[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6062 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 6062

To enhance community development investments by financial institutions, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 13, 2006

 Mr. Frank of Massachusetts (for himself and Mr. Oxley) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
To enhance community development investments by 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.

    This Act may be cited as the ``Community Development Investment 
Enhancements Act of 2006''.

SEC. 2. ENHANCING THE AUTHORITY FOR NATIONAL BANKS TO MAKE COMMUNITY 
              DEVELOPMENT INVESTMENTS.

    (a) National Banks.--The last sentence in the paragraph designated 
as the ``Eleventh.'' of section 5136 of the Revised Statutes of the 
United States (12 U.S.C. 24) is amended--
            (1) by striking ``10 percent'' each place such term appears 
        and inserting ``15 percent''; and
            (2) by adding at the end the following new sentence: ``The 
        preceding standards and limitations apply to each investment 
        under this paragraph made by a national bank directly and by 
        its subsidiaries.''.
    (b) State Member Banks.--The last sentence of the 23rd undesignated 
paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 338a) is 
amended--
            (1) by striking ``10 percent'' each place such term appears 
        and inserting ``15 percent''; and
            (2) by adding at the end the following new sentence: ``The 
        preceding standards and limitations apply to each investment 
        under this paragraph made by a State member bank directly and 
        by its subsidiaries.''.

SEC. 3. INVESTMENTS BY FEDERAL SAVINGS ASSOCIATIONS AUTHORIZED TO 
              PROMOTE THE PUBLIC WELFARE.

    (a) In General.--Section 5(c)(3) of the Home Owners' Loan Act (12 
U.S.C. 1464(c)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Direct investments to promote the public 
                welfare.--
                            ``(i) In general.--A Federal savings 
                        association may make investments designed 
                        primarily to promote the public welfare, 
                        including the welfare of low- and moderate-
                        income communities or families through the 
                        provision of housing, services, and jobs.
                            ``(ii) Direct investments or acquisition of 
                        interest in other companies.--Investments under 
                        clause (i) may be made directly or by 
                        purchasing interests in an entity primarily 
                        engaged in making such investments.
                            ``(iii) Prohibition on unlimited 
                        liability.--No investment may be made under 
                        this subparagraph which would subject a Federal 
                        savings association to unlimited liability to 
                        any person.
                            ``(iv) