Source: http://www.law.cornell.edu/uscode/text/12/4713a
Timestamp: 2013-05-23 18:38:08
Document Index: 349706867

Matched Legal Cases: ['§ 4713', '§ 4713', '§ 4713', '§ 114', '§ 1134', '§ 2901']

12 USC § 4713a - Guarantees for bonds and notes issued for community or economic development purposes | Title 12 - Banks and Banking | U.S. Code | LII / Legal Information Institute
USC › Title 12 › Chapter 47 › Subchapter I › § 4713a	prevnext
12 USC § 4713a - Guarantees for bonds and notes issued for community or economic development purposes
Eligible community development financial institution The term “eligible community development financial institution” means a community development financial institution (as described in section 1805.201 of title 12, Code of Federal Regulations, or any successor thereto) certified by the Secretary that has applied to a qualified issuer for, or been granted by a qualified issuer, a loan under the Program.
Eligible community or economic development purpose The term “eligible community or economic development purpose”—
means any purpose described in section 4707
includes the provision of community or economic development in low-income or underserved rural areas.
Guarantee The term “guarantee” means a written agreement between the Secretary and a qualified issuer (or trustee), pursuant to which the Secretary ensures repayment of the verifiable losses of principal, interest, and call premium, if any, on notes or bonds issued by a qualified issuer to finance or refinance loans to eligible community development financial institutions.
Loan The term “loan” means any credit instrument that is extended under the Program for any eligible community or economic development purpose.
Master servicer (A)
In general The term “master servicer” means any entity approved by the Secretary in accordance with subparagraph (B) to oversee the activities of servicers, as provided in subsection (f)(4).
Approval criteria for master servicers The Secretary shall approve or deny any application to become a master servicer under the Program not later than 90 days after the date on which all required information is submitted to the Secretary, based on the capacity and experience of the applicant in—
loan administration, servicing, and loan monitoring;
managing regional or national loan intake, processing, or servicing operational systems and infrastructure;
managing regional or national originator communication systems and infrastructure;
developing and implementing training and other risk management strategies on a regional or national basis; and
compliance monitoring, investor relations, and reporting.
Program The term “Program” means the guarantee Program for bonds and notes issued for eligible community or economic development purposes established under this section.
Program administrator The term “Program administrator” means an entity designated by the issuer to perform administrative duties, as provided in subsection (f)(2).
Qualified issuer (A)
In general The term “qualified issuer” means a community development financial institution (or any entity designated to issue notes or bonds on behalf of such community development financial institution) that meets the qualification requirements of this paragraph.
Approval criteria for qualified issuers (i)
The Secretary shall approve a qualified issuer for a guarantee under the Program in accordance with the requirements of this paragraph, and such additional requirements as the Secretary may establish, by regulation.
A qualified issuer shall—
have appropriate expertise, capacity, and experience, or otherwise be qualified to make loans for eligible community or economic development purposes;
an acceptable statement of the proposed sources and uses of the funds; and
a capital distribution plan that meets the requirements of subsection (c)(1); and
certify to the Secretary that the bonds or notes to be guaranteed are to be used for eligible community or economic development purposes.
Department opinion; timing (i)
Not later than 30 days after the date of a request by a qualified issuer for approval of a guarantee under the Program, the Secretary shall provide an opinion regarding compliance by the issuer with the requirements of the Program under this section.
The Secretary shall approve or deny a guarantee under this section after consideration of the opinion provided to the Secretary under clause (i), and in no case later than 90 days after receipt of all required information by the Secretary with respect to a request for such guarantee.
Servicer The term “servicer” means an entity designated by the issuer to perform various servicing duties, as provided in subsection (f)(3).
Guarantees authorized The Secretary shall guarantee payments on bonds or notes issued by any qualified issuer, if the proceeds of the bonds or notes are used in accordance with this section to make loans to eligible community development financial institutions—
for eligible community or economic development purposes; or
to refinance loans or notes issued for such purposes.
General program requirements (1)
In general A capital distribution plan meets the requirements of this subsection, if not less than 90 percent of the principal amount of guaranteed bonds or notes (other than costs of issuance fees) are used to make loans for any eligible community or economic development purpose, measured annually, beginning at the end of the 1-year period beginning on the issuance date of such guaranteed bonds or notes.
Relending account Not more than 10 percent of the principal amount of guaranteed bonds or notes, multiplied by an amount equal to the outstanding principal balance of issued notes or bonds, minus the risk-share pool amount under subsection (d), may be held in a relending account and may be made available for new eligible community or economic development purposes.
