                    ``(A) providing direct capital investments in 
                community investment institutions; and
                    ``(B) providing loans to community investment 
                institutions--
                            ``(i) that are interest-free loans;
                            ``(ii) that have a loan term of 5 years; 
                        and
                            ``(iii) with respect to which no loan 
                        payment is required until at least the end of 
                        the 6-month period beginning on the date the 
                        loan is made, or such longer term as the 
                        Secretary may determine appropriate.
            ``(2) Application date.--The Secretary shall begin 
        accepting applications for capital investments and loans under 
        the Program not later than the end of the 10-day period 
        beginning on the date of enactment of this subsection.
            ``(3) Community investment plan.--At the time that an 
        applicant submits an application to the Secretary for a capital 
        investment under the Program, the applicant shall--
                    ``(A) provide the Secretary with a Community 
                Investment Plan that specifies how the applicant 
                intends to use the capital investment or loans made 
                available under the Program to provide loans and 
                forbearance for small businesses, minority-owned 
                businesses, and consumers, especially in low-income and 
                underserved communities; and
                    ``(B) include with such application an attestation 
                by the applicant that the applicant--
                            ``(i) does not own, service, or offer any 
                        financial product at an annual percentage rate 
                        of more than 36 percent interest, as defined in 
                        section 987(i)(4) of title 10, United States 
                        Code; and
                            ``(ii) is compliant with all State interest 
                        rate laws.
            ``(4) Dividend rate.--Any preferred stock or other 
        financial instrument issued to the Secretary in exchange for a 
        capital investment under the Program shall carry a dividend or 
        interest rate that does not exceed 1 percent.
            ``(5) Restrictions.--The restrictions described under 
        subsection (c)(3)(A)(ii) shall apply to capital investments and 
        loans made under this subsection.
            ``(6) Available amounts.--In carrying out the Program, the 
        Secretary shall use amounts made available under subsection 
        (b), notwithstanding the limitations on the use of such funds 
        under paragraphs (1) through (4) of such subsection (b).
            ``(7) MDI set-aside.--At least $3,000,000,000 of the direct 
        capital investments and loans made by the Secretary under the 
        Program shall be made to minority depository institutions.
            ``(8) Treatment of capital investments.--In making any 
        capital investment under the Program, the Secretary shall 
        ensure that the terms of the investment are designed to ensure 
        the investment receives Tier 1 capital treatment.
            ``(9) Collection of data.--Notwithstanding the Equal 
        Opportunity Credit Act (15 U.S.C. 1691 et seq.)--
                    ``(A) a community investment institution may 
                collect data described in section 701(a)(1) of that Act 
                (15 U.S.C. 1691(a)(1)) from borrowers and applicants 
                for credit for the purpose of monitoring compliance 
                under the Community Investment Plan required under 
                paragraph (3); and
                    ``(B) a community investment institution that 
                collects the data described in subparagraph (A) shall 
                not be subject to adverse action related to that 
                collection by the Bureau of Consumer Financial 
                Protection or any other Federal agency.
            ``(10) Definitions.--In this subsection, subsection (j), 
        and subsection (k):
                    ``(A) Community investment institution.--The term 
                `community investment institution' means--
                            ``(i) a community development financial 
                        institution, as defined under section 103 of 
                        the Riegle Community Development and Regulatory 
                        Improvement Act of 1994 (12 U.S.C. 4702);
                            ``(ii) an impact credit union;
                            ``(iii) an impact bank; and
                            ``(iv) a minority depository institution, 
                        as defined under section 308 of the Financial 
                        Institutions Reform, Recovery, and Enforcement 
                        Act of 1989 (12 U.S.C. 1463 note).
                    ``(B) Credit union.--The term `credit union' has 
                the meaning given the terms State credit union and 
                Federal credit union under section 101 of the Federal 
                Credit Union Act (12 U.S.C. 1752).
                    ``(C) Impact credit union.--The term `impact credit 
                union' means a credit union that--
                            ``(i) has total consolidated assets of less 
                        than $10,000,000,000; and
                            ``(ii) extends at least 50 percent of the 
                        loans extended by the credit union to borrowers 
                        who are low-income borrowers, as determined by 
                        the Secretary.
