Collapse to view only § 4716. Studies and reports; examination and audit
- § 4701. Findings and purposes
- § 4702. Definitions
- § 4703. Establishment of national Fund for community development banking
- § 4703a. Capital investments for neighborhoods disproportionately impacted by the COVID–19 pandemic
- § 4704. Applications for assistance
- § 4705. Community partnerships
- § 4706. Selection of institutions
- § 4707. Assistance provided by Fund
- § 4708. Training
- § 4709. Encouragement of private entities
- § 4710. Collection and compilation of information
- § 4711. Investment of receipts and proceeds
- § 4712. Capitalization assistance to enhance liquidity
- § 4713. Incentives for depository institution participation
- § 4713a. Guarantees for bonds and notes issued for community or economic development purposes
- § 4714. Recordkeeping
- § 4715. Special provisions with respect to institutions that are supervised by Federal banking agencies
- § 4716. Studies and reports; examination and audit
- § 4717. Enforcement
- § 4718. Authorization of appropriations
- § 4719. Grants to establish loan-loss reserve funds
§ 4701. Findings and purposes
(a) Findings
The Congress finds that—
(1) many of the Nation’s urban, rural, and Native American communities face critical social and economic problems arising in part from the lack of economic growth, people living in poverty, and the lack of employment and other opportunities;
(2) the restoration and maintenance of the economies of these communities will require coordinated development strategies, intensive supportive services, and increased access to equity investments and loans for development activities, including investment in businesses, housing, commercial real estate, human development, and other activities that promote the long-term economic and social viability of the community; and
(3) community development financial institutions have proven their ability to identify and respond to community needs for equity investments, loans, and development services.
(b) Purpose
(Pub. L. 103–325, title I, § 102, Sept. 23, 1994, 108 Stat. 2163.)
§ 4702. DefinitionsFor purposes of this subchapter, the following definitions shall apply:
(1) Administrator
(2) Appropriate Federal banking agency
(3) Affiliate
(4) Board
(5) Community development financial institution
(A) In generalThe term “community development financial institution” means a person (other than an individual) that—
(i) has a primary mission of promoting community development;
(ii) serves an investment area or targeted population;
(iii) provides development services in conjunction with equity investments or loans, directly or through a subsidiary or affiliate;
(iv) maintains, through representation on its governing board or otherwise, accountability to residents of its investment area or targeted population; and
(v) is not an agency or instrumentality of the United States, or of any State or political subdivision of a State.
(B) Conditions for qualification of holding companies
(i) Consolidated treatment
(ii) Exclusion of subsidiary or affiliate for failure to meet consolidated treatment rule
(C) Conditions for subsidiaries
(6) Community partner
(7) Community partnership
(8) Depository institution holding company
(9) Development servicesThe term “development services” means activities that promote community development and are integral to lending or investment activities, including—
(A) business planning;
(B) financial and credit counseling; and
(C) marketing and management assistance.
(10) Fund
(11) Indian reservation
(12) Indian tribe
(13) Insured community development financial institution
(14) Insured credit union
(15) Insured depository institution
(16) Investment areaThe term “investment area” means a geographic area (or areas) including an Indian reservation that—
(A)
(i) meets objective criteria of economic distress developed by the Fund, which may include the percentage of low-income families or the extent of poverty, the rate of unemployment or underemployment, rural population outmigration, lag in population growth, and extent of blight and disinvestment; and
(ii) has significant unmet needs for loans or equity investments; or
(B) encompasses or is located in an empowerment zone or enterprise community designated under section 1391 of title 26.
(17) Low-incomeThe term “low-income” means having an income, adjusted for family size, of not more than—
(A) for metropolitan areas, 80 percent of the area median income; and
(B) for nonmetropolitan areas, the greater of—
(i) 80 percent of the area median income; or
(ii) 80 percent of the statewide nonmetropolitan area median income.
(18) State
(19) Subsidiary
(20) Targeted populationThe term “targeted population” means individuals, or an identifiable group of individuals, including an Indian tribe, who—
(A) are low-income persons; or
(B) otherwise lack adequate access to loans or equity investments.
(21) Training program
(Pub. L. 103–325, title I, § 103, Sept. 23, 1994, 108 Stat. 2163.)
§ 4703. Establishment of national Fund for community development banking
(a) Establishment
(1) In general
(2) Wholly owned Government corporation
(b) Management of Fund
(1) Appointment of Administrator
(2) Chief financial officer
(3) Other officers and employees
(4) Expedited hiringDuring the 2-year period beginning on September 23, 1994, the Administrator may—
(A) appoint and terminate the individuals referred to in paragraphs (2) and (3) without regard to the civil service laws and regulations; and
(B) fix the compensation of the individuals referred to in paragraph (3) without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification of positions and General Schedule pay rates, except that the rate of pay for such individuals may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(c) General powersIn carrying out the functions of the Fund, the Administrator—
(1) shall have all necessary and proper authority to carry out this subchapter and subchapter II of this chapter;
(2) shall have the power to adopt, alter, and use a corporate seal for the Fund, which shall be judicially noticed;
(3) may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which business of the Fund may be conducted and such rules and regulations as may be necessary or appropriate to implement this subchapter and subchapter II of this chapter;
(4) may enter into, perform, and enforce such agreements, contracts, and transactions as may be deemed necessary or appropriate to the conduct of activities authorized under this subchapter and subchapter II of this chapter;
(5) may determine the character of and necessity for expenditures of the Fund and the manner in which they shall be incurred, allowed, and paid;
(6) may utilize or employ the services of personnel of any agency or instrumentality of the United States with the consent of the agency or instrumentality concerned on a reimbursable or nonreimbursable basis; and
(7) may execute all instruments necessary or appropriate in the exercise of any of the functions of the Fund under this subchapter and subchapter II of this chapter and may delegate to the officers of the Fund such of the powers and responsibilities of the Administrator as the Administrator deems necessary or appropriate for the administration of the Fund.