Limitations on unpaid principal balances The proceeds of guaranteed bonds or notes under the Program may not be used to pay fees (other than costs of issuance fees), and shall be held in—
community or economic development loans;
a relending account, to the extent authorized under paragraph (2); or
a risk-share pool established under subsection (d).
Repayment If a qualified issuer fails to meet the requirements of paragraph (1) by the end of the 90-day period beginning at the end of the annual measurement period, repayment shall be made on that portion of bonds or notes necessary to bring the bonds or notes that remain outstanding after such repayment into compliance with the 90 percent requirement of paragraph (1).
Prohibited uses The Secretary shall, by regulation—
prohibit, as appropriate, certain uses of amounts from the guarantee of a bond or note under the Program, including the use of such funds for political activities, lobbying, outreach, counseling services, or travel expenses; and
provide that the guarantee of a bond or note under the Program may not be used for salaries or other administrative costs of—
the qualified issuer; or
any recipient of amounts from the guarantee of a bond or note.
Risk-share pool Each qualified issuer shall, during the term of a guarantee provided under the Program, establish a risk-share pool, capitalized by contributions from eligible community development financial institution participants an amount equal to 3 percent of the guaranteed amount outstanding on the subject notes and bonds.
In general A guarantee issued under the Program shall—
be fully assignable and transferable to the capital market, on terms and conditions that are consistent with comparable Government-guaranteed bonds, and satisfactory to the Secretary;
represent the full faith and credit of the United States; and
not exceed 30 years.
Annual number of guarantees The Secretary shall issue not more than 10 guarantees in any calendar year under the Program.
Guarantee amount The Secretary may not guarantee any amount under the Program equal to less than $100,000,000, but the total of all such guarantees in any fiscal year may not exceed $1,000,000,000.
Servicing of transactions (1)
In general To maximize efficiencies and minimize cost and interest rates, loans made under this section may be serviced by qualified Program administrators, bond servicers, and a master servicer.
Duties of Program administrator The duties of a Program administrator shall include—
approving and qualifying eligible community development financial institution applications for participation in the Program;
bond packaging in connection with the Program; and
all other duties and related services that are customarily expected of a Program administrator.
Duties of servicer The duties of a servicer shall include—
billing and collecting loan payments;
initiating collection activities on past-due loans;
transferring loan payments to the master servicing accounts;
loan administration and servicing;
systematic and timely reporting of loan performance through remittance and servicing reports;
proper measurement of annual outstanding loan requirements; and
all other duties and related services that are customarily expected of servicers.
Duties of master servicer The duties of a master servicer shall include—
tracking the movement of funds between the accounts of the master servicer and any other servicer;
ensuring orderly receipt of the monthly remittance and servicing reports of the servicer;
monitoring the collection comments and foreclosure actions;
aggregating the reporting and distribution of funds to trustees and investors;
removing and replacing a servicer, as necessary;
systematic and timely reporting of loan performance compiled from all bond servicers’ reports;
proper distribution of funds to investors; and
all other duties and related services that are customarily expected of a master servicer.
In general A qualified issuer that receives a guarantee issued under this section on a bond or note shall pay a fee to the Secretary, in an amount equal to 10 basis points of the amount of the unpaid principal of the bond or note guaranteed.
Payment A qualified issuer shall pay the fee required under this subsection on an annual basis.
Use of fees Fees collected by the Secretary under this subsection shall be used to reimburse the Department of the Treasury for any administrative costs incurred by the Department in implementing the Program established under this section.
In general There are authorized to be appropriated to the Secretary, such sums as are necessary to carry out this section.
Use of fees To the extent that the amount of funds appropriated for a fiscal year under paragraph (1) are not sufficient to carry out this section, the Secretary may use the fees collected under subsection (g) for the cost of providing guarantees of bonds and notes under this section.
Investment in guaranteed bonds ineligible for Community Reinvestment Act purposes Notwithstanding any other provision of law, any investment by a financial institution in bonds or notes guaranteed under the Program shall not be taken into account in assessing the record of such institution for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 [et seq.]).
Regulations Not later than 1 year after September 27, 2010, the Secretary shall promulgate regulations to carry out this section.
Implementation Not later than 2 years after September 27, 2010, the Secretary shall implement this section.
Termination This section is repealed, and the authority provided under this section shall terminate, on September 30, 2014.
(Pub. L. 103–325, title I, § 114A, as added Pub. L. 111–240, title I, § 1134,Sept. 27, 2010, 124 Stat. 2515.)
The Community Reinvestment Act of 1977, referred to in subsec. (i), is title VIII of Pub. L. 95–128, Oct. 12, 1977, 91 Stat. 1147, which is classified generally to chapter 30 (§ 2901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2901 of this title and Tables.