                    ``(D) Impact bank.--The term `impact bank' means a 
                depository institution (as defined under section 3 of 
                the Federal Deposit Insurance Act) that--
                            ``(i) has total consolidated assets of less 
                        than $10,000,000,000; and
                            ``(ii) extends at least 50 percent of the 
                        loans extended by the institution to borrowers 
                        who are low-income borrowers, as determined by 
                        the Secretary.
    ``(j) Application of the Military Lending Act.--
            ``(1) In general.--No community investment institution that 
        receives an equity investment under subsection (i) shall, for 
        so long as the investment continues, make any loan at an 
        annualized percentage rate above 36 percent, as determined in 
        accordance with section 987(b) of title 10, United States Code 
        (commonly known as the `Military Lending Act)'.
            ``(2) No exemptions permitted.--The exemption authority of 
        the Bureau under section 105(f) of the Truth in Lending Act (15 
        U.S.C. 1604(f)) shall not apply with respect to this 
        subsection.''.

SEC. 7. ENSURING DIVERSITY IN COMMUNITY BANKING.

    (a) Sense of Congress on Funding the Loan-Loss Reserve Fund for 
Small Dollar Loans.--The sense of Congress is the following:
            (1) The Community Development Financial Institutions Fund 
        (the ``CDFI Fund'') is an agency of the Department of the 
        Treasury, and was established by the Riegle Community 
        Development and Regulatory Improvement Act of 1994. The mission 
        of the CDFI Fund is ``to expand economic opportunity for 
        underserved people and communities by supporting the growth and 
        capacity of a national network of community development 
        lenders, investors, and financial service providers''. A 
        community development financial institution (a ``CDFI'') is a 
        specialized financial institution serving low-income 
        communities and a Community Development Entity (a ``CDE'') is a 
        domestic corporation or partnership that is an intermediary 
        vehicle for the provision of loans, investments, or financial 
        counseling in low-income communities. The CDFI Fund certifies 
        CDFIs and CDEs. Becoming a certified CDFI or CDE allows 
        organizations to participate in various CDFI Fund programs as 
        follows:
                    (A) The Bank Enterprise Award Program, which 
                provides FDIC-insured depository institutions awards 
                for a demonstrated increase in lending and investments 
                in distressed communities and CDFIs.
                    (B) The CDFI Program, which provides Financial and 
                Technical Assistance awards to CDFIs to reinvest in the 
                CDFI, and to build the capacity of the CDFI, including 
                financing product development and loan loss reserves.
                    (C) The Native American CDFI Assistance Program, 
                which provides CDFIs and sponsoring entities Financial 
                and Technical Assistance awards to increase lending and 
                grow the number of CDFIs owned by Native Americans to 
                help build capacity of such CDFIs.
                    (D) The New Market Tax Credit Program, which 
                provides tax credits for making equity investments in 
                CDEs that stimulate capital investments in low-income 
                communities.
                    (E) The Capital Magnet Fund, which provides awards 
                to CDFIs and nonprofit affordable housing organizations 
                to finance affordable housing solutions and related 
                economic development activities.
                    (F) The Bond Guarantee Program, a source of long-
                term, patient capital for CDFIs to expand lending and 
                investment capacity for community and economic 
                development purposes.
            (2) The Department of the Treasury is authorized to create 
        multi-year grant programs designed to encourage low-to-moderate 
        income individuals to establish accounts at federally insured 
        banks, and to improve low-to-moderate income individuals' 
        access to such accounts on reasonable terms.
            (3) Under this authority, grants to participants in CDFI 
        Fund programs may be used for loan-loss reserves and to 
        establish small-dollar loan programs by subsidizing related 
        losses. These grants also allow for the providing recipients 
        with the financial counseling and education necessary to 
        conduct transactions and manage their accounts. These loans 
        provide low-cost alternatives to payday loans and other 
        nontraditional forms of financing that often impose excessive 
        interest rates and fees on borrowers, and lead millions of 
        Americans to fall into debt traps. Small-dollar loans can only 
        be made pursuant to terms, conditions, and practices that are 
        reasonable for the individual consumer obtaining the loan.
