[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 861 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 861

To provide assistance to community development financial institutions, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               April 30 (legislative day, April 19), 1993

   Mr. Bradley (for himself, Mr. Biden, Mrs. Boxer, Mr. Bryan, Mrs. 
   Feinstein, Mr. Hollings, Mr. Kohl, Mr. Kerrey, Ms. Mikulski, Ms. 
  Moseley-Braun, Mr. Reid, Mr. Robb, Mr. Rockefeller, Mr. Simon, Mr. 
  Wellstone, Mr. Kerry, Mr. Lieberman, and Mr. Hatch) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To provide assistance to community development financial institutions, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Community Capital 
Partnership Act of 1993''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Community Investment Corporation demonstration amendments.
Sec. 4. Community development credit union assistance.
Sec. 5. Community development banking transition assistance.
Sec. 6. Federal assistance to community development loan and investment 
                            funds.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) access to credit is essential to eliminating poverty 
        and alleviating economically-distressed communities ;
            (2) many small- and medium-size businesses, low-income 
        individuals, and economically-distressed areas lack adequate 
        access to credit and private capital;
            (3) community development banks, community development loan 
        funds, community development credit unions, micro-enterprise 
        loan funds, and community development corporations have all 
        been instrumental in channeling private capital to 
        economically-distressed areas;
            (4) the investments of these community development 
        financial institutions have resulted in the development of 
        areas that are not currently being adequately served by 
        traditional financial institutions;
            (5) community development financial institutions often 
        provide a link between conventional lending institutions and 
        unconventional borrowers by creating new markets for the 
        lenders while giving the borrowers access to capital; and
            (6) the Federal Government can assist in the development of 
        community development financial institutions by providing 
        capital and operating assistance.
    (b) Purpose.--The purpose of this Act is to provide Federal 
assistance to community development financial institutions to better 
enable them to broaden their development activities.

SEC. 3. COMMUNITY INVESTMENT CORPORATION DEMONSTRATION AMENDMENTS.

    (a) Definition of Eligible Organization.--Section 853(b)(3)(D)(i) 
of the Housing and Community Development Act of 1992 (42 U.S.C. 
5305(b)(3)(D)(i)) is amended--
            (1) by striking ``or'' at the end of subclause (I); and
            (2) by adding at the end the following:
                                    ``(III) a Federal or State credit 
                                union, as defined in section 101 of the 
                                Federal Credit Union Act (12 U.S.C. 
                                1752);
                                    ``(IV) a nonprofit organization, as 
                                provided for under section 501(c)(3) of 
                                the Internal Revenue Code of 1986, 
                                which acts primarily as a financial 
                                intermediary that routinely takes in 
                                funds from many sources in the form of 
                                grants, deposits, or loans, and 
                                routinely lends these funds out or 
                                makes equity investments with these 
                                funds; or
                                    ``(V) a depository institution that 
                                is not owned by a depository 
                                institution holding company, as both 
                                terms are defined in section 3 of the 
                                Federal Deposit Insurance Act (12 
                                U.S.C. 1813).''.
    (b) Selection Criteria.--Section 853(b)(4) of the Housing and 
Community Development Act of 1992 is amended--
            (1) by striking ``and'' at the end of subparagraph (G);
            (2) by striking the period at the end of subparagraph (H) 
        and inserting a semicolon;
            (3) by adding at the end of subparagraph (D) the following: 
        ``, as
                    ``measured by--
                            ``(i) the number of federally insured 
                        depository institutions serving the area;
                            ``(ii) the incidence of poverty in general 
                        and among specific racial and ethnic groups in 
                        the area; and
                            ``(iii) the degree of unemployment in 
                        general and among specific ethnic groups in the 
                        area;''; and
            (4) by adding at the end the following new subparagraphs:
                    ``(I) with respect to federally regulated financial 
                institutions, such institutions' record of complying 
                with all requirements of the appropriate Federal 
                supervisory agencies; and
                    ``(J) the financial condition of the applicant.''.
    (c) Capital Assistance.--Section 853(b)(7)(A) of the Housing and 
Community Development Act of 1992 is amended to read as follows:
                    ``(A) In general.--The Secretary shall make grants 
                and loans to eligible organizations.''.
    (d) Authorization.--Section 853(b)(7)(D) of the Housing and 
Community Development Act of 1992 is amended by striking 
``$26,000,000'' and inserting ``$50,000,000''.
    (e) Capital Requirements.--Section 853(b)(7) of the Housing and 
Community Development Act of 1992 is amended--
            (1) by striking subparagraph (C); and
            (2) by redesignating subparagraph (D) as subparagraph (C).
    (f) Development Services and Technical Assistance Grants.--Section 
853(b)(8)(B) of the Housing and Community Development Act of 1992 is 
amended by striking ``$15,600,000'' and inserting ``$25,000,000''.
    (g) Training Program.--Section 853(b)(9)(B) of the Housing and 
Community Development Act of 1992 is amended by striking ``$2,100,000'' 
and inserting ``$5,000,000''.