(d) Advisory Board
(1) Establishment
(2) MembershipThe Board shall consist of 15 members, including—
(A) the Secretary of Agriculture or his or her designee;
(B) the Secretary of Commerce or his or her designee;
(C) the Secretary of Housing and Urban Development or his or her designee;
(D) the Secretary of the Interior or his or her designee;
(E) the Secretary of the Treasury or his or her designee;
(F) the Administrator of the Small Business Administration or his or her designee; and
(G) 9 private citizens, appointed by the President, who shall be selected, to the maximum extent practicable, to provide for national geographic representation and racial, ethnic, and gender diversity, including—
(i) 2 individuals who are officers of existing community development financial institutions;
(ii) 2 individuals who are officers of insured depository institutions;
(iii) 2 individuals who are officers of national consumer or public interest organizations;
(iv) 2 individuals who have expertise in community development; and
(v) 1 individual who has personal experience and specialized expertise in the unique lending and community development issues confronted by Indian tribes on Indian reservations.
(3) Chairperson
(4) Board function
(5) Terms of private members
(A) In general
(B) Vacancies
(6) Meetings
(7) Reimbursement for expenses
(8) Costs and expenses
(e) Omitted
(f) Government Corporation Control Act exemption
(g) Limitation of Fund and Federal liability
(h) Prohibition on issuance of securities
(i) Omitted
(j) Assisted institutions not United States instrumentalities
(k) Transition period
(1) In generalDuring the transition period, the Secretary of the Treasury may—
(A) assist in the establishment of the administrative functions of the Fund listed in paragraph (2); and
(B) hire not more than 6 individuals to serve as employees of the Fund during the transition period.
(2) Continued service
(3) Administrative functionsThe administrative functions referred to in paragraph (1)(A) shall be limited to—
(A) establishing accounting, information, and recordkeeping systems for the Fund; and
(B) procuring office space, equipment, and supplies.
(4) Expedited hiringDuring the transition period, the Secretary of the Treasury may—
(A) appoint and terminate the individuals referred to in paragraph (1)(B) without regard to the civil service laws and regulations; and
(B) fix the compensation of the individuals referred to in paragraph (1)(B) without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification of positions and General Schedule pay rates, except that the rate of pay for such individuals may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(5) Certain employees
(6) Transition expenses
(7) “Transition period” defined
(Pub. L. 103–325, title I, § 104, Sept. 23, 1994, 108 Stat. 2166; Pub. L. 112–166, § 2(w), Aug. 10, 2012, 126 Stat. 1289; Pub. L. 117–286, § 4(a)(57), Dec. 27, 2022, 136 Stat. 4311.)
§ 4703a. Capital investments for neighborhoods disproportionately impacted by the COVID–19 pandemic
(a) DefinitionsIn this section—
(1) the term “bank holding company” has the meaning given the term in section 1841 of this title;
(2) the term “eligible institution” means any low- and moderate-income community financial institution that is eligible to participate in the Program;
(3) the term “Emergency Capital Investment Fund” means the Emergency Capital Investment Fund established under subsection (b);
(4) the term “low- and moderate-income community financial institution” means any financial institution that is—
(A)
(i) a community development financial institution; or
(ii) a minority depository institution; and
(B)
(i) an insured depository institution that is not controlled by a bank holding company or savings and loan holding company that is also an eligible institution;
(ii) a bank holding company;
(iii) a savings and loan holding company; or
(iv) a federally insured credit union;
(5) the term “minority” means any Black American, Native American, Hispanic American, Asian American, Native Alaskan, Native Hawaiian, or Pacific Islander;
(6) the term “minority depository institution” means an entity that is—
(A) a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note); or
(B) considered to be a minority depository institution by—
(i) the appropriate Federal banking agency; or
(ii) the National Credit Union Administration, in the case of an insured credit union; or
(C) listed in the Federal Deposit Insurance Corporation’s Minority Depository Institutions List published for the Third Quarter 2020.1
1 So in original. The period probably should be a semicolon.
(7) the term “Program” means the Emergency Capital Investment Program established under subsection (b);
(8) the term “savings and loan holding company” has the meaning given the term under section 1467a(a) of this title; and
(9) the “Secretary” means the Secretary of the Treasury.
(b) Establishment
(1) Fund established
(2) Program authorized
(c) Purchases
(1) In general
(2) Purchase limit
(d) Application
(1) Acceptance
(2) Consultation with regulators
(3) Eligibility
(A) In general
(B) Additional criteria
(4) Requirement to provide an emergency investment lending plan for communities that may be disproportionately impacted by the economic effects of the COVID–19 pandemic
(A) In generalAt the time that an applicant submits an application to the Secretary for a capital investment under the Program, the applicant shall provide the Secretary, along with the appropriate Federal banking agency or the National Credit Union Administration, as applicable, an investment and lending plan that—
(i) demonstrates that not less than 30 percent of the lending of the applicant over the past 2 fiscal years was made directly to low- and moderate income borrowers, to borrowers that create direct benefits for low- and moderate-income populations, to other targeted populations as defined by the Fund, or any combination thereof, as measured by the total number and dollar amount of loans;
(ii) describes how the business strategy and operating goals of the applicant will address community development needs in communities that may be disproportionately impacted by the economic effects of COVID–19, which includes the needs of small businesses, consumers, nonprofit organizations, community development, and other projects providing direct benefits to low- and moderate-income communities, low-income individuals, and minorities within the minority, rural, and urban low-income and underserved areas served by the applicant;
(iii) includes a plan to provide community outreach and communication, where appropriate; 2
2 So in original. Probably should be followed by “and”.
(iv) includes details on how the applicant plans to expand or maintain significant lending or investment activity in low- or moderate-income minority communities, especially those that may be disproportionately impacted by COVID–19 to historically disadvantaged borrowers, and to minorities that have significant unmet capital or financial services needs.
(B) Documentation
(5) Incentives to increase lending and provide affordable credit
(A) Issuance and purchase of preferred stockAn eligible institution that the Secretary approves for participation in the Program may issue to the Secretary, and the Secretary may purchase from such institution, preferred stock that—
(i) provides that the preferred stock will—(I) be repaid not later than the end of the 10-year period beginning on the date of the capital investment under the Program; or(II) at the end of such 10-year period, be subject to such additional terms as the Secretary shall prescribe, which shall include a requirement that the stock shall carry the highest dividend or interest rate payable; and
(ii) provides that the term and condition described under clause (i) shall not apply if the application of that term and condition would adversely affect the capital treatment of the stock under current or successor applicable capital provisions compared to a capital instrument with identical terms other than the term and condition described under clause (i).
(B) Alternative financial instruments
(6) Requirements on preferred stock and other financial instrumentAny financial instrument issued to the Secretary by a low- and moderate-income community financial institution under the Program shall provide the following:
(A) No dividends, interest or other similar required payments shall have a rate exceeding 2 percent per anspan for the first 10 years.
(B) The annual required payment rate of dividends, interest, or other similar payments of a low- and moderate-income community financial institution shall be adjusted downward as follows, based on lending by the institution during the most recent annual period compared to lending by the institution during the annual period ending on September 30, 2020:
(i) No dividends, interest, or other similar payments shall be due within the first 24-month period after the capital investment by the Secretary.
(ii) If the amount of lending by the institution within minority, rural, and urban low-income and underserved communities and to low- and moderate-income borrowers has increased in amount between 200 percent and 400 percent of the amount of the capital investment, the annual payment rate shall not exceed 1.25 percent per anspan.
(iii) If the amount of lending by the institution within minority, rural, and urban low-income and underserved communities and to low- and moderate-income borrowers has increased by more than 400 percent of the capital investment, the annual payment rate shall not exceed 0.5 percent per anspan.
(7) Contingency of payments based on certain financial criteria
(A) DeferralAny annual payments under this section shall be deferred in any quarter or payment period if any of the following is true:
(i) The low- and moderate-income community institution fails to meet the Tier 1 capital ratio or similar ratio as determined by the Secretary.
(ii) The low- and moderate-income community financial institution fails to achieve positive net income for the quarter or payment period.
(iii) The low- and moderate-income community financial institution determines that the payment would be detrimental to the financial health of the institution and the Chief Executive Officer and Chief Financial Officer of the institution provide written notice, in a form reasonably satisfactory to the Secretary, of such determination and the basis thereof.
(B) Testing during next payment periodAny annual payment that is deferred under this section shall—
(i) be tested against the metrics described in subparagraph (A) at the beginning of the next payment period; and
(ii) continue to be deferred until the metrics described in that subparagraph are no longer applicable.
(8) Requirements in connection with failure to satisfy program goals
(e) Restrictions
(1) In generalEach low- and moderate-income community financial institution may only issue financial instruments or senior preferred stock under this subsection with an aggregate principal amount (or comparable amount) that is—
(A) not more than $250,000,000; and
(B)
(i) not more than 7.5 percent of total assets for an institution with assets of more than $2,000,000,000;
(ii) not more than 15 percent of total assets for an institution with assets of not less than $500,000,000 and not more than $2,000,000,000; and
(iii) not more than 22.5 percent of total assets for an institution with assets of less than $500,000,000.
(2) Set-asides
(3) Holding of instruments
(4) Sale of interest
(A) In generalWith respect to a capital investment made into a low- and moderate-income community financial institution under this section, the Secretary—
(i) prior to any sale of such capital investment to a third party, shall provide the low- and moderate-income community financial institution a right of first refusal to buy back the investment under terms that do not exceed a value as determined by an independent third party;
(ii) shall not sell more than 25 percent of the outstanding equity interests of any institution to a single third party without the consent of such institution, which may not be unreasonably withheld; and
(iii) with the permission of the institution, may transfer or sell the interest of the Secretary in the capital investment for no consideration or for a de minimis amount to a mission aligned nonprofit affiliate of an applicant that is an insured community development financial institution.
(B) Calculation of ownership for minority depository institutions
(5) Repayment incentives
(f) Treatment of capital investments
(g) Outreach to minority communities
(h) Restrictions
(1) In general
(2) Conflicts of interest
(A) DefinitionsIn this paragraph:
(i) Controlling interest
(ii) Covered entity
(iii) Covered individualThe term “covered individual” means—(I) the President, the Vice President, the head of an Executive department, or a Member of Congress; and(II) the spouse, child, son-in-law, or daughter-in-law, as determined under applicable common law, of an individual described in subclause (i).
(iv) Executive department
(v) Member of Congress
(vi) Equity interestThe term “equity interest” means—(I) a share in an entity, without regard to whether the share is—(aa) transferable; or(bb) classified as stock or anything similar;(II) a capital or profit interest in a limited liability company or partnership; or(III) a warrant or right, other than a right to convert, to purchase, sell, or subscribe to a share or interest described in subclause (I) or (II), respectively.