            (4) Program participation is restricted to eligible 
        institutions, which are limited to organizations listed in 
        section 501(c)(3) of the Internal Revenue Code and exempt from 
        tax under 501(a) of such Code, federally insured depository 
        institutions, community development financial institutions and 
        State, local, or Tribal government entities.
            (5) Since its founding, the CDFI Fund has awarded over 
        $3,300,000,000 to CDFIs and CDEs, allocated $54,000,000,000 in 
        tax credits, and $1,510,000,000 in bond guarantees. According 
        to the CDFI Fund, some programs attract as much as $10 in 
        private capital for every $1 invested by the CDFI Fund. The 
        Administration and the Congress should prioritize appropriation 
        of funds for the loan loss reserve fund and technical 
        assistance programs administered by the Community Development 
        Financial Institution Fund.
    (b) Definitions.--In this section:
            (1) Community development financial institution.--The term 
        ``community development financial institution'' has the meaning 
        given under section 103 of the Riegle Community Development and 
        Regulatory Improvement Act of 1994 (12 U.S.C. 4702).
            (2) Minority depository institution.--The term ``minority 
        depository institution'' has the meaning given under section 
        308 of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1463 note), as amended by 
        this Act.
    (c) Establishment of Impact Bank Designation.--
            (1) In general.--Each Federal banking agency shall 
        establish a program under which a depository institution with 
        total consolidated assets of less than $10,000,000,000 may 
        elect to be designated as an impact bank if the total dollar 
        value of the loans extended by such depository institution to 
        low-income borrowers is greater than or equal to 50 percent of 
        the assets of such bank.
            (2) Notification of eligibility.--Based on data obtained 
        through examinations of depository institutions, the 
        appropriate Federal banking agency shall notify a depository 
        institution if the institution is eligible to be designated as 
        an impact bank.
            (3) Application.--Regardless of whether or not it has 
        received a notice of eligibility under paragraph (1), a 
        depository institution may submit an application to the 
        appropriate Federal banking agency--
                    (A) requesting to be designated as an impact bank; 
                and
                    (B) demonstrating that the depository institution 
                meets the applicable qualifications.
            (4) Limitation on additional data requirements.--The 
        Federal banking agencies may only impose additional data 
        collection requirements on a depository institution under this 
        subsection if such data is--
                    (A) necessary to process an application submitted 
                by the depository institution to be designated an 
                impact bank; or
                    (B) with respect to a depository institution that 
                is designated as an impact bank, necessary to ensure 
                the depository institution's ongoing qualifications to 
                maintain such designation.
            (5) Removal of designation.--If the appropriate Federal 
        banking agency determines that a depository institution 
        designated as an impact bank no longer meets the criteria for 
        such designation, the appropriate Federal banking agency shall 
        rescind the designation and notify the depository institution 
        of such rescission.
            (6) Reconsideration of designation; appeals.--Under such 
        procedures as the Federal banking agencies may establish, a 
        depository institution may--
                    (A) submit to the appropriate Federal banking 
                agency a request to reconsider a determination that 
                such depository institution no longer meets the 
                criteria for the designation; or
                    (B) file an appeal of such determination.
            (7) Rulemaking.--Not later than 1 year after the date of 
        the enactment of this Act, the Federal banking agencies shall 
        jointly issue rules to carry out the requirements of this 
        subsection, including by providing a definition of a low-income 
        borrower.
            (8) Reports.--Each Federal banking agency shall submit an 
        annual report to the Congress containing a description of 
        actions taken to carry out this subsection.
            (9) Federal deposit insurance act definitions.--In this 
        subsection, the terms ``depository institution'', ``appropriate 
        Federal banking agency'', and ``Federal banking agency'' have 
        the meanings given such terms, respectively, in section 3 of 
        the Federal Deposit Insurance Act (12 U.S.C. 1813).
    (d) Minority Depositories Advisory Committees.--
            (1) Establishment.--Each covered regulator shall establish 
        an advisory committee to be called the ``Minority Depositories 
        Advisory Committee''.
