Jobs and Neighborhood Investment Act
This bill establishes investment programs and generally revises provisions related to community development financial institutions and minority depository institutions.
The Department of the Treasury must establish a Neighborhood Capital Investment Program to facilitate direct capital investments in low- and moderate-income community financial institutions. To qualify for the program, these institutions must, among other things, (1) demonstrate specified lending history regarding low-and moderate-income borrowers and other targeted populations, and (2) provide details regarding plans to expand or maintain lending to certain minority communities and historically disadvantaged borrowers.
The bill also establishes the Neighborhood Loan Program through the Federal Reserve Board's emergency powers to create a credit facility for small business loans, specifically targeting low- and moderate-income community financial institutions serving low- and moderate-income and minority communities. The bill requires certain amounts available through existing COVID-19 (i.e., coronavirus disease 2019) economic aid programs to be set aside for the Community Development Financial Institutions Fund.
Regarding minority depository institutions, the bill
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4255 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 4255
To amend the CARES Act to establish community investment programs, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 21, 2020
Mr. Warner (for himself, Mr. Booker, Ms. Harris, and Mr. Schumer)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the CARES Act to establish community investment programs, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Jobs and Neighborhood Investment
Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to--
(1) establish programs to revitalize and provide long-term
financial products and service availability for, and provide
investments in, low- and moderate-income and minority
communities;
(2) respond to the unprecedented loss of Black-owned
businesses and unemployment; and
(3) otherwise enhance the stability, safety and soundness
of community financial institutions that support low- and
moderate-income and minority communities.
SEC. 3. CONSIDERATIONS; REQUIREMENTS FOR CREDITORS.
(a) In General.--In exercising the authorities under this Act and
the amendments made by this Act, the Secretary of the Treasury shall
take into consideration--
(1) increasing the availability of affordable credit for
consumers, small businesses, and nonprofit organizations,
including for projects supporting affordable housing,
community-serving real estate, and other projects, that provide
direct benefits to low- and moderate-income communities, low-
income and underserved individuals, and minorities;
(2) providing funding to minority-owned or minority-led
eligible institutions and other eligible institutions that have
a strong track record of serving minority small businesses;
(3) protecting and increasing jobs in the United States;
(4) increasing the opportunity for small business,
affordable housing and community development in geographic
areas and demographic segments with poverty and high
unemployment rates that exceed the average in the United
States;
(5) ensuring that all low- and moderate-income community
financial institutions may apply to participate in the programs
established under this Act and the amendments made by this Act,
without discrimination based on geography;
(6) providing transparency with respect to use of funds
provided under this Act and the amendments made by this Act;
(7) promoting and engaging in financial education to would-
be borrowers; and
(8) providing funding to eligible institutions that serve
consumers, small businesses, and nonprofit organizations to
support affordable housing, community-serving real estate, and
other projects that provide direct benefits to low- and
moderate-income communities, low-income individuals, and
minorities directly affected by the COVID-19 pandemic.
(b) Requirement for Creditors.--Any creditor participating in a
program established under this Act or the amendments made by this Act
shall fully comply with all applicable statutory and regulatory
requirements relating to fair lending.
SEC. 4. SENSE OF CONGRESS.
It is the sense of Congress that the investments made by the
Secretary of the Treasury under this Act and the amendments made by
this Act should be designed to maximize the benefit to low- and
moderate-income and minority communities and contemplate losses to
capital of the Treasury.
SEC. 5. NEIGHBORHOOD INVESTMENT PROGRAMS.
Title IV of the CARES Act (Public Law 116-136) is amended--
(1) in section 4002 (15 U.S.C. 9041)--
(A) by redesignating paragraphs (7) through (10) as
paragraphs (8) through (11), respectively; and
(B) by inserting after paragraph (6) the following:
``(7) Low- and moderate-income community financial
institution.--The term `low- and moderate-income community
financial institution' means any financial institution that
is--
``(A) a community development financial
institution, as defined in section 103 of the Riegle
Community Development and Regulatory Improvement Act of
1994 (12 U.S.C. 4702); or
``(B) 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), for which the majority of the community served
by the minority depository institution is minority, as
defined in such section.'';
(2) in section 4003 (15 U.S.C. 9042), by adding at the end
the following:
``(i) Neighborhood Capital Investment Program.--
``(1) Definitions.--In this subsection--
``(A) the term `community development financial
institution' has the meaning given the term in section
103 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4702);
``(B) the term `Fund' means the Community
Development Financial Institutions Fund established
under section 104(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (12
U.S.C. 4703(a));
``(C) the term `minority' means any Black American,
Native American, Hispanic American, or Asian American;
and
``(D) the term `Program' means the Neighborhood
Capital Investment Program established under paragraph
(2).
``(2) Establishment.--The Secretary shall establish a
Neighborhood Capital Investment Program to support low- and
moderate-income community financial institutions to provide
loans and forbearance to borrowers in low- and moderate-income
communities, especially for borrowers who are historically
disadvantaged, including minorities, and borrowers in rural and
urban low-income and underserved communities.
``(3) Investments.--Under the Program, the Secretary shall
establish a fund to facilitate direct capital investments,
including purchases and modifications of those purchases, of
senior preferred non-voting stock, subordinated debentures, and
other financial instruments (including equity equivalent
capital and secondary capital investments described in section
216(o)(2)(C) of the Federal Credit Union Act (12 U.S.C.
1790d(o)(2)(C)) from low- and moderate-income community
financial institutions on such terms as are determined by the
Secretary in accordance with this subtitle.
``(4) Application.--
``(A) Acceptance.--The Secretary shall begin
accepting applications for capital investments under
the Program not later than the end of the 30-day period
beginning on the date of enactment of this subsection,
with priority in distribution given to low- and
moderate-income community financial institutions that
are minority-owned or minority-led lenders.
``(B) Requirement to provide a neighborhood
investment lending plan.--
``(i) In general.--At 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, 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, 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
linguistically and culturally
appropriate outreach, where
appropriate;
``(IV) includes an attestation by
the applicant that the applicant does
not own, service, or offer any
financial products 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 is compliant with State
interest rate laws; and
``(V) includes details on how the
applicant plans to expand or maintain
significant lending or investment
activity in low- or moderate-income
minority communities, to historically
disadvantaged borrowers, and to
minorities that have significant unmet
capital or financial services needs.
``(ii) Community development loan funds.--
An applicant that is not an insured community
development financial institution or otherwise
regulated by a Federal financial regulator
shall submit the plan described in clause (i)
only to the Secretary.
``(iii) Documentation.--In the case of an
applicant that is certified as a community
development financial institution as of the
date of enactment of this subsection, for
purposes of clause (i)(I), the Secretary may
rely on documentation submitted the Fund as
part of certification compliance reporting.
``(5) Incentives to increase lending and provide affordable
credit.--
``(A) Requirements on preferred stock and other
financial instrument.--Any financial instrument issued
to Treasury by a low- and moderate-income community
financial institution under the Program shall provide
the following:
``(i) No dividends, interest or other
payments shall exceed 2 percent per annum.
``(ii) After the first 24 months from the
date of the capital investment under the
Program, annual payments may be required, as
determined by the Secretary and in accordance
with this section, and adjusted downward based
on the amount of affordable credit provided by
the low- and moderate-income community
financial institution to borrowers in minority,
rural, and urban low-income and underserved
communities.
``(iii) During any calendar quarter after
the initial 24-month period referred to in
clause (ii), the annual payment rate of a low-
and moderate-income community financial
institution shall be adjusted downward to
reflect the following schedule, based on
lending by the institution relative to the
baseline period:
``(I) If the institution in the
most recent annual period prior to the
investment provides significant lending
or investment activity in low- or
moderate-income minority communities,
historically disadvantaged borrowers,
and to minorities that have significant
unmet capital or financial services,
the annual payment rate shall not
exceed 0.5 percent per annum.
``(II) If the amount of lending
within minority, rural, and urban low-
income and underserved communities and
to low- and moderate-income borrowers
has increased dollar for dollar based
on the amount of the capital
investment, the annual payment rate
shall not exceed 1 percent per annum.
``(III) If the amount of lending
within minority, rural, and urban low-
income and underserved communities and
to low- and moderate-income borrowers
has increased by twice the amount of
the capital investment, the annual
payment rate shall not exceed 0.5
percent per annum.
``(B) Contingency of payments based on certain
financial criteria.--
``(i) Deferral.--Any annual payments under
this subsection 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.
``(ii) Testing during next payment
period.--Any deferred annual payment under this
subsection shall be tested against the metrics
described in clause (i) at the beginning of the
next payment period, and such payments shall
continue to be deferred until the metrics
described in that clause are no longer
applicable.