(B) Prohibition
(C) Requirement
(i) Ineligibility of certain institutions
(j) Termination of investment authority
(1) In general
(2) Rule of construction
(k) Collection of dataNotwithstanding the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.)—
(1) any low- and moderate-income community financial 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 sole purpose and exclusive use of monitoring compliance under the plan required under subsection (d)(4); and
(2) a low- and moderate-income community financial institution that collects the data described in paragraph (1) shall not be subject to adverse action related to that collection by the Bureau of Consumer Financial Protection or any other Federal agency.
(l) Deposit of funds
(m) Direct appropriation
(n) Administrative expenses
(o) Administrative provisionsThe Secretary may take such actions as the Secretary determines necessary to carry out the authorities in this section, including the following:
(1) The Secretary may use the services of any agency or instrumentality of the United States or component thereof on a reimbursable basis, and any such agency or instrumentality or component thereof is authorized to provide services as requested by the Secretary using all authorities vested in or delegated to that agency, instrumentality, or component.
(2) The Secretary may enter into contracts, including contracts for services authorized by section 3109 of title 5.
(3) The Secretary may designate any bank, savings association, trust company, security broker or dealer, asset manager, or investment adviser as a financial agent of the Federal Government and such institution shall perform all such reasonable duties related to this section as financial agent of the Federal Government as may be required. The Secretary shall have authority to amend existing agreements with financial agents to perform reasonable duties related to this section.
(4) The Secretary may exercise any rights received in connection with any preferred stock or other financial instruments or assets purchased or acquired pursuant to the authorities granted under this section.
(5) The Secretary may manage any assets purchased under this section, including revenues and portfolio risks therefrom.
(6) The Secretary may sell, dispose of, transfer, exchange or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any preferred stock or other financial instrument or asset purchased or acquired under this section, upon terms and conditions and at a price determined by the Secretary.
(7) The Secretary may manage or prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this section.
(8) The Secretary may establish and use vehicles to purchase, hold, and sell preferred stock or other financial instruments and issue obligations.
(9) The Secretary may issue such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this section.
(10) The Secretary is authorized to use direct hiring authority to hire employees to administer this section.
(Pub. L. 103–325, title I, § 104A, as added Pub. L. 116–260, div. N, title V, § 522(a), Dec. 27, 2020, 134 Stat. 2079.)
§ 4704. Applications for assistance
(a) Form and procedures
(b) Minimum requirementsExcept as provided in sections 4705 and 4712 of this title, the Fund shall require an application—
(1) to establish that the applicant is, or will be, a community development financial institution;
(2) to include a comprehensive strategic plan for the organization that contains—
(A) a business plan of not less than 5 years in duration that demonstrates that the applicant will be properly managed and will have the capacity to operate as a community development financial institution that will not be dependent upon assistance from the Fund for continued viability;
(B) an analysis of the needs of the investment area or targeted population and a strategy for how the applicant will attempt to meet those needs;
(C) a plan to coordinate use of assistance from the Fund with existing Federal, State, local, and tribal government assistance programs, and private sector financial services;
(D) an explanation of how the proposed activities of the applicant are consistent with existing economic, community, and housing development plans adopted by or applicable to an investment area or targeted population; and
(E) a description of how the applicant will coordinate with community organizations and financial institutions which will provide equity investments, loans, secondary markets, or other services to investment areas or targeted populations;
(3) to include a detailed description of the applicant’s plans and likely sources of funds to match the amount of assistance requested from the Fund;
(4) in the case of an applicant that has previously received assistance under this subchapter, to demonstrate that the applicant—
(A) has substantially met its performance goals and otherwise carried out its responsibilities under this subchapter and the assistance agreement; and
(B) will expand its operations into a new investment area or serve a new targeted population, offer more products or services, or increase the volume of its business;
(5) in the case of an applicant with a prior history of serving investment areas or targeted populations, to demonstrate that the applicant—
(A) has a record of success in serving investment areas or targeted populations; and
(B) will expand its operations into a new investment area or to serve a new targeted population, offer more products or services, or increase the volume of its current business; and
(6) to include such other information as the Fund deems appropriate.
(c) Preapplication outreach program
(Pub. L. 103–325, title I, § 105, Sept. 23, 1994, 108 Stat. 2170.)
§ 4705. Community partnerships
(a) Application
(b) Application requirementsThe Fund shall require a community partnership application—
(1) to meet the minimum requirements established for community development financial institutions under section 4704(b) of this title, except that the criteria specified in paragraphs (1) and (2)(A) of section 4704(b) of this title shall not apply to the community partner;
(2) to describe how each coapplicant will participate in carrying out the community partnership and how the partnership will enhance activities serving the investment area or targeted population; and
(3) to demonstrate that the community partnership activities are consistent with the strategic plan submitted by the community development financial institution coapplicant.
(c) Selection criteriaThe Fund shall consider a community partnership application based on—
(1) the community development financial institution coapplicant—
(A) meeting the minimum selection criteria described in section 4704 of this title; and
(B) satisfying the selection criteria of section 4706 of this title;
(2) the extent to which the community partner coapplicant will participate in carrying out the partnership;
(3) the extent to which the community partnership will enhance the likelihood of success of the community development financial institution coapplicant’s strategic plan; and
(4) the extent to which service to the investment area or targeted population will be better performed by a partnership as opposed to the individual community development financial institution coapplicant.