            (2) Duties.--Each Minority Depositories Advisory Committee 
        shall provide advice to the respective covered regulator on 
        meeting the goals established by section 308 of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 1463 note) to preserve the present number of covered 
        minority institutions, preserve the minority character of 
        minority-owned institutions in cases involving mergers or 
        acquisitions, provide technical assistance, and encourage the 
        creation of new covered minority institutions. The scope of the 
        work of each such Minority Depositories Advisory Committee 
        shall include an assessment of the current condition of covered 
        minority institutions, what regulatory changes or other steps 
        the respective agencies may be able to take to fulfill the 
        requirements of such section 308, and other issues of concern 
        to covered minority institutions.
            (3) Membership.--
                    (A) In general.--Each Minority Depositories 
                Advisory Committee shall consist of no more than 10 
                members, who--
                            (i) shall serve for one two-year term;
                            (ii) shall serve as a representative of a 
                        depository institution or an insured credit 
                        union with respect to which the respective 
                        covered regulator is the covered regulator of 
                        such depository institution or insured credit 
                        union; and
                            (iii) shall not receive pay by reason of 
                        their service on the advisory committee, but 
                        may receive travel or transportation expenses 
                        in accordance with section 5703 of title 5, 
                        United States Code.
                    (B) Diversity.--To the extent practicable, each 
                covered regulator shall ensure that the members of the 
                Minority Depositories Advisory Committee of such agency 
                reflect the diversity of covered minority institutions.
            (4) Meetings.--
                    (A) In general.--Each Minority Depositories 
                Advisory Committee shall meet not less frequently than 
                twice each year.
                    (B) Notice and invitations.--Each Minority 
                Depositories Advisory Committee shall--
                            (i) notify the Committee on Financial 
                        Services of the House of Representatives and 
                        the Committee on Banking, Housing, and Urban 
                        Affairs of the Senate in advance of each 
                        meeting of the Minority Depositories Advisory 
                        Committee; and
                            (ii) invite the attendance at each meeting 
                        of the Minority Depositories Advisory Committee 
                        of--
                                    (I) one member of the majority 
                                party and one member of the minority 
                                party of the Committee on Financial 
                                Services of the House of 
                                Representatives and the Committee on 
                                Banking, Housing, and Urban Affairs of 
                                the Senate; and
                                    (II) one member of the majority 
                                party and one member of the minority 
                                party of any relevant subcommittees of 
                                such committees.
            (5) No termination of advisory committees.--The termination 
        requirements under section 14 of the Federal Advisory Committee 
        Act (5 U.S.C. App.) shall not apply to a Minority Depositories 
        Advisory Committee established pursuant to this subsection.
            (6) Definitions.--In this subsection:
                    (A) Covered regulator.--The term ``covered 
                regulator'' means the Comptroller of the Currency, the 
                Board of Governors of the Federal Reserve System, the 
                Federal Deposit Insurance Corporation, and the National 
                Credit Union Administration.
                    (B) Covered minority institution.--The term 
                ``covered minority institution'' means a minority 
                depository institution (as defined in section 308(b) of 
                the Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989 (12 U.S.C. 1463 note)).
                    (C) Depository institution.--The term ``depository 
                institution'' has the meaning given under section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813).
                    (D) Insured credit union.--The term ``insured 
                credit union'' has the meaning given in section 101 of 
                the Federal Credit Union Act (12 U.S.C. 1752).
            (7) Technical amendment.--Section 308(b) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 1463 note) is amended by adding at the end the following 
        new paragraph:
            ``(3) Depository institution.--The term `depository 
        institution' means an `insured depository institution' (as 
        defined in section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813)) and an insured credit union (as defined in 
        section 101 of the Federal Credit Union Act (12 U.S.C. 
        1752)).''.
    (e) Federal Deposits in Minority Depository Institutions.--
            (1) In general.--Section 308 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 
        note) is amended--
                    (A) by adding at the end the following new 
                subsection:
    ``(d) Federal Deposits.--The Secretary of the Treasury shall ensure 
that deposits made by Federal agencies in minority depository 
institutions and impact banks are collateralized or insured, as 
determined by the Secretary. Such deposits shall include reciprocal 
deposits as defined in section 337.6(e)(2)(v) of title 12, Code of 
Federal Regulations (as in effect on March 6, 2019).''; and
                    (B) in subsection (b), as amended by section 6(g), 
                by adding at the end the following new paragraph:
            ``(4) Impact bank.--The term `impact bank' means a 
        depository institution designated by the appropriate Federal 
        banking agency pursuant to section 7(c) of the Promoting and 
        Advancing Communities of Color through Inclusive Lending 
        Act.''.