``(6) Restrictions.--
``(A) In general.--Each low- and moderate-income
community financial institution may only issue
financial instruments or senior preferred stock under
this subsection with an aggregate principal amount that
is--
``(i) not more than 15 percent of risk-
weighted assets for an institution with assets
of more than $2,000,000,000;
``(ii) not more than 25 percent of risk-
weighted 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 30 percent of risk-
weighted assets for an institution with assets
of less than $500,000,000.
``(B) Holding of instruments.--Holding any
instrument of a low- and moderate-income community
financial institution described in subparagraph (A)
shall not give the Treasury or any successor that owns
the instrument any rights over the management of the
institution.
``(C) Sale of interest.--With respect to a capital
investment made into a low- and moderate-income
community financial institution under this subsection,
the Secretary--
``(i) except as provided in clause (iv),
during the 10-year period following the
investment, may not sell the interest of the
Secretary in the capital investment to a third
party;
``(ii) 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; and
``(iii) shall not sell more than a 5
percent ownership interest in the capital
investment to a single third party; and
``(iv) with the permission of the
institution, may gift or sell the interest of
the Secretary in the capital investment for a
de minimus amount to--
``(I) a mission aligned nonprofit
affiliate of an applicant that is an
insured community development financial
institution, as defined in section 103
of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12
U.S.C. 4702); or
``(II) 1 or more mission-aligned
nonprofit organizations selected by the
institution that are not affiliated
with the institution.
``(v) Calculation of ownership for minority
depository institutions.--The calculation and
determination of ownership thresholds for a
depository institution to qualify as a minority
depository institution described in section
4002(7)(B) shall exclude any dilutive effect of
equity investments by the Federal Government,
including under the Program or through the
Fund.
``(7) Available amounts.--In carrying out the Program, the
Secretary shall use such sums as may be necessary, but not less
than $7,000,000,000, from amounts made available under
subsection (b), notwithstanding the limitations on the use of
such funds under paragraphs (1) through (4) of such subsection
(b).
``(8) Treatment of capital investments.--Any capital
investment under the Program shall receive Tier 1 capital
treatment, as defined by the Federal Financial Institutions
Examination Council, or shall be treated as a secondary capital
investment described in section 216(o)(2)(C) of the Federal
Credit Union Act (12 U.S.C. 1790d(o)(2)(C)).
``(9) Outreach to minorities.--The Secretary shall require
low- and moderate-income community financial institutions
receiving capital investments under the Program to provide
linguistically and culturally appropriate outreach and
advertising describing the availability and application process
of receiving loans made possible by the Program through
organizations, trade associations, and individuals that
represent or work within or are members of minority
communities.
``(10) Inapplicability of restrictions.--The restrictions
and limitations described in subparagraphs (E) and (F) of
paragraph (2) and paragraph (3)(A)(ii) of subsection (c) of
section 4003 and in section 4004 shall not apply to the
Program.
``(11) Termination of investment authority.--The authority
to make capital investments in low- and moderate-income
community financial institutions, including commitments to
purchase preferred stock or other instruments, provided under
the Program shall terminate on the date that is 36 months after
the date of enactment of this subsection.
``(12) Collection of data.--Notwithstanding the Equal
Opportunity Credit Act (15 U.S.C. 1691 et seq.)--
``(A) 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
purpose of monitoring compliance under the plan
required under paragraph (4)(B); and
``(B) a low- and moderate-income community
financial 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.
``(13) Deposit of funds.--All funds received by the
Secretary in connection with purchases made pursuant this
subsection, including interest payments, dividend payments, and
proceeds from the sale of any financial instrument, shall be
deposited into the Fund and used to provide financial and
technical assistance pursuant to section 108 of the Riegle
Community Development and Regulatory Improvement Act of 1994
(12 U.S.C. 4707), except that subsection (e) of that section
shall be waived.''.
``(j) Neighborhood Loan Program.--
``(1) Definitions.--In this subsection--
``(A) the term `financial institution' means any
entity regulated by the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System,
or the Federal Deposit Insurance Corporation;
``(B) the term `intermediary' means any entity
engaged in aggregating loans originated by low- and
moderate-income community financial institutions; and
``(C) the term `Program' means the Neighborhood
Loan Program established under paragraph (2).
``(2) Establishment.--The Secretary, in conjunction with
the Board of Governors of the Federal Reserve System, shall
establish a Neighborhood Loan Program to create facilities
under section 13(3) of the Federal Reserve Act (12 U.S.C.