(d) Limitation on distribution of assistance
(e) Other requirements and limitations
(Pub. L. 103–325, title I, § 106, Sept. 23, 1994, 108 Stat. 2171.)
§ 4706. Selection of institutions
(a) Selection criteria
Except as provided in section 4712 of this title, the Fund shall, in its sole discretion, select community development financial institution applicants meeting the requirements of section 4704 of this title for assistance based on—
(1) the likelihood of success of the applicant in meeting the goals of its comprehensive strategic plan;
(2) the experience and background of the management team;
(3) the extent of need for equity investments, loans, and development services within the investment areas or targeted populations;
(4) the extent of economic distress within the investment areas or the extent of need within the targeted populations, as those factors are measured by objective criteria;
(5) the extent to which the applicant will concentrate its activities on serving its investment areas or targeted populations;
(6) the amount of firm commitments to meet or exceed the matching requirements and the likely success of the plan for raising the balance of the match;
(7) the extent to which the matching funds are derived from private sources;
(8) the extent to which the proposed activities will expand economic opportunities within the investment areas or the targeted populations;
(9) whether the applicant is, or will become, an insured community development financial institution;
(10) the extent of support from the investment areas or targeted populations;
(11) the extent to which the applicant is, or will be, community-owned or community-governed;
(12) the extent to which the applicant will increase its resources through coordination with other institutions or participation in a secondary market;
(13) in the case of an applicant with a prior history of serving investment areas or targeted populations, the extent of success in serving them; and
(14) other factors deemed to be appropriate by the Fund.
(b) Geographic diversity
(Pub. L. 103–325, title I, § 107, Sept. 23, 1994, 108 Stat. 2172.)
§ 4707. Assistance provided by Fund
(a) Forms of assistance
(1) In generalThe Fund may provide—
(A) financial assistance through equity investments, deposits, credit union shares, loans, and grants; and
(B) technical assistance—
(i) directly;
(ii) through grants; or
(iii) by contracting with organizations that possess expertise in community development finance, without regard to whether the organizations receive or are eligible to receive assistance under this subchapter.
(2) Equity investments
(A) Limitation on equity investments
(B) Fund deemed not to control
(3) Deposits
(4) Limitations on obligations
(b) Uses of financial assistance
(1) In generalFinancial assistance made available under this subchapter may be used by assisted community development financial institutions to serve investment areas or targeted populations by developing or supporting—
(A) commercial facilities that promote revitalization, community stability, or job creation or retention;
(B) businesses that—
(i) provide jobs for low-income people or are owned by low-income people; or
(ii) enhance the availability of products and services to low-income people;
(C) community facilities;
(D) the provision of basic financial services;
(E) housing that is principally affordable to low-income people, except that assistance used to facilitate homeownership shall only be used for services and lending products—
(i) that serve low-income people; and
(ii) that—(I) are not provided by other lenders in the area; or(II) complement the services and lending products provided by other lenders that serve the investment area or targeted population; and
(F) other businesses and activities deemed appropriate by the Fund.
(2) Limitations
(c) Uses of technical assistance
(1) Types of activities
(2) Availability of technical assistance
(d) Amount of assistance
(1) In general
(2) ExceptionThe Fund may provide not more than $3,750,000 of assistance in addition to the amount specified in paragraph (1) during the same 3-year period to an existing community development financial institution that proposes to establish a subsidiary or affiliate for the purpose of serving an investment area or targeted population outside of any State and outside of any metropolitan area presently served by the institution, if—
(A) the subsidiary or affiliate—
(i) would be a community development financial institution; and
(ii) independently—(I) meets the selection criteria described in section 4704 of this title; and(II) satisfies the selection criteria of section 4706 of this title; and
(B) no other application for assistance to serve the investment area or targeted population has been submitted to the Administrator within a reasonable period of time preceding the date of receipt of the application at issue.
(3) Timing of assistance
(e) Matching requirements
(1) In general
(2) ExceptionIn the case of an applicant with severe constraints on available sources of matching funds, the Fund may permit an applicant to comply with the matching requirements of paragraph (1) by—
(A) reducing such matching requirement by 50 percent; or
(B) permitting an applicant to provide matching funds in a form to be determined at the discretion of the Fund, if such applicant—
(i) has total assets of less than $100,000;
(ii) serves nonmetropolitan or rural areas; and
(iii) is not requesting more than $25,000 in assistance.
(3) Limitation
(4) Construction of “Federal Government funds”
(f) Terms and conditions
(1) Soundness of unregulated institutionsThe Fund shall—
(A) ensure, to the maximum extent practicable, that each community development financial institution (other than an insured community development financial institution or depository institution holding company) assisted under this subchapter is financially and managerially sound and maintains appropriate internal controls;
(B) require such institution to submit, not less than once during each 18-month period, a statement of financial condition audited by an independent certified public accountant as part of the report required by section 4714(e)(1) of this title; and
(C) require that all assistance granted under this section is used by the community development financial institution or community development partnership in a manner consistent with the purposes of this subchapter.
(2) Assistance agreement
(A) In general
(B) Performance goals
(C) SanctionsThe agreement shall provide that, in the event of fraud, mismanagement, noncompliance with this subchapter, or noncompliance with the terms of the agreement, the Fund, in its discretion, may—
(i) require changes to the performance goals imposed pursuant to subparagraph (B);
(ii) require changes to the strategic plan submitted pursuant to section 4704(b)(2) of this title;
(iii) revoke approval of the application;
(iv) reduce or terminate assistance;
(v) require repayment of assistance;
(vi) bar an applicant from reapplying for assistance from the Fund; and
(vii) take such other actions as the Fund deems appropriate.
(D) Consultation with tribal governments
(g) Authority to sell equity investments and loans
(h) No authority to limit supervision and regulation
(Pub. L. 103–325, title I, § 108, Sept. 23, 1994, 108 Stat. 2172.)
§ 4708. Training
(a) In general
(b) Program activities
(c) Participation
(d) Contracting
(e) Coordination
(f) Regulatory fee for providing training services
(1) General rule
(2) Persons subject to fee
(3) Limitation on manner of collection
(4) Limitation on amount of fee
(Pub. L. 103–325, title I, § 109, Sept. 23, 1994, 108 Stat. 2176.)
§ 4709. Encouragement of private entities
The Fund may facilitate the organization of corporations in which the Federal Government has no ownership interest. The purpose of any such entity shall be to assist community development financial institutions in a manner that is complementary to the activities of the Fund under this subchapter. Any such entity shall be managed exclusively by persons not employed by the Federal Government or any agency or instrumentality thereof, or by any State or local government or any agency or instrumentality thereof.
(Pub. L. 103–325, title I, § 110, Sept. 23, 1994, 108 Stat. 2177.)
§ 4710. Collection and compilation of information
The Fund shall—
(1) collect and compile information pertinent to community development financial institutions that will assist in creating, developing, expanding, and preserving such institutions; and
(2) make such information available to promote the purposes of this subchapter.
(Pub. L. 103–325, title I, § 111, Sept. 23, 1994, 108 Stat. 2177.)
§ 4711. Investment of receipts and proceeds
(a) Establishment of account
(b) Investments
(c) Availability
(Pub. L. 103–325, title I, § 112, Sept. 23, 1994, 108 Stat. 2177.)
§ 4712. Capitalization assistance to enhance liquidity
(a) Assistance
(1) In generalThe Fund may provide assistance for the purpose of providing capital to organizations to purchase loans or otherwise enhance the liquidity of community development financial institutions, if—
(A) the primary purpose of such organizations is to promote community development; and
(B) any assistance received is matched with funds—
(i) from sources other than the Federal Government;
(ii) on the basis of not less than one dollar for each dollar provided by the Fund; and
(iii) that are comparable in form and value to the assistance provided by the Fund.
(2) Limitation on other assistance
(3) Construction of Federal Government funds
(b) Selection
(c) Amount of assistance
(d) Audit and report requirementsOrganizations that receive assistance from the Fund in accordance with this section shall—
(1) submit to the Fund, not less than once in every 18-month period, financial statements audited by an independent certified public accountant, as part of the report required by paragraph (2);
(2) submit an annual report on its activities; and
(3) keep such records as may be necessary to disclose the manner in which any assistance under this section is used.
(e) Limitations on liability
(1) Liability of Fund
(2) Liability of Government
(f) Use of proceeds
(Pub. L. 103–325, title I, § 113, Sept. 23, 1994, 108 Stat. 2178.)
§ 4713. Incentives for depository institution participation
(a) Function of Administrator
(1) In generalOf any funds appropriated pursuant to the authorization in section 4718(a) of this title, the funds made available for use in carrying out this section in accordance with section 4718(a)(4) of this title shall be administered by the Administrator of the Fund, in consultation with—
(A) the Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act [12 U.S.C. 1813]) and the National Credit Union Administration;
(B) the individuals named pursuant to clauses (ii) and (iv) of section 4703(d)(2)(G) of this title; and
(C) any other representatives of insured depository institutions or other persons as the Administrator may determine to be appropriate.
(2) Applicability of Bank Enterprise Act of 1991Subject to subsection (b) and the consultation requirement of paragraph (1)—
(A) section 233 of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a] shall be applicable to the Administrator, for purposes of this section, in the same manner and to the same extent that such section is applicable to the Community Enterprise Assessment Credit Board;
(B) the Administrator shall, for purposes of carrying out this section and section 233 of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a]—
(i) have all powers and rights of the Community Enterprise Assessment Credit Board under section 233 of the Bank Enterprise Act of 1991 to administer and enforce any provision of such section 233 which is applicable to the Administrator under this section; and
(ii) shall be subject to the same duties and restrictions imposed on the Community Enterprise Assessment Credit Board; and
(C) the Administrator shall—
(i) have all powers and rights of an appropriate Federal banking agency under section 233(b)(2) of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a(b)(2)] to approve or disapprove the designation of qualified distressed communities for purposes of this section and provide information and assistance with respect to any such designation; and
(ii) shall be subject to the same duties imposed on the appropriate Federal banking agencies under such section 233(b)(2).
(3) Awards
(4) Regulations and guidelines
(5) Exceptions to applicability
(b) Provisions relating to administration of this section
(1) New lifeline accounts
(2) Determination of assessment credit
“(3) Amount of assessment credit“The amount of an assessment credit which may be awarded to an insured depository institution to carry out the qualified activities of the institution or of the subsidiaries of the institution pursuant to this section for any semiannual period shall be equal to the sum of—
“(A) with respect to qualifying activities described in paragraph (2)(A), the amount which is equal to—
“(i) 5 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is not a community development financial institution; or
“(ii) 15 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is a community development financial institution; and
“(B) with respect to qualifying activities described in paragraph (2)(C), 15 percent of the amounts determined under such subparagraph.”
(3) Adjustment of percentageSection 233(a)(5) of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a(a)(5)] shall be applied for purposes of this section by—
(A) substituting “institutions which are community development financial institutions” for “institutions which meet the community development organization requirements under section 234 [12 U.S.C. 1834b]”; and
(B) substituting “institutions which are not community development financial institutions” for “institutions which do not meet such requirements”.