            (2) Technical amendments.--Section 308 of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 1463 note) is amended--
                    (A) in the matter preceding paragraph (1), by 
                striking ``section--'' and inserting ``section:''; and
                    (B) in the paragraph heading for paragraph (1), by 
                striking ``financial'' and inserting ``depository''.
    (f) Minority Bank Deposit Program.--
            (1) In general.--Section 1204 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
        note) is amended to read as follows:

``SEC. 1204. EXPANSION OF USE OF MINORITY DEPOSITORY INSTITUTIONS.

    ``(a) Minority Bank Deposit Program.--
            ``(1) Establishment.--There is established a program to be 
        known as the `Minority Bank Deposit Program' to expand the use 
        of minority depository institutions.
            ``(2) Administration.--The Secretary of the Treasury, 
        acting through the Fiscal Service, shall--
                    ``(A) on application by a depository institution or 
                credit union, certify whether such depository 
                institution or credit union is a minority depository 
                institution;
                    ``(B) maintain and publish a list of all depository 
                institutions and credit unions that have been certified 
                pursuant to subparagraph (A); and
                    ``(C) periodically distribute the list described in 
                subparagraph (B) to--
                            ``(i) all Federal departments and agencies;
                            ``(ii) interested State and local 
                        governments; and
                            ``(iii) interested private sector 
                        companies.
            ``(3) Inclusion of certain entities on list.--A depository 
        institution or credit union that, on the date of the enactment 
        of this section, has a current certification from the Secretary 
        of the Treasury stating that such depository institution or 
        credit union is a minority depository institution shall be 
        included on the list described under paragraph (2)(B).
    ``(b) Expanded Use Among Federal Departments and Agencies.--
            ``(1) In general.--Not later than 1 year after the 
        establishment of the program described in subsection (a), the 
        head of each Federal department or agency shall develop and 
        implement standards and procedures to prioritize, to the 
        maximum extent possible as permitted by law and consistent with 
        principles of sound financial management, the use of minority 
        depository institutions to hold the deposits of each such 
        department or agency.
            ``(2) Report to congress.--Not later than 2 years after the 
        establishment of the program described in subsection (a), and 
        annually thereafter, the head of each Federal department or 
        agency shall submit to Congress a report on the actions taken 
        to increase the use of minority depository institutions to hold 
        the deposits of each such department or agency.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Credit union.--The term `credit union' has the 
        meaning given the term `insured credit union' in section 101 of 
        the Federal Credit Union Act (12 U.S.C. 1752).
            ``(2) Depository institution.--The term `depository 
        institution' has the meaning given in section 3 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813).
            ``(3) Minority depository institution.--The term `minority 
        depository institution' has the meaning given that term under 
        section 308 of this Act.''.
            (2) Conforming amendments.--The following provisions are 
        amended by striking ``1204(c)(3)'' and inserting ``1204(c)'':
                    (A) Section 808(b)(3) of the Community Reinvestment 
                Act of 1977 (12 U.S.C. 2907(b)(3)).
                    (B) Section 40(g)(1)(B) of the Federal Deposit 
                Insurance Act (12 U.S.C. 1831q(g)(1)(B)).
                    (C) Section 704B(h)(4) of the Equal Credit 
                Opportunity Act (15 U.S.C. 1691c-2(h)(4)).
    (g) Diversity Report and Best Practices.--
            (1) Annual report.--Each covered regulator shall submit to 
        Congress an annual report on diversity including the following:
                    (A) Data, based on voluntary self-identification, 
                on the racial, ethnic, and gender composition of the 
                examiners of each covered regulator, disaggregated by 
                length of time served as an examiner.
                    (B) The status of any examiners of covered 
                regulators, based on voluntary self-identification, as 
                a veteran.