343(3)) to provide liquidity and encourage equity equivalent
capital investments for low- and moderate-income community
financial institutions serving low- and moderate-income and
minority communities.
``(3) Minimization of burden.--Any guidance, regulations,
frequently asked question, or other written or verbal
communications provided by the Secretary or the Board of
Governors of the Federal Reserve System in connection with the
Program shall be designed to minimize any burden to the
relevant low- and moderate-income community financial
institution and to ensure that the Program is actively utilized
by the low- and moderate-income community financial institution
for which the Program is being created.
``(4) Small business community loan participations.--
``(A) In general.--The facilities created under
paragraph (2) shall purchase 90 percent of the balance
of eligible small business loans described in
subparagraph (B), either directly from low- and
moderate-income community financial institutions, or
from intermediaries, to increase access to credit and
build wealth in low- and moderate-income and minority
communities.
``(B) Criteria for eligible small business loans.--
An eligible small business loan described in this
subparagraph shall have--
``(i) a maximum loan balance of $250,000;
``(ii) reasonable loan origination and
service fees; and
``(iii) other terms as prescribed by the
Secretary.
``(C) Eligibility.--To be eligible under
subparagraph (A), a low- and moderate-income community
financial institution shall hold not less than 10
percent of each eligible small business loan described
in subparagraph (B), or 10 percent of the loans as
represented in a loan pool described in subparagraph
(D).
``(D) Loan pool.--Each loan pool described in
subparagraph (A)--
``(i) shall be composed of not less than 50
loans that amount to not less than $1,000,000;
``(ii) shall be originated by a low- and
moderate-income community financial institution
for a commercially reasonable fee charged by
the facility created under the Program;
``(iii) shall be serviced by a low- and
moderate-income community financial institution
for a commercially reasonable fee charged by a
facility created under the Program; and
``(iv) shall be representative of the risk
in the total loan portfolio of the low- and
moderate-income community financial
institution.
``(E) Prioritization.--Low- and moderate-income
community financial institutions shall prioritize the
purchase of eligible small business loans described in
subparagraph (B) that are made to minority-owned small
businesses.
``(5) Equity equivalent loan participations.--
``(A) In general.--The facilities created under
paragraph (2) shall purchase 90 percent participations
in loans made by financial institutions to low- and
moderate-income community financial institutions that
meet the eligibility requirements in this paragraph.
``(B) Eligibility.--To be eligible under
subparagraph (A), a financial institution shall retain
not less than 10 percent of each loan described in
subparagraph (C).
``(C) Loans.--A loan described in this subparagraph
shall be--
``(i) for not more than $10,000,000;
``(ii) originated after March 15, 2020;
``(iii) serviced by a financial
institution; and
``(iv) treated as an equity equivalent
investment, as defined by the Comptroller of
the Currency, the Board of Governors of the
Federal Reserve System, or the Federal Deposit
Insurance Corporation.
``(6) Application date.--The Secretary shall begin
accepting applications under the Program not later than the end
of the 30-day period beginning on the date of enactment of this
subsection.
``(7) Inapplicability of restrictions.--The restrictions
and limitations described in subparagraphs (E) and (F) of
paragraph (2) and paragraph (3)(A)(ii) of subsection (b) of
section 4003 and in section 4004 shall not apply to the
Program.
``(8) Available amounts.--In carrying out the Program, the
Secretary shall use such sums as may be necessary, but not less
than $8,000,000,000, from amounts made available under
paragraph (4) of subsection (b), notwithstanding the
limitations on the use of such funds under that paragraph.
``(9) Termination.--The Program shall terminate on the date
that is 48 months after the date of enactment of this
subsection.
``(k) Application of the Military Lending Act.--
``(1) In general.--No low- and moderate-income community
financial institution that receives an equity investment under
subsection (i) or sells a loan participation under subsection
(j) shall, for so long as the investment or participation
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. 6. SUPPORTING THE CDFI FUND.
(a) Appropriations.--Of the amounts made available to the Secretary
of the Treasury under section 4027 of the CARES Act (Public Law 116-
136), $2,900,000,000 shall be made available to the Fund to carry out
this section.