(4) Designation of QDC
(5) Operation on annual basis
(6) Outreach
(7) Qualified activities
(Pub. L. 103–325, title I, § 114, Sept. 23, 1994, 108 Stat. 2179.)
§ 4713a. Guarantees for bonds and notes issued for community or economic development purposes
(a) DefinitionsIn this section, the following definitions shall apply:
(1) Eligible community development financial institution
(2) Eligible community or economic development purposeThe term “eligible community or economic development purpose”—
(A) means any purpose described in section 4707(b) of this title; and
(B) includes the provision of community or economic development in low-income or underserved rural areas.
(3) Guarantee
(4) Loan
(5) Master servicer
(A) In general
(B) Approval criteria for master servicers
(i) loan administration, servicing, and loan monitoring;
(ii) managing regional or national loan intake, processing, or servicing operational systems and infrastructure;
(iii) managing regional or national originator communication systems and infrastructure;
(iv) developing and implementing training and other risk management strategies on a regional or national basis; and
(v) compliance monitoring, investor relations, and reporting.
(6) Program
(7) Program administrator
(8) Qualified issuer
(A) In general
(B) Approval criteria for qualified issuers
(i) In general
(ii) Terms and qualificationsA qualified issuer shall—(I) have appropriate expertise, capacity, and experience, or otherwise be qualified to make loans for eligible community or economic development purposes;(II) provide to the Secretary—(aa) an acceptable statement of the proposed sources and uses of the funds; and(bb) a capital distribution plan that meets the requirements of subsection (c)(1); and(III) certify to the Secretary that the bonds or notes to be guaranteed are to be used for eligible community or economic development purposes.
(C) Department opinion; timing
(i) Department opinion
(ii) Timing
(9) Secretary
(10) Servicer
(b) Guarantees authorizedThe 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—
(1) for eligible community or economic development purposes; or
(2) to refinance loans or notes issued for such purposes.
(c) General program requirements
(1) In general
(2) Relending account
(3) Limitations on unpaid principal balancesThe 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—
(A) community or economic development loans;
(B) a relending account, to the extent authorized under paragraph (2); or
(C) a risk-share pool established under subsection (d).
(4) Repayment
(5) Prohibited usesThe Secretary shall, by regulation—
(A) 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
(B) provide that the guarantee of a bond or note under the Program may not be used for salaries or other administrative costs of—
(i) the qualified issuer; or
(ii) any recipient of amounts from the guarantee of a bond or note.
(d) Risk-share pool
(e) Guarantees
(1) In generalA guarantee issued under the Program shall—
(A) be for the full amount of a bond or note, including the amount of principal, interest, and call premiums;
(B) 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;
(C) represent the full faith and credit of the United States; and
(D) not exceed 30 years.
(2) Limitations
(A) Annual number of guarantees
(B) Guarantee amount
(f) Servicing of transactions
(1) In general
(2) Duties of Program administratorThe duties of a Program administrator shall include—
(A) approving and qualifying eligible community development financial institution applications for participation in the Program;
(B) compliance monitoring;
(C) bond packaging in connection with the Program; and
(D) all other duties and related services that are customarily expected of a Program administrator.
(3) Duties of servicerThe duties of a servicer shall include—
(A) billing and collecting loan payments;
(B) initiating collection activities on past-due loans;
(C) transferring loan payments to the master servicing accounts;
(D) loan administration and servicing;
(E) systematic and timely reporting of loan performance through remittance and servicing reports;
(F) proper measurement of annual outstanding loan requirements; and
(G) all other duties and related services that are customarily expected of servicers.
(4) Duties of master servicerThe duties of a master servicer shall include—
(A) tracking the movement of funds between the accounts of the master servicer and any other servicer;
(B) ensuring orderly receipt of the monthly remittance and servicing reports of the servicer;
(C) monitoring the collection comments and foreclosure actions;
(D) aggregating the reporting and distribution of funds to trustees and investors;
(E) removing and replacing a servicer, as necessary;
(F) loan administration and servicing;
(G) systematic and timely reporting of loan performance compiled from all bond servicers’ reports;
(H) proper distribution of funds to investors; and
(I) all other duties and related services that are customarily expected of a master servicer.
(g) Fees
(1) In general
(2) Payment
(3) Use of fees
(h) Authorization of appropriations
(1) In general
(2) Use of fees
(i) Investment in guaranteed bonds ineligible for Community Reinvestment Act purposes
(j) Administration
(1) Regulations
(2) Implementation
(k) Termination
(Pub. L. 103–325, title I, § 114A, as added Pub. L. 111–240, title I, § 1134, Sept. 27, 2010, 124 Stat. 2515.)
§ 4714. Recordkeeping
(a) In general
(b) User profile information
(c) Access to records
(d) Review
(e) Reporting
(1) Annual reports
(2) Availability of reports
(Pub. L. 103–325, title I, § 115, Sept. 23, 1994, 108 Stat. 2184.)
§ 4715. Special provisions with respect to institutions that are supervised by Federal banking agencies
(a) Consultation with appropriate agenciesThe Fund shall consult with and consider the views of the appropriate Federal banking agency prior to providing assistance under this subchapter to—
(1) an insured community development financial institution;
(2) any community development financial institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency; or
(3) any community development financial institution that has as its community partner an institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency.