                    (C) Whether any covered regulator, as of the date 
                on which the report required under this subsection is 
                submitted, has adopted a policy, plan, or strategy to 
                promote racial, ethnic, and gender diversity among 
                examiners of the covered regulator.
                    (D) Whether any special training is developed and 
                provided for examiners related specifically to working 
                with depository institutions and credit unions that 
                serve communities that are predominantly minorities, 
                low income, or rural, and the key focus of such 
                training.
            (2) Best practices.--Each Office of Minority and Women 
        Inclusion of a covered regulator shall develop, provide to the 
        head of the covered regulator, and make publicly available best 
        practices--
                    (A) for increasing the diversity of candidates 
                applying for examiner positions, including through 
                outreach efforts to recruit diverse candidate to apply 
                for entry-level examiner positions; and
                    (B) for retaining and providing fair consideration 
                for promotions within the examiner staff for purposes 
                of achieving diversity among examiners.
            (3) Covered regulator defined.--In this subsection, the 
        term ``covered regulator'' means the Comptroller of the 
        Currency, the Board of Governors of the Federal Reserve System, 
        the Federal Deposit Insurance Corporation, and the National 
        Credit Union Administration.
    (h) Investments in Minority Depository Institutions and Impact 
Banks.--
            (1) Control for certain institutions.--Section 7(j)(8)(B) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)(8)(B)) 
        is amended to read as follows:
            ``(B) `control' means the power, directly or indirectly--
                    ``(i) to direct the management or policies of an 
                insured depository institution; or
                    ``(ii)(I) with respect to an insured depository 
                institution, of a person to vote 25 per centum or more 
                of any class of voting securities of such institution; 
                or
                    ``(II) with respect to an insured depository 
                institution that is an impact bank (as designated 
                pursuant to section 7(c) of Promoting and Advancing 
                Communities of Color through Inclusive Lending Act) or 
                a minority depository institution (as defined in 
                section 308(b) of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989), of an 
                individual to vote 30 percent or more of any class of 
                voting securities of such an impact bank or a minority 
                depository institution.''.
            (2) Rulemaking.--The Federal banking agencies (as defined 
        in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813)) shall jointly issue rules for de novo minority 
        depository institutions and de novo impact banks (as designated 
        pursuant to subsection (c)) to allow 3 years to meet the 
        capital requirements otherwise applicable to minority 
        depository institutions and impact banks.
            (3) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Federal banking agencies shall 
        jointly submit to Congress a report on--
                    (A) the principal causes for the low number of de 
                novo minority depository institutions during the 10-
                year period preceding the date of the report;
                    (B) the main challenges to the creation of de novo 
                minority depository institutions and de novo impact 
                banks; and
                    (C) regulatory and legislative considerations to 
                promote the establishment of de novo minority 
                depository institutions and de novo impact banks.
    (i) Report on Covered Mentor-Protege Programs.--
            (1) Report.--Not later than 6 months after the date of the 
        enactment of this Act and annually thereafter, the Secretary of 
        the Treasury shall submit to Congress a report on participants 
        in a covered mentor-protege program, including--
                    (A) an analysis of outcomes of such program;
                    (B) the number of minority depository institutions 
                that are eligible to participate in such program but do 
                not have large financial institution mentors; and
                    (C) recommendations for how to match such minority 
                depository institutions with large financial 
                institution mentors.
            (2) Definitions.--In this subsection:
                    (A) Covered mentor-protege program.--The term 
                ``covered mentor-protege program'' means a mentor-
                protege program established by the Secretary of the 
                Treasury pursuant to section 45 of the Small Business 
                Act (15 U.S.C. 657r).
                    (B) Large financial institution.--The term ``large 
                financial institution'' means any entity--
                            (i) regulated by the Comptroller of the 
                        Currency, the Board of Governors of the Federal 
                        Reserve System, the Federal Deposit Insurance 
                        Corporation, or the National Credit Union 
                        Administration; and
                            (ii) that has total consolidated assets 
                        greater than or equal to $50,000,000,000.