(b) Set Asides.--Of the amounts made available under subsection
(a), the following amounts shall be set aside:
(1) Up to $1,000,000,000, to remain available until
September 30, 2021, to support, prepare for, and respond to the
economic impact of the coronavirus, provided that the Fund
shall--
(A) provide grants funded under this paragraph
using a formula that takes into account criteria such
as certification status, financial and compliance
performance, portfolio and balance sheet strength, a
diversity of CDFI business model types, and program
capacity, of which not less than $25,000,000 may be for
grants to benefit Native American, Native Hawaiian, and
Alaska Native communities; and
(B) make funds available under this paragraph not
later than 60 days after the date of enactment of this
Act.
(2) Up to $1,000,000,000, to remain available until
expended, to provide grants to CDFIs--
(A) to expand lending or investment activity in
low- or moderate-income minority communities and to
minorities that have significant unmet capital or
financial services needs; and
(B) using a formula that takes into account
criteria such as certification status, financial and
compliance performance, portfolio and balance sheet
strength, a diversity of CDFI business model types, and
program capacity, as well as experience making loans
and investments to those areas and populations
identified in this paragraph.
(3) Up to $400,000,000, to remain available until expended,
for technical assistance, technology, and training under
sections 108(a)(1)(B) and 109, respectively, of the Riegle
Community Development and Regulatory Improvement Act of 1994
(12 U.S.C. 4707(a)(1)(B), 4708), with a preference for
minority-led and minority-owned CDFIs that primarily serve low-
and moderate-income communities.
(4) Up to $500,000,000, to remain available until expended,
to provide grants to recipients that are minority-led and
minority-owned CDFIs.
(c) Administrative Expenses.--Funds made available under this
section may be used for administrative expenses, including
administration of Fund programs and the New Markets Tax Credit Program
under section 45D of the Internal Revenue Code.
(d) Emergency Designation.--
(1) In general.--The amounts provided under this section
are designated as an emergency requirement pursuant to section
4(g) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C.
933(g)).
(2) Designation in senate.--In the Senate, this section is
designated as an emergency requirement pursuant to section
4112(a) of H. Con. Res. 71 (115th Congress), the concurrent
resolution on the budget for fiscal year 2018.
(e) Definitions.--In this section:
(1) CDFI.--The term ``CDFI'' means a community development
financial institution, as defined in section 103 of the Riegle
Community Development and Regulatory Improvement Act of 1994
(12 U.S.C. 4702).
(2) Fund.--The term ``Fund'' means the Community
Development Financial Institutions Fund established under
section 104(a) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4703(a)).
(3) Minority.--The term ``minority'' means any Black
American, Native American, Hispanic American, or Asian
American.
SEC. 7. FEDERAL DEPOSITS IN MINORITY DEPOSITORY INSTITUTIONS.
(a) In General.--Section 308 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:
``(d) Federal Deposits.--The Secretary of the Treasury shall ensure
that deposits made by Federal agencies in minority depository
institutions are fully collateralized or fully 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).''.
(b) Technical Amendments.--Section 308 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1463 note) is amended--
(1) in the matter preceding paragraph (1), by striking
``section--'' and inserting ``section:''; and
(2) in the paragraph heading for paragraph (1), by striking
``financial'' and inserting ``depository''.
SEC. 8. MINORITY BANK DEPOSIT PROGRAM.
(a) 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 BANKS AND MINORITY CREDIT
UNIONS.
``(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 banks and minority credit unions.
``(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 bank or
minority credit union;
``(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 bank or minority credit union 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 ensure, to the maximum
extent possible as permitted by law, the use of minority banks
and minority credit unions to serve the financial needs 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 banks and minority credit
unions to serve the financial needs 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 the term `insured depository
institution' in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813).
``(3) Minority.--The term `minority' means any Black
American, Native American, Hispanic American, or Asian
American.
``(4) Minority bank.--The term `minority bank' means a
minority depository institution as defined in section 308 of
this Act.
``(5) Minority credit union.--The term `minority credit
union' means any credit union for which more than 50 percent of
the membership (including board members) of such credit union
are minority individuals, as determined by the National Credit
Union Administration pursuant to section 308 of this Act.''.
(b) Conforming Amendments.--The following provisions are amended by
striking ``1204(c)(3)'' and inserting ``1204(c)'':
(1) Section 808(b)(3) of the Community Reinvestment Act of
1977 (12 U.S.C. 2907(b)(3)).
(2) Section 40(g)(1)(B) of the Federal Deposit Insurance
Act (12 U.S.C. 1831q(g)(1)(B)).
(3) Section 704B(h)(4) of the Equal Credit Opportunity Act
(15 U.S.C. 1691c-2(h)(4)).
