[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1275 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1275

  To facilitate the establishment of community development financial 
                             institutions.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 21 (legislative day, June 30), 1993

Mr. Riegle (for himself, Mr. Sarbanes, Mr. Dodd, Mr. Kerry, Mrs. Boxer, 
   Mr. Campbell, Ms. Moseley-Braun, and Mr. Bradley) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To facilitate the establishment of community development financial 
                             institutions.

    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 ``Community Development Banking and 
Financial Institutions Act of 1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) many of the Nation's urban and rural communities and 
        Indian reservations 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 capital and credit 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;
            (3) in many urban and rural communities, low- and moderate-
        income neighborhoods, and Indian reservations, there is a 
        shortage of capital and credit for business and affordable 
        housing;
            (4) access to capital and credit is essential to unleash 
        the untapped entrepreneurial energy of America's poorest 
        communities and to empower individuals and communities to 
        become self-sufficient; and
            (5) community development financial institutions have 
        proven their ability to identify and respond to community needs 
        for capital, credit, and development services in the absence 
        of, or as a complement to, services provided by other lenders.
    (b) Purpose.--The purpose of this Act is to create a Community 
Development Banking and Financial Institutions Fund that will support a 
program of investment in and assistance to community development 
financial institutions. The Community Development Banking and Financial 
Institutions Fund will provide financial and technical assistance, 
including training, to community development financial institutions, 
serve as a national information clearinghouse, and be an institutional 
voice for community development. The community development financial 
institutions that the Community Development Banking and Financial 
Institutions Fund supports will provide capital, credit, and 
development services to targeted investment areas or populations, and 
will promote economic revitalization and community development.

SEC. 3. DEFINITIONS.

    (a) Appropriate Federal Banking Agency.--The term ``appropriate 
Federal banking agency'' has the same meaning given such term in 
section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).
    (b) Community Development Financial Institution.--The term 
``community development financial institution'' means any bank, savings 
association, depository institution holding company, credit union, 
micro-enterprise loan fund, community development corporation, 
community development revolving loan fund, minority-owned or other 
insured depository institution, or non-depository organization that--
            (1) has as its primary mission the promotion of community 
        development through the provision of capital, credit, or 
        development services in its investment areas or to targeted 
        populations; and
            (2) encourages, through representation on its governing 
        board or otherwise, the input of residents in the investment 
        area or the targeted populations.
A depository institution holding company may qualify as a community 
development financial institution only if the holding company and its 
subsidiaries collectively satisfy the requirements of paragraphs (1) 
and (2). No subsidiary of a depository institution holding company may 
qualify as a community development financial institution if the holding 
company and its subsidiaries collectively do not meet the requirements 
of paragraphs (1) and (2). The term ``community development financial 
institution'' does not include an agency or instrumentality of the 
United States or an agency or instrumentallity of any State or 
political subdivision thereof.
    (c) Depository Institution Holding Company.--The term ``depostitory 
institution holding company'' has the same meaning given such term in 
section 3(w) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)).
    (d) Development Services.--The term ``development services'' means 
activities conducted by a community development financial institution 
that promote community development by developing, supporting, and 
strengthening the lending, investment, and capacity-building activities 
undertaken by institutions, including, but not limited to--
            (1) business planning services;
            (2) financial and credit counseling services;
            (3) marketing and management assistance; and
            (4) administrative activities associated with lending or 
        investment.
    (e) Insured Community Development Financial Institution.--The term 
``insured community development financial institution'' means any 
community development financial institution that is an insured 
depository institution. The term also includes an insured credit union 
which has been designated as low-income by the National Credit Union 
Administration.
    (f) Insured Credit Union.--The term ``insured credit union'' has 
the same meaning given such term in section 101(7) of the Federal 
Credit Union Act (12 U.S.C. 1752(7)).
    (g) Insured Depository Institution.--The term ``insured depository 
institution'' has the same meaning given such term in section 3(c) of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
    (h) Investment Area.--The term ``investment area'' means an 
identifiable community that--
            (1) meets objective criteria of distress, including the 
        number of low-income families, the extent of poverty, the 
        extent of unemployment, the extent of unmet credit needs, the 
        degree of availability of basic financial services, the degree 
        of limited access to capital and credit provided by existing 
        financial institutions, and other factors that the Fund 
        determines to be appropriate; or
            (2) is located in an empowerment zone or enterprise 
        community designated under section 1391 of the Internal Revenue 
        Code of 1986.
    (i) Qualified Community Development Financial Institution.--The 
term ``qualified community development financial institution'' means a 
community development financial institution that meets the requirements 
of sections 5(b) (2) through (8) of this Act.
    (j) Targeted Population.--The term ``targeted population'' means an 
identifiable group of low-income or disadvantaged persons that are 
underserved by existing financial institutions.

SEC. 4. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY DEVELOPMENT 
              BANKING.

    (a) In General.--There is created and chartered a body corporate to 
be known as the Community Development Banking and Financial 
Institutions Fund (referred to in this Act as the ``Fund'') that shall 
have the powers and responsibilities specified by this Act. The Fund 
shall have succession until dissolved. The charter of the Fund may be 
revised, amended, or modified by Congress at any time. The offices of 
the Fund shall be in Washington, D.C.
    (b) Board of Directors.--
            (1) In general.--The powers and management of the Fund 
        shall be vested in a Board of Directors (referred to in this 
        Act as the ``Board''), which shall have nine members.
            (2) Members.--The members of the Board shall consist of the 
        following:
                    (A) The Secretary of Agriculture.
                    (B) The Secretary of Commerce.
                    (C) The Secretary of Housing and Urban Development.
                    (D) The Secretary of the Treasury.
                    (E) The Administrator of the Small Business 
                Administration.
                    (F) Four private citizens, appointed by the 
                President with the advice and consent of the Senate, 
                that collectively--
                            (i) represent community groups whose 
                        constituencies include low-income persons or 
                        residents of investment areas,
                            (ii) have expertise in the operations and 
                        activities of insured depository institutions, 
                        and
                            (iii) have expertise in community 
                        development and lending;
                provided that there should not be less than one member 
                from each of the three categories described in clauses 
                (i) through (iii) of this subparagraph.
            (3) Chairperson.--The President shall appoint from among 
        the members of the Board specified in paragraph (2)(F) a 
        chairperson of the Board, who shall serve at the pleasure of 
        the President for a term of two years.
            (4) Vice-Chairperson.--The President shall appoint from 
        among the members specified in paragraph (2) a vice-chairperson 
        who will serve as chairperson in the absence, disability, or 
        recusal of the chairperson. The vice-chairperson shall serve at 
        the pleasure of the President for a term of two years.
            (5) Terms of appointed members.--
                    (A) In general.--Each member appointed pursuant to 
                paragraph (2)(F) shall serve at the pleasure of the 
                President for a term of four years, except as provided 
                in paragraph (5)(C).
                    (B) Vacancies.--Any member appointed to fill a 
                vacancy occurring prior to the expiration of the term 
                for which the previous member was appointed shall be 
                appointed for the remainder of such term. Appointed 
                members may continue to serve following the expiration 
                of their terms until a successor is appointed and 
                qualified.
                    (C) Terms.--The terms of the initial appointed 
                members shall be for four years and shall begin on the 
                date each member is appointed, except that two of the 
                members initially appointed pursuant to paragraph 
                (2)(F) shall be designated to serve at the pleasure of 
                the President for five years.
            (6) Acting officials.--In the event of a vacancy or absence 
        of the individual in any of the offices described in paragraphs 
        (2) (A) through (E), the official acting in that office shall 
        be a member of the Board.
            (7) Authority to delegate.--Each member of the Board 
        specified in paragraphs (2) (A) through (E) may designate 
        another official who has been appointed by the President with 
        the advice and consent of the Senate within the same agency to 
        serve as a member in his or her stead.
            (8) Compensation.--Members of the Board who are otherwise 
        officers or employees of the United States shall serve without 
        additional compensation for their duties as members, but shall 
        be reimbursed by the Fund for travel, per diem, and other 
        necessary expenses incurred in the performance of their duties, 
        in accordance with sections 5702 and 5703 of title 5, United 
        States Code. The appointed members of the Board shall be 
        entitled to receive compensation at the daily equivalent of the 
        rate for a position under Level IV of the Executive Schedule 
        under section 5315 of title 5, United States Code, and shall be 