    (j) Custodial Deposit Program for Covered Minority Depository 
Institutions and Impact Banks.--
            (1) In general.--Not later than one year after the date of 
        the enactment of this Act, the Secretary of the Treasury shall 
        issue rules establishing a custodial deposit program under 
        which a covered bank may receive deposits from a qualifying 
        account.
            (2) Requirements.--In issuing rules under paragraph (1), 
        the Secretary of the Treasury shall--
                    (A) consult with the Federal banking agencies;
                    (B) ensure each covered bank participating in the 
                program established under this section--
                            (i) has appropriate policies relating to 
                        management of assets, including measures to 
                        ensure the safety and soundness of each such 
                        covered bank; and
                            (ii) is compliant with applicable law; and
                    (C) ensure, to the extent practicable that the 
                rules do not conflict with goals described in section 
                308(a) of the Financial Institutions Reform, Recovery, 
                and Enforcement Act of 1989 (12 U.S.C. 1463 note).
            (3) Report.--Each quarter, the Secretary of the Treasury 
        shall submit to Congress a report on the implementation of the 
        program established under this subsection including information 
        identifying participating covered banks and the total amount of 
        deposits received by covered banks under the program.
            (4) Definitions.--In this subsection:
                    (A) Covered bank.--The term ``covered bank'' 
                means--
                            (i) a minority depository institution that 
                        is well capitalized, as defined by the 
                        appropriate Federal banking agency; or
                            (ii) a depository institution designated 
                        pursuant to subsection (c) that is well 
                        capitalized, as defined by the appropriate 
                        Federal banking agency.
                    (B) Federal banking agencies.--The terms 
                ``appropriate Federal banking agency'' and ``Federal 
                banking agencies'' have the meaning given those terms, 
                respectively, under section 3 of the Federal Deposit 
                Insurance Act.
                    (C) Qualifying account.--The term ``qualifying 
                account'' means any account established in the 
                Department of the Treasury that--
                            (i) is controlled by the Secretary; and
                            (ii) is expected to maintain a balance 
                        greater than $200,000,000 for the following 24-
                        month period.
    (k) Streamlined Community Development Financial Institution 
Applications and Reporting.--
            (1) Application processes.--Not later than 12 months after 
        the date of the enactment of this Act and with respect to any 
        person having assets under $3,000,000,000 that submits an 
        application for deposit insurance with the Federal Deposit 
        Insurance Corporation that could also become a community 
        development financial institution, the Federal Deposit 
        Insurance Corporation, in consultation with the Administrator 
        of the Community Development Financial Institutions Fund, 
        shall--
                    (A) develop systems and procedures to record 
                necessary information to allow the Administrator to 
                conduct preliminary analysis for such person to also 
                become a community development financial institution; 
                and
                    (B) develop procedures to streamline the 
                application and annual certification processes and to 
                reduce costs for such person to become, and maintain 
                certification as, a community development financial 
                institution.
            (2) Implementation report.--Not later than 18 months after 
        the date of the enactment of this Act, the Federal Deposit 
        Insurance Corporation shall submit to Congress a report 
        describing the systems and procedures required under paragraph 
        (1).
            (3) Annual report.--
                    (A) In general.--Section 17(a)(1) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1827(a)(1)) is 
                amended--
                            (i) in subparagraph (E), by striking 
                        ``and'' at the end;
                            (ii) by redesignating subparagraph (F) as 
                        subparagraph (G);
                            (iii) by inserting after subparagraph (E) 
                        the following new subparagraph:
                    ``(F) applicants for deposit insurance that could 
                also become a community development financial 
                institution (as defined in section 103 of the Riegle 
                Community Development and Regulatory Improvement Act of 
                1994), a minority depository institution (as defined in 
                section 308 of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989), or an impact 
                bank (as designated pursuant to section 7(c) of the 
                Promoting and Advancing Communities of Color through 
                Inclusive Lending Act); and''.
                    (B) Application.--The amendment made by this 
                paragraph shall apply with respect to the first report 
                to be submitted after the date that is 2 years after 
                the date of the enactment of this Act.