SEC. 9. INVESTMENTS IN MINORITY DEPOSITORY INSTITUTIONS.
(a) Control for Insured Depository 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) of a person to vote 25 per centum or more of
any class of voting securities of an insured depository
institution.''.
(b) Rulemaking.--The appropriate Federal banking agency (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
to allow 3 years to meet the capital requirements otherwise applicable
to minority depository institutions.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the appropriate Federal banking agencies (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall
jointly submit to Congress a report on--
(1) the principal causes for the low number of de novo
minority depository institutions during the 10-year period
preceding the date of the report;
(2) the main challenges to the creation of de novo minority
depository institutions; and
(3) regulatory and legislative considerations to promote
the establishment of de novo minority depository institutions.
SEC. 10. CUSTODIAL DEPOSIT PROGRAM FOR COVERED MINORITY DEPOSITORY
INSTITUTIONS.
(a) Establishment.--The Secretary of the Treasury shall establish a
custodial deposit program (in this section referred to as the
``Program'') under which a covered bank shall receive monthly deposits
from a qualifying account.
(b) Application.--A covered bank shall submit to the Secretary an
application to participate in the Program at such time, in such manner,
and containing such information as the Secretary may determine.
(c) Program Operations.--
(1) Designation of custodial entities.--The Secretary shall
designate eligible custodial entities to make monthly deposits
with covered banks selected for participation in the Program on
behalf of a qualifying account.
(2) Custodial accounts.--
(A) In general.--The Secretary shall establish a
custodial deposit account for each qualifying account
with the eligible custodial entity designated to make
deposits with covered banks for each such qualifying
account.
(B) Amount.--The Secretary shall deposit a total
amount not greater than 5 percent of a qualifying
account into any custodial deposit accounts established
under subparagraph (A).
(C) Deposits with program participants.--
(i) Monthly deposits.--Each month, each
eligible custodial entity designated by the
Secretary shall deposit an amount not greater
than the insured amount, in the aggregate, from
each custodial deposit account, in a single
covered bank.
(ii) Limitation.--With respect to the funds
of an individual qualifying account, the
eligible custodial entity may not deposit an
amount greater than the insured amount in a
single covered bank.
(iii) Insured amount defined.--In this
subparagraph, the term ``insured amount'' means
the amount that is the greater of--
(I) the standard maximum deposit
insurance amount (as defined in section
11(a)(1)(E) of the Federal Deposit
Insurance Act (12 U.S.C.
1821(a)(1)(E))); or
(II) such higher amount negotiated
between the Secretary and the
Corporation under which the Corporation
will insure all deposits of such higher
amount.
(D) Limitations.--The total amount of funds
deposited under the Program in a covered bank may not
exceed the lesser of--
(i) 10 percent of the average amount of
deposits held by such covered bank in the
previous quarter; or
(ii) $100,000,000.
(3) Interest.--
(A) In general.--Each eligible custodial entity
designated by the Secretary shall--
(i) collect interest from each covered bank
in which such custodial entity deposits funds
pursuant to paragraph (2); and
(ii) disburse such interest to the
Secretary each month.
(B) Interest rate.--The rate of any interest
collected under this paragraph may not exceed 50
percent of the discount window primary credit interest
rate most recently published on the Federal Reserve
Statistical Release on selected interest rates (daily
or weekly), commonly referred to as the H.15 release
(commonly known as the ``Federal funds rate'').
(4) Statements.--Each eligible custodial entity designated
by the Secretary shall submit to the Secretary monthly
statements that include the total amount of funds deposited
with, and interest rate received from, each covered bank by the
eligible custodial entity on behalf of qualifying entities.
(5) Records.--The Secretary shall issue a quarterly report
to Congress and make publicly available a record identifying
all covered banks participating in the Program and amounts
deposited under the Program in covered banks.
(d) Requirements Relating to Deposits.--Deposits made with covered
banks under this section may not--
(1) be considered by the Corporation to be funds obtained,
directly or indirectly, by or through any deposit broker for
deposit into 1 or more deposit accounts (as described under
section 29 of the Federal Deposit Insurance Act (12 U.S.C.
1831f)); or
(2) be subject to insurance fees from the Corporation that
are greater than insurance fees for typical demand deposits not
obtained, directly or indirectly, by or through any deposit
broker (commonly known as ``core deposits'').