        reimbursed by the Fund for travel, per diem, and other 
        necessary expenses incurred in the performance of their duties, 
        in accordance with sections 5702 and 5703 of title 5, United 
        States Code.
            (9) Meetings.--The Board shall hold meetings at least 
        quarterly. Special meetings of the Board may be called by the 
        Chairperson or on the written request of three members of the 
        Board. A majority of the members of the Board in office shall 
        constitute a quorum.
    (c) Officers and Employees.--The Board shall appoint a Chief 
Executive Officer who will be responsible for the management of the 
Fund and such other duties deemed appropriate by the Board. The Board 
shall appoint a Chief Financial Officer who shall oversee all of the 
financial management activities of the Fund. The Board shall also 
appoint an Inspector General. The Board may appoint such other officers 
and employees of the Fund as the Board determines to be necessary or 
appropriate. The Chief Executive Officer, Chief Financial Officer, and 
up to 3 other officers of the Fund may be appointed without regard to 
the provisions of title 5 of the United States Code governing 
appointments in the Federal service and compensated without regard to 
chapter 51 and subchapter III of chapter 53 of title 5 of the United 
States Code, except that the rate of pay for the Chief Executive 
Officer shall not exceed the rate for a position under Level II of the 
Executive Schedule under section 5313 of title 5 of the United States 
Code and the rate of pay for the remaining four officers shall not 
exceed the rate for a position under Level IV of the Executive Schedule 
under section 5315 of title 5 of the United States Code.
    (d) General Powers.--In carrying out its powers and duties, the 
Fund--
            (1) shall have all necessary and proper powers to carry out 
        its authority under this Act;
            (2) may adopt, alter, and use a corporate seal, which shall 
        be judicially noticed;
            (3) may sue and be sued in its corporate name and complain 
        and defend in any court of competent jurisdiction;
            (4) may adopt, amend, and repeal bylaws, rules, and 
        regulations governing the manner in which its business may be 
        conducted and shall have power to make such rules and 
        regulations as may be necessary or appropriate to implement the 
        provisions of this Act;
            (5) may enter into and perform such agreements, contracts, 
        and transactions as may be deemed necessary or appropriate to 
        the conduct of activities authorized under this Act;
            (6) may determine the character of and necessity for its 
        expenditures and the manner in which they shall be incurred, 
        allowed, and paid;
            (7) 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 
        non reimbursable basis; and
            (8) may execute all instruments necessary or appropriate in 
        the exercise of any of its functions under this Act and may 
        delegate to members of the Board, the Chief Executive Officer, 
        or the officers of the Fund such of its powers and 
        responsibilities as it deems necessary or appropriate for the 
        administration of the Fund.
    (e) Wholly-Owned Government Corporation.--
            (1) The Fund shall be a wholly-owned Government corporation 
        in the Executive branch and shall be treated in all respects as 
        an agency of the United States, except to the extent this Act 
        provides otherwise.
            (2) Section 9101(3) of title 31, United States Code (the 
        Government Corporation Control Act), is amended--
                    (A) by redesignating paragraphs (B) through (M) as 
                paragraphs (C) through (N), respectively; and
                    (B) by inserting after paragraph (A) the following:
            ``(B) the Community Development Banking and Financial 
        Institutions Fund.''; and
            (3) Section 9107(b) of title 31, United States Code (the 
        Government Corporation Control Act), shall not apply to 
        deposits of the Fund made pursuant to section 7 of this Act.
    (f) Limitation of Fund and Federal Liability.--The liability of the 
Fund and of the United States Government arising out of any investment 
in a community development financial institution in accordance with 
this Act shall be limited to the amount of the investment and the Fund 
shall be exempt from any assessments and other liabilities that may be 
imposed on controlling or principal shareholders by any Federal law or 
the law of any State, territory, or the District of Columbia. A 
community development financial institution that receives assistance 
pursuant to this Act shall not be deemed to be an agency, department, 
or instrumentality of the United States.
    (g) Prohibition on Issuance of Securities.--The Fund may not issue 
stock, bonds, debentures, notes, or other securities.