SEC. 4. COMMUNITY DEVELOPMENT CREDIT UNION ASSISTANCE.

    (a) In General.--The Federal Credit Union Act is amended by 
inserting after section 129 (12 U.S.C. 1772c) the following new 
section:

``SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT 
              UNIONS.

    ``(a) Authorization of Appropriations.--There is authorized to be 
appropriated $25,000,000 for the purposes of the Community Development 
Revolving Loan Fund.
    ``(b) Investment of Funds.--The Board may invest any idle Fund 
moneys in United States Treasury securities. Any interest accrued on 
such securities shall become a part of the Fund.
    ``(c) Authority.--Notwithstanding any other provision of law, the 
Board may exercise the authority granted it by the Community 
Development Credit Union Revolving Loan Fund Transfer Act (Public Law 
99-609, sec. 1, Nov. 6, 1986, 100 Stat. 3475), including any additional 
appropriations made and earnings accrued, subject only to this section 
and to rules and regulations prescribed by the Board.''.
    (b) Conforming Amendment.--The Federal Credit Union Act is amended 
by striking section 120(k) (12 U.S.C. 1766(k)).

SEC. 5. COMMUNITY DEVELOPMENT BANKING TRANSITION ASSISTANCE.

    (a) In General.--The Secretary of Housing and Urban Development 
(hereafter in this Act referred to as the ``Secretary'') may provide 
capital and operating assistance to--
            (1) existing community development banks to expand their 
        activities; and
            (2) community development financial institutions and 
        community development corporations to assist such institutions 
        to expand into community development banks.
    (b) Definition of Community Development Bank.--For the purposes of 
this Act, the term ``community development bank'' means an 
organization--
            (1) that owns, controls, is affiliated with, or is a 
        federally insured depository institution which is regulated by 
        a Federal financial supervisory agency;
            (2) owns, controls, or is affiliated with at least one or 
        more subsidiaries or affiliated organizations that supplement 
        the depository institution's lending with technical assistance, 
        direct community development activities, or higher risk 
        financing;
            (3) whose primary or sole mission is to revitalize a 
        targeted geographic area;
            (4) that maintains through significant representation on 
        its governing board and otherwise, accountability to community 
        residents; and
            (5) that has principals active in the implementation of its 
        programs who possess significant experience in lending and the 
        development of affordable housing, small business development, 
        or community revitalization.
    (c) Eligibility for Transition Assistance.--
            (1) In general.--The Secretary may provide transition 
        assistance to any institution, corporation, or nonprofit 
        community development organization that is eligible for 
        assistance under section 853(b)(3)(D) of the Housing and 
        Community Development Act of 1992 (42 U.S.C. 5305(b)(3)(D) 
        note), or to a community development corporation as defined in 
        paragraph (2).
            (2) Definition.--For the purposes of this subsection, the 
        term ``community development corporation'' means a private, 
        nonprofit corporation--
                    (A) the principal purpose of which includes 
                providing housing or community economic development 
                projects that primarily benefit low-income individuals 
                and communities;
                    (B) that is not owned or controlled by a depository 
                institution holding company, as defined in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813); and
                    (C) that matches dollar-for-dollar any assistance 
                received under this section with funds from non-Federal 
                sources.
    (d) Selection Criteria.--
            (1) In general.--The Secretary shall select organizations 
        to provide assistance under this section based on the selection 
        criteria set forth in section 853(b)(4) of the Housing and 
        Community Development Act of 1992 and additional applicable 
        selection criteria set forth in paragraph (2).
            (2) Additional selection criteria.--
                    (A) Selection criteria for established community 
                development banks.--In addition to the selection 
                criteria set forth in paragraph (1), the Secretary 
                shall select eligible community development banks based 
                on--
                            (i) the potential for the institution to 
                        expand the scale and range of its development 
                        lending;
                            (ii) the potential for growth in deposits 
                        due to increases in the institution's capital 
                        base;
                            (iii) the potential for the development of 
                        new loan products and services which could be 
                        replicated by other lenders; and
                            (iv) the potential for refinement of staff 
                        skills and increased organizational self-
                        sufficiency.
                    (B) Selection criteria for nondepository lending 
                institutions.--In addition to the selection criteria 
                set forth in paragraph (1), the Secretary shall select 
                eligible nondepository lending institutions based on--
                            (i) the potential for expansion of the 
                        institution's existing lending targets;
                            (ii) the potential for the institution to 
                        develop banking products and services;
                            (iii) the potential for the institution to 
                        expand its systems, networks, and capacity;
                            (iv) the potential for refinement of staff 
                        skills; and
                            (v) the potential for the institution to 
                        add a depository component by chartering a new 
                        depository institution, merging or affiliating 
                        with an existing depository institution, or 
                        buying a controlling interest in a stockholder-
                        owned depository institution.
                    (C) Selection criteria for existing community 
                development credit unions.--In addition to the 
                selection criteria set forth in paragraph (1), the 
                Secretary shall select eligible community development 
                credit unions based on--
                            (i) the potential for expansion of the 
                        institution's existing lending activities;
                            (ii) the potential for the institution to 