(b) Requests for information, reports, or records
(1) In general
(2) Timing of response from appropriate Federal banking agency
(3) Elimination of duplicative information and reporting requirements
(4) Exception
(c) Exclusion for examination reports
(d) Sharing of information
(e) Disclosure prohibited
(f) Privilege maintained
(g) Exceptions
(h) Sanctions
(1) Notification
(2) ExceptionsThe Fund shall not impose a sanction referred to in paragraph (1) if the appropriate Federal banking agency, in writing, not later than 30 calendar days after receiving notice from the Fund—
(A) objects to the proposed sanction;
(B) determines that the sanction would—
(i) have a material adverse effect on the safety and soundness of the institution; or
(ii) impede or interfere with an enforcement action against that institution by that agency;
(C) proposes a comparable alternative action; and
(D) specifically explains—
(i) the basis for the determination under subparagraph (B) and, if appropriate, provides documentation to support the determination; and
(ii) how the alternative action suggested pursuant to subparagraph (C) would be as effective as the sanction proposed by the Fund in securing compliance with this subchapter and deterring future noncompliance.
(i) Safety and soundness considerations
(Pub. L. 103–325, title I, § 116, Sept. 23, 1994, 108 Stat. 2185.)
§ 4716. Studies and reports; examination and audit
(a) Annual report by Fund
(b) Optional studies
(c) Native American lending study
(1) In general
The Fund shall conduct a study on lending and investment practices on Indian reservations and other land held in trust by the United States. Such study shall—
(A) identify barriers to private financing on such lands; and
(B) identify the impact of such barriers on access to capital and credit for Native American populations.
(2) Report
Not later than 12 months after the date on which the Administrator is appointed, the Fund shall submit a report to the President and the Congress that—
(A) contains the findings of the study conducted under paragraph (1);
(B) recommends any necessary statutory and regulatory changes to existing Federal programs; and
(C) makes policy recommendations for community development financial institutions, insured depository institutions, secondary market institutions, and other private sector capital institutions to better serve such populations.
(d) Investment, governance, and role of Fund
(e) Consultation
(f) Examination and audit
(Pub. L. 103–325, title I, § 117, Sept. 23, 1994, 108 Stat. 2187; Pub. L. 110–289, div. A, title II, § 1216(b), July 30, 2008, 122 Stat. 2792.)
§ 4717. Enforcement
(a) Regulations
(1) In general
(2) Regulations required
The regulations promulgated under paragraph (1) shall include regulations applicable to community development financial institutions that are not insured depository institutions to—
(A) prevent conflicts of interest on the part of directors, officers, and employees of community development financial institutions as the Fund determines to be appropriate; and
(B) establish such standards with respect to loans by a community development financial institution to any director, officer, or employee of such institution as the Fund determines to be appropriate, including loan amount limitations.
(b) Administrative enforcement
(Pub. L. 103–325, title I, § 119, Sept. 23, 1994, 108 Stat. 2188.)
§ 4718. Authorization of appropriations
(a) Fund authorization
(1) In general
To carry out this subchapter, there are authorized to be appropriated to the Fund, to remain available until expended—
(A) $60,000,000 for fiscal year 1995;
(B) $104,000,000 for fiscal year 1996;
(C) $107,000,000 for fiscal year 1997; and
(D) $111,000,000 for fiscal year 1998;
or such greater sums as may be necessary to carry out this subchapter.
(2) Administrative expenses
(A) In general
(B) Calculations
(3) Capitalization assistance
(4) Availability for funding section 4713 of this title
(5) Support of community development financial institutions
(b) Community Development Credit Union Revolving Loan Fund
There are authorized to be appropriated for the purposes of the Community Development Credit Union Revolving Loan Fund—
(1) $4,000,000 for fiscal year 1995;
(2) $2,000,000 for fiscal year 1996;
(3) $2,000,000 for fiscal year 1997; and
(4) $2,000,000 for fiscal year 1998.
(c) Budgetary treatment
(Pub. L. 103–325, title I, § 121, Sept. 23, 1994, 108 Stat. 2189.)
§ 4719. Grants to establish loan-loss reserve funds
(a) PurposesThe purposes of this section are—
(1) to make financial assistance available from the Fund in order to help community development financial institutions defray the costs of operating small dollar loan programs, by providing the amounts necessary for such institutions to establish their own loan loss reserve funds to mitigate some of the losses on such small dollar loan programs; and
(2) to encourage community development financial institutions to establish and maintain small dollar loan programs that would help give consumers access to mainstream financial institutions and combat high cost small dollar lending.
(b) Grants
(1) Loan-loss reserve fund grants
(2) Matching requirement
(3) Use of fundsAny grant amounts received by a community development financial institution or any partnership between or among such institutions under paragraph (1)—
(A) may not be used by such institution to provide direct loans to consumers;
(B) may be used by such institution to help recapture a portion or all of a defaulted loan made under the small dollar loan program of such institution; and
(C) may be used to designate and utilize a fiscal agent for services normally provided by such an agent.
(4) Technical assistance grants
(c) DefinitionsFor purposes of this section—
(1) the term “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis” has the same meaning given such term in section 1681a(p) of title 15; and
(2) the term “small dollar loan program” means a loan program wherein a community development financial institution or any partnership between or among such institutions offers loans to consumers that—
(A) are made in amounts not exceeding $2,500;
(B) must be repaid in installments;
(C) have no pre-payment penalty;
(D) the institution has to report payments regarding the loan to at least 1 of the consumer reporting agencies that compiles and maintains files on consumers on a nationwide basis; and
(E) meet any other affordability requirements as may be established by the Administrator.
(Pub. L. 103–325, title I, § 122, as added Pub. L. 111–203, title XII, § 1206, July 21, 2010, 124 Stat. 2131.)