SEC. 5. APPLICATIONS FOR ASSISTANCE.

    (a) Form and Procedures.--An application for assistance under this 
Act shall be submitted by an applicant in such form and in accordance 
with such procedures as the Board shall establish. The Board shall 
publish regulations with respect to application requirements and 
procedures not later than 210 days after enactment of this Act.
    (b) Minimum Requirements.--The Board shall require that the 
application--
            (1) demonstrate to the satisfaction of the Board that the 
        applicant is, or upon the receipt of a charter will be, a 
        community development financial institution as defined in 
        section 3(a) of this Act;
            (2) demonstrate that the applicant will serve--
                    (A) a targeted population; or
                    (B) an area which is an investment area;
            (3) in the case of an applicant that has previously 
        received assistance under this Act, demonstrate that the 
        applicant--
                    (A) has successfully carried out its 
                responsibilities under this Act;
                    (B) has become or is about to become an entity that 
                will not be dependent upon assistance from the Fund for 
                continued viability; and
                    (C) will expand its operations into a new 
                investment area, offer new services, or will increase 
                the volume of its current business;
            (4) in the case of a community development financial 
        institution with existing operations, demonstrate a record of 
        success of serving investment areas or targeted populations;
            (5) include a detailed and comprehensive strategic plan for 
        the organization that contains--
                    (A) a business plan of at least five years that 
                demonstrates the applicant is properly managed and has 
                the capacity to form and operate a community 
                development financial institution that is, or will 
                become, an entity that will not be dependent upon 
                assistance from the Fund for continued viability;
                    (B) a statement that the applicant has, or will 
                have, in its charter or other governing documents a 
                primary commitment to community development, or other 
                evidence of a prior history and a continuing 
                affirmation of a primary commitment of community 
                development;
                    (C) an analysis of the needs of the investment area 
                or targeted populations and a strategy for how the 
                applicant will attempt to meet those needs;
                    (D) a plan to coordinate use of assistance from the 
                Fund with existing Federal, government-sponsored 
                enterprise, and State and local assistance programs, 
                and private sector financial services;
                    (E) a statement that the proposed activities of the 
                applicant are consistent with existing economic, 
                community and housing development plans adopted by or 
                applicable to the investment area;
                    (F) a description of how the applicant will 
                affiliate, network, or otherwise coordinate with a full 
                range of community organizations and financial 
                institutions which provide, or will provide, capital, 
                credit, or secondary markets in order to assure that 
                banking, economic development, investment, affordable 
                housing, and other related services will be available 
                within the investment area or to targeted populations; 
                and
                    (G) such other information as the Board deems 
                appropriate for inclusion in the strategic plan;
            (6) demonstrate that the applicant will carry on its 
        activities consistent with the purposes of this Act within the 
        investment area or with respect to a targeted population;
            (7) include a detailed and specific statement of 
        applicant's plans and likely sources of funds to match the 
        amount of assistance from the Fund with funds from private 
        sources in accordance with the requirements of section 7(d) of 
        this Act; and
            (8) include such other information as the Board may 
        require.
    (c) Pre-Application Outreach Program.--The Fund shall provide for 
an outreach program to identify and provide information to potential 
applicants and to increase the capacity of potential applicants to meet 
the application and other requirements of this Act.

SEC. 6. SELECTION OF INSTITUTIONS.