(e) Modifications.--
(1) In general.--The Secretary shall provide a 3-month
period for public notice and comment before making any material
change to the operation of the Program.
(2) Exception.--The requirements of paragraph (1) shall not
apply if the Secretary makes a material change to the Program
to comply with safety and soundness standards or other law.
(f) Termination.--
(1) By covered bank.--A covered bank selected for
participation in the Program pursuant to subsection (c) may
terminate participation in the Program by providing the
Secretary a notification 60 days prior to termination.
(2) By secretary.--The Secretary may terminate the
participation of a covered bank in the Program if the Secretary
determines the covered bank--
(A) violated any terms of participation in the
Program;
(B) failed to comply with Federal bank secrecy
laws, as documented in writing by the primary regulator
of the covered bank;
(C) failed to remain well capitalized; or
(D) failed comply with safety and soundness
standards, as documented in writing by the primary
regulator of the covered bank.
(g) Definitions.--In this section:
(1) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(2) Covered bank.--The term ``covered bank'' means a
minority depository institution that is regulated by the
Corporation or the National Credit Union Administration that is
well capitalized (as defined in section 38(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1831o(b))).
(3) Eligible custodial entity.--The term ``eligible
custodial entity'' means--
(A) an insured depository institution (as defined
in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813));
(B) an insured credit union (as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752));
or
(C) a well capitalized State-chartered trust
company,
designated by the Secretary under subsection (c)(1).
(4) Federal bank secrecy laws.--The term ``Federal bank
secrecy laws'' means--
(A) section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b);
(B) section 123 of Public Law 91-508; and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(5) Qualifying account.--The term ``qualifying account''
means any account established in the Department of the Treasury
that--
(A) is controlled by the Secretary; and
(B) is expected to maintain a balance greater than
$200,000,000 for the following calendar month.
(6) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(7) Well capitalized.--The term ``well capitalized'' has
the meaning given in section 38 of the Federal Deposit
Insurance Act (12 U.S.C. 1831o).
SEC. 11. ESTABLISHMENT OF FINANCIAL AGENT PARTNERSHIP PROGRAM.
(a) In General.--Section 308 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:
``(d) Financial Agent Partnership Program.--
``(1) Definitions.--In this subsection:
``(A) Financial agent.--The term `financial agent'
means any national banking association designated by
the Secretary 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 of
not less than $50,000,000,000.
``(C) Small community financial institution.--The
term `small community financial institution' means any
financial institution that--
``(i) has total consolidated assets of less
than $3,000,000,000;
``(ii) is an 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; and
``(iii) is--
``(I) a community development
financial institution, as defined in
section 103 of the Riegle Community
Development and Regulatory Improvement
Act of 1994 (12 U.S.C. 4702); or
``(II) a minority depository
institution, as defined in subsection
(b).
``(D) Program.--The term `Program' means the
Financial Agent Partnership Program established under
paragraph (2).
``(E) Secretary.--The term `Secretary' means the
Secretary of the Treasury.
``(2) Establishment.--The Secretary shall establish a
program to be known as the Financial Agent Partnership Program
under which a financial agent designated by the Secretary or a
large financial institution may serve as a partner, under
guidance or regulations prescribed by the Secretary, and at the
request of a small community financial institution, to allow
the small community financial institution--
``(A) to be prepared to perform as a financial
agent;
``(B) to improve capacity to provide services to
the customers of the institution; and
``(C) to participate in contracts awarded by the
Secretary under the National Bank Acts of 1863 and
1864.
``(3) Financial partnerships.--
``(A) In general.--Any large financial institution
participating in a program with the Treasury, if not
already required to include a small community financial
institution, shall offer not more than 5 percent of
every contract under that program to a small community
financial institution.
``(B) Acceptance of risk.--As a requirement of
participation in any financial arrangement under the
Program, a small community financial institution shall
accept the risk of the transaction equivalent to the
percentage of any fee the institution receives under
the Program.
``(C) Partner.--A large financial institution
partner may work with small community financial
institutions, if necessary, to train professionals to
understand any risks involved in a contract under the
Program.
``(4) Outreach.--The Secretary shall--
``(A) issue guidance or regulations to establish a
process under which a financial agent, large financial
institution, or small community financial institution
may participate in the Program; and
``(B) not less frequently than once per year, hold
outreach events to promote the participation of
financial agents, large financial institutions, and
small community financial institutions in the Program.
``(5) 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 (12 U.S.C.