                        expand its capacity to undertake sophisticated 
                        financing and development services activities;
                            (iii) the potential for the institution to 
                        expand its deposit base; and
                            (iv) the potential for refinement of staff 
                        skills.
                    (D) Selection criteria for existing community 
                development corporations not engaged in developing 
                lending.--In addition to the selection criteria set 
                forth in paragraph (1), the Secretary shall select 
                eligible community development corporations that are 
                not engaged in development lending based on--
                            (i) the potential for the institution to 
                        undertake development lending;
                            (ii) the potential for the institution to 
                        charter, acquire, or affiliate with a 
                        development lending institution;
                            (iii) the potential for the institution to 
                        expand its systems, network, and capacity; and
                            (iv) the potential for refinement of staff 
                        skills.
    (e) Course-of-Action Statement.--
            (1) In general.--The Secretary shall also base the 
        selection of applicants on a course-of-action statement 
        submitted by eligible institutions that describes how the 
        applicant satisfies the selection criteria set forth in 
        subsection (d), and, where applicable, how the applicant 
        intends to become a community development bank.
            (2) In particular.--Each course-of-action statement shall 
        outline specifically how and over what time period the 
        applicant will achieve the goals set out in subsection (d) that 
        apply to the particular applicant and how the applicant plans 
        to develop into a community development bank, if applicable.
    (f) Assistance.--Assistance available shall be in the form of 
operating assistance or capital assistance, and may vary depending on 
the recipient's organizational type or stage of development toward the 
community development banking model. The Secretary may determine the 
terms and conditions of such assistance, consistent with the purposes 
of this Act.
    (g) Eligible Activities.--
            (1) Capital assistance.--Capital assistance provided under 
        this section may only be used to--
                    (A) increase the amount of capital available to 
                make loans;
                    (B) provide funds for equity investments in 
                projects;
                    (C) provide credit enhancement;
                    (D) increase an institution's development lending 
                activities; or
                    (E) further other activities that the Secretary 
                deems appropriate.
            (2) Operating assistance.--Operating assistance provided 
        under this section may only be used to assist in--
                    (A) marketing and management activities;
                    (B) business planning and counseling services;
                    (C) staff training;
                    (D) planning the transition of the institution from 
                its current activities to community development 
                banking; or
                    (E) other capacity building activities which the 
                Secretary deems appropriate.
    (h) Performance Standards.--
            (1) In general.--As a condition of assistance, the 
        Secretary shall negotiate performance standards with each 
        applicant based on the applicant's course-of-action statement 
        and other factors consistent with the criteria set forth in 
        subsection (d) that the Secretary deems appropriate. These 
        performance standards shall be met by the applicant over a 
        period of time to be determined by the Secretary.
            (2) In particular.--In addition to other issues deemed 
        appropriate by the Secretary, performance standards shall 
        relate to an applicant's--
                    (A) lending volume;
                    (B) portfolio performance;
                    (C) staff development; and
                    (D) service to traditionally underserved 
                communities within the applicant's targeted geographic 
                area.
            (3) Failure to meet performance standards.--The Secretary 
        may deny funding to an applicant if the Secretary determines 
        that the applicant has not satisfactorily met performance 
        standards negotiated pursuant to this subsection.
    (i) Activities Required.--All eligible organizations receiving 
assistance under this Act shall engage in activities that provide 
access to capital for initiatives that benefit residents and businesses 
in targeted geographic areas.
    (j) Authorization.--There are authorized to be appropriated 
$400,000,000 for fiscal years 1994 through 1997 for the purpose of 
carrying out this section.
    (k) Evaluation and Report.--The Secretary shall submit to the 
Congress an annual report containing a summary of the activities 
carried out under this section during the fiscal year and any 
preliminary findings or conclusions.
    (l) Regulations.--
            (1) By the secretary.--Not later than 6 months after the 
        date of enactment of this Act, the Secretary shall issue such 
        regulations as may be necessary to carry out the provisions of 
        this subsection.
            (2) By other agencies.--The appropriate Federal financial 
        supervisory agency, by regulation or order--
                    (A) may restrict any regulated financial 
                institution's receipt of an extension of credit from, 
                or investment by, an eligible organization;
                    (B) may restrict the making, by a regulated 
                financial institution or holding company, of an 
                extension of credit to, or investment in, an eligible 
                organization; and
                    (C) shall prohibit any transaction that poses an 
                undue risk to the affected deposit insurance fund.
            (3) Coordination.--To the extent practicable, the Secretary 
        and the Federal financial supervisory agencies shall coordinate 
        the development of regulations and other program guidelines.
    (m) Advisory Board.--In establishing requirements to carry out this 
section and considering applications under this section, the Secretary 
shall consult with the advisory board established pursuant to section 
853(b)(11) of the Housing and Community Development Act of 1992.
    (n) Safety and Soundness of Insured Depositories.--Nothing in this 
section shall limit the applicability of other law relating to the safe 
and sound operation and management of a regulated financial institution 
(or a holding company) affiliated with an eligible organization or 
receiving assistance provided under this section.