    (a) Selection Criteria.--The Board shall, in its discretion, select 
applications that meet the requirements of section 5 of this Act and 
award assistance from the Fund in accordance with section 7 of this 
Act. In selecting applications, the Board shall consider applications 
based on, but not limited to--
            (1) the likelihood of success of the applicant in forming 
        and operating a community development financial institution;
            (2) the range and comprehensiveness of the capital, credit, 
        and development services to be provided by the applicant;
            (3) the extent of the need, as measured by objective 
        criteria of distress, within the investment areas or targeted 
        populations for the types of activities proposed by the 
        applicant;
            (4) the likelihood that the proposed activities will 
        benefit a significant portion of the investment areas or 
        targeted populations or, in the case of a community development 
        financial institution with existing operations, evidence of a 
        record of success in serving investment areas or targeted 
        populations;
            (5) the extent to which the applicant will concentrate its 
        activities on serving low and very low-income families;
            (6) the evidence of the extent of a broad cross-section of 
        support from the investment areas or targeted populations;
            (7) the experience and background of the proposed 
        management team;
            (8) the amount of legally enforceable commitments available 
        at the time of application to meet or exceed the matching 
        requirements under section 7(d) of this Act and the strength of 
        the plan for raising the balance of the match;
            (9) in the case of applicants that have previously received 
        assistance pursuant to this Act, the extent to which they have 
        met or exceeded their performance goals;
            (10) the extent to which the proposed activities will 
        expand the employment base within the investment areas or the 
        targeted populations;
            (11) the extent to which the applicant is, or will be, 
        community-owned or community-governed;
            (12) whether the applicant is, or will become, an insured 
        community development financial institution;
            (13) whether the applicant is, or will be located, in an 
        empowerment zone or enterprise community designated under 
        section 1391 of the Internal Revenue Code of 1986;
            (14) in the case of an institution that is not an insured 
        community development financial institution, the extent to 
        which the institution has or will have the ability to increase 
        its resources through affiliation with a secondary market, 
        insured depository institution, or other financial intermediary 
        in order to multiply the amount of capital or credit available 
        for community development;
            (15) in the case of an insured depository institution or 
        insured credit union applicant, whether the institution--
                    (A) has or will have a substantial affiliation with 
                an entity or network of entities that are community 
                development financial institutions; and
                    (B) has a comprehensive plan for providing 
                meaningful financial assistance to such an entity or 
                network of entities; and
            (16) other factors deemed appropriate by the Board.
    (b) Geographic Diversity.--In addition to the above, in making its 
selections, the Board shall seek to fund a geographically diverse group 
of applicants, which shall include applicants from nonmetropolitan and 
rural areas.
    (c) Publication Requirement.--The Board shall publish regulations 
with respect to its selection criteria not later than 210 days after 
the date of enactment of this Act.

SEC. 7. ASSISTANCE PROVIDED BY THE FUND.