5452(e)) information pertaining to the Program, including--
``(A) the number of financial agents, large
financial institutions, and small community financial
institutions participating in the Program; and
``(B) the number of contracts awarded by the
Secretary where a small community financial institution
participated in a financial agent agreement awarded to
a large financial institution; and
``(C) the number of outreach events described in
paragraph (4) held during the year covered by such
report.''.
(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. 12. APPLICATION OF CARES ACT TO LOW- AND MODERATE-INCOME COMMUNITY
FINANCIAL INSTITUTIONS.
Title IV of the CARES Act (Public Law 116-136) is amended--
(1) in section 4012(b)--
(A) in paragraph (2), by striking ``The interim''
and inserting ``Except as provided in paragraph (3),
the interim''; and
(B) by adding at the end the following:
``(3) Exception for low- and moderate-income community
financial institutions.--Notwithstanding paragraph (2), with
respect to a qualifying community bank that is a low- and
moderate-income community financial institution, the interim
rule issued under paragraph (1) shall be effective during the
period beginning on the date on which the appropriate Federal
banking agencies issue the rule and ending on December 31,
2022.''; and
(2) in section 4013(a)(1)--
(A) by striking ``means the period'' and inserting
``means--
``(A) except as provided in subparagraph (B), the
period'';
(B) in subparagraph (A), as so designated, by
striking the period at the end and inserting ``; and'';
and
(C) by adding at the end the following:
``(B) with respect to a low- and moderate-income
community financial institution, the period beginning
on March 1, 2020, and ending on December 31, 2022.''.
SEC. 13. SUBMISSION OF DATA RELATING TO DIVERSITY BY COMMUNITY
DEVELOPMENT FINANCIAL INSTITUTIONS.
Section 104 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4703) is amended by adding at the
end the following:
``(l) Submission of Data Relating to Diversity.--
``(1) Definitions.--In this subsection--
``(A) the term `executive officer' has the meaning
given the term in section 230.501(f) of title 17, Code
of Federal Regulations, as in effect on the date of
enactment of this subsection; and
``(B) the term `veteran' has the meaning given the
term in section 101 of title 38, United States Code.
``(2) Submission of disclosure.--Each Fund applicant and
recipient shall provide the following:
``(A) Data, based on voluntary self-identification,
on the racial, ethnic, and gender composition of--
``(i) the board of directors of the
institution;
``(ii) nominees for the board of directors
of the institution; and
``(iii) the executive officers of the
institution.
``(B) The status of any member of the board of
directors of the institution, any nominee for the board
of directors of the institution, or any executive
officer of the institution, based on voluntary self-
identification, as a veteran.
``(C) Whether the board of directors of the
institution, or any committee of that board of
directors, has, as of the date on which the institution
makes a disclosure under this paragraph, adopted any
policy, plan, or strategy to promote racial, ethnic,
and gender diversity among--
``(i) the board of directors of the
institution;
``(ii) nominees for the board of directors
of the institution; or
``(iii) the executive officers of the
institution.
``(3) Annual report.--Not later than 18 months after the
date of enactment of this subsection, and annually thereafter,
the Fund shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives, and make publicly
available on the website of the Fund, a report on the data and
trends of the diversity information made available pursuant to
paragraph (2).''.
SEC. 14. REPORTS.
The Secretary shall provide to the appropriate committees of
Congress--
(1) within 30 days of the end of each month commencing with
the first month in which transactions are made under a program
established under this Act or the amendments made by this Act,
a written report describing all of the transactions made during
the reporting period pursuant to the authorities granted under
this Act or the amendments made by this Act; and
(2) after the end of March and the end of September,
commencing September 30, 2021, a written report on all
projected costs and liabilities, all operating expenses,
including compensation for financial agents, and all
transactions made by the Community Development Financial
Institutions Fund, which shall include participating
institutions and amounts each institution has received under
each program described in paragraph (1).
SEC. 15. INSPECTOR GENERAL OVERSIGHT.
(a) In General.--The Inspector General of the Department of the
Treasury shall conduct, supervise, and coordinate audits and
investigations of any program established under this Act or the
amendments made by this Act.
(b) Reporting.--The Inspector General of the Department of the
Treasury shall issue a report not less frequently than 2 times per year
to Congress and the Secretary of the Treasury relating to the oversight
provided by the Office of the Inspector General, including any
recommendations for improvements to the programs described in
subsection (a).
SEC. 16. 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 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>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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