SEC. 6. FEDERAL ASSISTANCE TO COMMUNITY DEVELOPMENT LOAN AND INVESTMENT 
              FUNDS.

    (a) In General.--The Secretary may make grants to nonprofit 
community development loan and equity funds that meet the requirements 
of this section.
    (b) Amount of Grants.--A grant under this section may not exceed 
$1,000,000 to each recipient.
    (c) Eligibility.--The Secretary may make grants to any nonprofit 
community development loan or equity fund that--
            (1) is a nonprofit organization;
            (2) acts primarily as a financial intermediary that 
        routinely takes in funds from many sources in the form of 
        grants, deposits, or loans;
            (3) that routinely lends or invests these funds out in 
        amounts of between $25,000 and $250,000;
            (4) that has as its primary mission the revitalization of a 
        targeted geographic area;
            (5) that maintains, through significant representation on 
        its governing board and otherwise, accountability to community 
        residents;
            (6) that has principals active in the implementation of its 
        programs who possess significant experience in lending and the 
        development of affordable housing, small business development, 
        or community revitalization;
            (7) that directly or through a subsidiary or affiliate 
        carries out development services; and
            (8) that will match any assistance received dollar-for-
        dollar with non-Federal sources of funds.
    (d) Selection Criteria.--The Secretary shall select eligible 
organizations from among applications submitted based on--
            (1) the capacity of the eligible organization to carry out 
        the purposes of this section;
            (2) the range and comprehensiveness of lending, investment 
        strategies, and development services to be offered by the 
        organization directly or through its subsidiaries and 
        affiliates;
            (3) the types of activities to be pursued, including 
        lending and development of small business, industrial, 
        commercial, or residential projects;
            (4) the extent of need in the targeted geographic area to 
        be served;
            (5) the experience and background of the principals at each 
        eligible organization responsible for carrying out the purposes 
        of this section;
            (6) the extent to which the eligible organization directly 
        or through subsidiaries and affiliates has successfully 
        implemented other revitalization activities;
            (7) an appropriate distribution of eligible organizations 
        among regions of the United States; and
            (8) other criteria determined to be appropriate by the 
        Secretary and consistent with the purposes of this section.
    (e) Eligible Activities.--Assistance under this section may only be 
used to support the following activities:
            (1) Increasing the capital available for the purpose of 
        making loans.
            (2) Providing funds for equity investments in projects.
            (3) Providing credit enhancement.
            (4) Marketing and management assistance.
            (5) Business planning and counseling services.
            (6) Other capacity building activities which enable 
        borrowers, prospective borrowers, or entities in which eligible 
        organizations have invested, or expect to invest, to improve 
        the likelihood of success of their activities.
            (7) Other activities that the Secretary deems appropriate.
    (f) Authorization.--There is authorized to be appropriated 
$20,000,000 for fiscal year 1994 to carry out this section.

                                 <all>

S 861 IS----2