    (a) Purpose of Assistance.--
            (1) The Fund shall work to promote an environment 
        hospitable to business formation, economic growth, community 
        development, and affordable housing in distressed communities. 
        The Fund shall coordinate its activities with existing Federal 
        and other community and economic development programs.
            (2) Assistance may be provided to an existing qualified 
        community development financial institution to expand its 
        activities to serve investment areas or targeted populations 
        not currently served by another qualified community development 
        financial institution receiving assistance under this section 
        or to expand the volume of its activities consistent with the 
        purposes of this Act, or to form a new entity to undertake 
        activities consistent with the purposes of this Act, or to 
        assist an existing entity to modify its structure or activities 
        in order to undertake activities consistent with the purposes 
        of this Act.
    (b) Types of Assistance.--
            (1) In general.--The Fund may provide financial assistance 
        to qualified community development financial institutions 
        through equity investments, loans, deposits, membership shares, 
        and grants. The Fund may also provide technical assistance, 
        including training, and grants for technical assistance to 
        qualified community development financial institutions. The 
        allocation of awards of assistance between insured and 
        uninsured community development financial institutions shall be 
        in the discretion of the Board, provided that due consideration 
        shall be given to the allocation of funds to insured community 
        development financial institutions.
            (2) Financial assistance.--The fund shall structure 
        financial assistance to a qualified community development 
        financial institution in such a manner that it does not own 
        more than 50 percent of the equity of such institution and does 
        not control the operations of such institution. The Fund will 
        not be deemed to control such institution for the purposes of 
        applicable laws. With respect to equity investments, the Fund 
        shall hold only transferable, nonvoting investments. Such 
        equity investments may provide for convertibility to voting 
        stock upon transfer by the Fund.
            (3) Deposits.--Notwithstanding any other provision of law, 
        deposits made pursuant to this section in qualified insured 
        community development financial institutions shall not be 
        subject to any requirement for collateral or security.
            (4) Limitations on obligations.--Direct loan obligations 
        may be incurred only to the extent that appropriations of 
        budget authority to cover their costs, as defined in section 
        502 of the Congressional Budget Act of 1974, are made in 
        advance.
    (c) Purpose of Financial Assistance.--Financial assistance made 
available under this Act may be used by assisted institutions to 
develop or support--
            (1) commercial facilities that enhance revitalization, 
        community stability, or job creation and retention efforts;
            (2) business creation and expansion efforts that--
                    (A) create or retain jobs for low-income people;
                    (B) enhance the availability of products and 
                services to low-income people; or
                    (C) create or retain businesses owned by low-income 
                people or residents of a targeted area;
            (3) community facilities that provide benefits to low-
        income people or enhance community stability;
            (4) the provision of basic financial services to low-income 
        people or residents of a targeted area;
            (5) the provision of development services;
            (6) home ownership opportunities that are affordable to 
        low-income households;
            (7) rental housing that is principally affordable to low-
        income households; and
            (8) other activities deemed appropriate by the Fund.
    (d) Amount of Assistance.--The Fund may provide up to $5,000,000 of 
assistance per application to any one qualified insured community 
development financial institution and up to $2,000,000 per application 
to any other qualified community development financial institution. The 
Fund shall have the authority to set minimum amounts of assistance per 
institution.
    (e) Matching Requirements.--
            (1) Assistance provided to qualified insured community 
        development financial institutions, other than deposits or 
        membership shares of $100,000 or less, technical assistance, or 
        grants for technical assistance, shall be matched by no less 
        than one dollar of equity, deposits or membership shares for 
        each dollar provided by the Fund. The Fund shall require a 
        match for all other assistance, the amount and form of which 
        shall be in the discretion of the Fund; provided that, the Fund 
        shall in no event require assistance provided in the form of 
        deposits or membership shares of $100,000 or less, technical 
        assistance, or grants for technical assistance to be matched. 
        The Fund shall provide no assistance except technical 
        assistance or grants for technical assistance until a qualified 