    (l) Task Force on Lending to Small Business Concerns.--
            (1) In general.--Not later than 6 months after the date of 
        the enactment of this Act, the Administrator of the Small 
        Business Administration shall establish a task force to examine 
        methods for improving relationships between the Small Business 
        Administration and community development financial 
        institutions, minority depository institutions, and Impact 
        Banks to increase the volume of loans provided by such 
        institutions to small business concerns (as defined under 
        section 3 of the Small Business Act (15 U.S.C. 632)).
            (2) Report to congress.--Not later than 18 months after the 
        establishment of the task force described in paragraph (1), the 
        Administrator of the Small Business Administration shall submit 
        to Congress a report on the findings of such task force.

SEC. 8. ESTABLISHMENT OF FINANCIAL AGENT MENTOR-PROTEGE PROGRAM.

    (a) In General.--Section 308 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note), as amended 
by section 6(f), is further amended by adding at the end the following 
new subsection:
    ``(e) Financial Agent Mentor-Protege Program.--
            ``(1) In general.--The Secretary of the Treasury shall 
        establish a program to be known as the `Financial Agent Mentor-
        Protege Program' (in this subsection referred to as the 
        `Program') under which a financial agent designated by the 
        Secretary or a large financial institution may serve as a 
        mentor, under guidance or regulations prescribed by the 
        Secretary, to a small financial institution to allow such small 
        financial institution--
                    ``(A) to be prepared to perform as a financial 
                agent; or
                    ``(B) to improve capacity to provide services to 
                the customers of the small financial institution.
            ``(2) Outreach.--The Secretary shall hold outreach events 
        to promote the participation of financial agents, large 
        financial institutions, and small financial institutions in the 
        Program at least once a year.
            ``(3) Exclusion.--The Secretary shall issue guidance or 
        regulations to establish a process under which a financial 
        agent, large financial institution, or small financial 
        institution may be excluded from participation in the Program.
            ``(4) Report.--The Office of Minority and Women Inclusion 
        of the Department of the Treasury shall include in the report 
        submitted to Congress under section 342(e) of the Dodd-Frank 
        Wall Street Reform and Consumer Protection Act information 
        pertaining to the Program, including--
                    ``(A) the number of financial agents, large 
                financial institutions, and small financial 
                institutions participating in such Program; and
                    ``(B) the number of outreach events described in 
                paragraph (2) held during the year covered by such 
                report.
            ``(5) Definitions.--In this subsection:
                    ``(A) Financial agent.--The term `financial agent' 
                means any national banking association designated by 
                the Secretary of the Treasury to be employed as a 
                financial agent of the Government.
                    ``(B) Large financial institution.--The term `large 
                financial institution' means any entity regulated by 
                the Comptroller of the Currency, the Board of Governors 
                of the Federal Reserve System, the Federal Deposit 
                Insurance Corporation, or the National Credit Union 
                Administration that has total consolidated assets 
                greater than or equal to $50,000,000,000.
                    ``(C) Small financial institution.--The term `small 
                financial institution' means--
                            ``(i) any entity regulated by the 
                        Comptroller of the Currency, the Board of 
                        Governors of the Federal Reserve System, the 
                        Federal Deposit Insurance Corporation, or the 
                        National Credit Union Administration that has 
                        total consolidated assets lesser than or equal 
                        to $2,000,000,000; or
                            ``(ii) a minority depository 
                        institution.''.
    (b) Effective Date.--This section and the amendments made by this 
section shall take effect 90 days after the date of the enactment of 
this Act.

SEC. 9. STUDY AND REPORT WITH RESPECT TO IMPACT OF PROGRAMS ON LOW- AND 
              MODERATE-INCOME AND MINORITY COMMUNITIES.

    (a) Study.--The Secretary of the Treasury shall conduct a study of 
the impact of the programs established under this Act or any amendment 
made by this Act on low- and moderate-income and minority communities.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary shall submit to Congress a report on the 
results of the study conducted pursuant to subsection (a), which shall 
include, to the extent possible, the results of the study disaggregated 
by racial and ethnic group.
    (c) Information Provided to the Secretary.--Eligible institutions 
that participate in any of the programs described in subsection (a) 
shall provide the Secretary of the Treasury with such information as 
the Secretary may require to carry out the study required by this 
section.
                                 <all>