        community development financial institution has secured legally 
        enforceable commitments for the entire match required. 
        Assistance may be provided in one lump sum, or over a period of 
        time, as determined by the Fund.
            (2) Assistance shall be matched with funds from sources 
        other than the Federal Government.
    (f) Terms and Conditions.--
            (1) In general.--The Fund shall provide assistance 
        authorized under this Act in such form and subject to such 
        restrictions as are necessary to ensure that to the maximum 
        extent practicable--
                    (A) all assistance granted is used by the qualified 
                community development financial institution in a manner 
                consistent with the purposes of this Act;
                    (B) qualified community development financial 
                institutions receiving assistance that are not 
                otherwise regulated by the Federal government or by a 
                State government are financially and managerially 
                sound;
                    (C) assistance results in a net increase, both 
                nationally and in the local communities in which 
                assistance is provided, in capital, credit, and 
                development services; and
                    (D) assistance is provided in a manner that 
                encourages affiliations and partnerships between 
                insured depository institutions, secondary markets or 
                other sources of credit or leverage and local 
                organizations dedicated to community development.
            (2) Consultation with banking regulators.--Prior to 
        providing assistance to a qualified insured community 
        development financial institution, the Board should consult 
        with the appropriate Federal banking agency or, in the case of 
        an insured credit union, the National Credit Union 
        Administration.
            (3) Assistance agreement.--
                    (A) The Board shall impose restrictions on the use 
                of assistance through a stock purchase agreement, share 
                purchase agreement, or through a contract entered into 
                in consideration for the provision of assistance.
                    (B) Such agreement or contract shall require 
                institutions assisted under this Act to comply with 
                performance goals. The performance goals shall be 
                negotiated between the Board and each qualified 
                community development financial institution receiving 
                assistance based upon the strategic plan submitted 
                pursuant to section 5(b)(5) of this Act. The 
                performance goals may be renegotiated jointly as 
                necessary or appropriate, subject to subparagraph (C) 
                of this section. Activity levels for insured community 
                development financial institutions should be determined 
                by the Board in consultation with the appropriate 
                Federal banking agency or, in the case of an insured 
                credit union, with the National Credit Union 
                Administration.
                    (C) The agreement or contract shall specify 
                sanctions available to the Board, in its discretion, in 
                the event of noncompliance with the purposes of this 
                Act or the terms of the agreement. The sanctions may 
                include revocation of approval of the application, 
                terminating or reducing future assistance, requiring 
                repayment of assistance, and requiring changes to the 
                performance goals imposed pursuant to subparagraph (B) 
                or to the strategic plan submitted pursuant to section 
                5(b)(5) of this Act. In the case of an insured 
                community development financial institution, the Board 
                shall consult with the appropriate Federal banking 
                agency or, in the case of an insured credit union, the 
                National Credit Union Administration, before imposing 
                sanctions pursuant to this paragraph.
            (4) Review.--At least annually, the Board shall review the 
        performance of each assisted qualified community development 
        financial institution in carrying out its strategic plan and 
        performance goals.
            (5) Reporting.--The Board shall require each qualified 
        community development financial institution receiving 
        assistance to submit an annual report to the Fund on its 
        activities, its financial condition, its success in meeting 
        performance goals, and its compliance with other requirements 
        of this Act.
    (g) Authority to Sell Equity Investment and Loans.--The Board shall 
have the authority at any time to sell its investments and loans and 
may, in its discretion, retain the power to enforce limitations on 
assistance entered into in accordance with the requirements of this 
Act.
    (h) No Authority to Limit Supervision and Regulation.--Nothing in 
this Act shall affect any authority of the appropriate Federal banking 
agency or, in the case of an insured credit union, the National Credit 
Union Administration, to supervise and regulate an insured community 
development financial institution.

SEC. 8. ENCOURAGEMENT OF PRIVATE ENTITIES.

    The Board may cause to be incorporated, or encourage the 
incorporation of, private non-profit and for-profit entities that will 
complement the activities of the Fund in carrying out the purposes of 
this Act. The purposes of any such entities shall be limited to 
investing in and assisting community development financial institutions 
in a manner similar to the activities of the Fund under this Act. Any 
such entities shall be managed exclusively by private individuals who 
are selected in accordance with the laws of the jurisdiction of 
incorporation.

SEC. 9. CLEARINGHOUSE FUNCTION.

    The Fund shall establish and maintain an information clearinghouse 
in coordination with the Departments of Agriculture, Commerce, and 
Housing and Urban Development, the Small Business Administration, other 
Federal agencies, and community development financial institutions--
            (1) to cause to be collected, compiled, and analyzed 
        information pertinent to community development financial 
        institutions that will assist in creating, developing, 
        expanding, and preserving these institutions; and
            (2) to cause to be established a service center for 
        comprehensive information on financial, technical, and 
        management assistance, case studies of the activities of 
        community development financial institutions, regulations, and 
        other information that may promote the purposes of this Act.

SEC. 10. RECORDKEEPING, REPORTS, AND AUDITS.

    (a) Recordkeeping.--
            (1) A qualified community development financial institution 
        receiving assistance from the Fund shall keep such records as 
        may be reasonably necessary to disclose the disposition of any 
        assistance under this Act and to ensure compliance with the 
        requirements of this Act.
            (2) The Fund shall have access, for the purpose of 
        determining compliance with this Act, to any books, documents, 
        papers, and records of a qualified community development 
        financial institution receiving assistance from the Fund that 
        are pertinent to assistance received under this Act.
    (b) Reports.--
            (1) Annual report.--The Fund shall conduct an annual 
        evaluation of the activities carried out pursuant to this Act 
        and shall submit a report of its findings to the President 
        within 120 days of the end of each fiscal year of the Fund. The 
        report shall include financial statements audited in accordance 
        with subsection (c).
            (2) Institutional voice for community development.--
                    (A) Ongoing study.--The Fund shall conduct, or 
                cause to be conducted, an ongoing study to identify and 
                evaluate the most effective and financially sound 
                policies and practices for encouraging investment in 
                distressed communities, including small business and 
                commercial lending, business formation and expansion, 
                community and economic development, commercial real 
                estate and multi-family housing, and home mortgages. In 
                addition, the Fund may study, or cause to be studied, 
                related matters, such as identification of sources of 
                and access to capital and loans for community 
                investment; development of secondary markets for 
                economic and community development, small business and 
                commercial loans, and home mortgage loans and 
                investments; and methods to involve all segments of the 
                financial services industry in community development.
                    (B) Consultation.--In the conduct of the study, the 
                Fund shall consult, or cause consultation with, the 
                Office of the Comptroller of the Currency, the Federal 
                Deposit Insurance Corporation, the Board of Governors 
                of the Federal Reserve System, the Federal Housing 
                Finance Board, the Farm Credit Administration, the 
                Office of Thrift Supervision, the National Credit Union 
                Administration, community reinvestment, civil rights, 
                consumer and financial organizations, and such 
                representatives of agencies or other persons as the 
                Fund may determine.
                    (C) Reports.--Within 270 days after the date of 
                enactment of this Act, the Fund shall report to the 
                President its initial findings and recommendations 
                regarding the matters set forth in subparagraph (A). 
                Thereafter, the Fund shall report its findings and 
                recommendations to the President with the annual report 
                required and recommendations to the President with the 
                annual report required by paragraph (b)(1).
            (3) Investment, governance, and role of fund.--Six years 
        following the date of enactment of this Act, the Fund, in 
        accordance with the procedures described in paragraphs (2)(A) 
        and (B), shall conduct a study evaluating the structure, 
        governance, and performance of the Fund. The study shall be 
        submitted to the President. Such study shall include an 
        evaluation of the overall performance of the Fund in meeting 
        the purposes of this Act and any recommendations of the Fund 
        for restructuring the Board, altering procedures under which 
        the Fund is governed, the future role of the Fund in addressing 
        community development, and the ability of the Fund to become a 
        private, self-sustaining entity capable of fulfilling the 
        purposes of this Act.
    (c) Examination and Audit.--The financial statements of the Fund 
shall be audited in accordance with section 9105 of title 31, United 
States Code, except that audits required by section 9105(a) of that 
title shall be performed annually.

SEC. 11. INVESTMENT OF RECEIPTS AND PROCEEDS.

    Any dividends on equity investments and proceeds from the 
disposition of investments, deposits, or membership shares that are 
received by the Fund as a result of assistance provided pursuant to 
section 7 of this Act shall be deposited and accredited to an account 
of the Fund established to carry out the authorized purposes of this 
Act. Upon request of the Chief Executive Officer, the Secretary of the 
Treasury shall invest amounts deposited in such account in public debt 
securities with maturities suitable to the needs of the Fund, as 
determined by the Chief Executive Officer, and bearing interest at 
rates determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. Amounts 
deposited into the account and interest earned on such amounts pursuant 
to this section shall be available to the Fund until expended.

SEC. 12. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to the 
Fund, to remain available until expanded, $60,000,000 for fiscal year 
1994, $104,000,000 for fiscal year 1995, $107,000,000 for fiscal year 
1996, and $111,000,000 for fiscal year 1997, or such greater sums as 
may be appropriated, to carry out the purposes of the Act.
    (b) Administrative Expenses.--The Fund may set aside up to 
$10,000,000 each fiscal year to pay administrative costs and expenses.

SEC. 13. CONFORMING AMENDMENT.

    Section 8E(a)(2) of the Inspector General Act of 1978 (5 U.S.C. 
app. 3, 8E(a)(2)) is amended by inserting ``the Community Development 
Banking and Financial Institutions Fund,'' immediately following ``the 
Community Futures Trading Commission,''.

                                 <all>

S 1275 IS----2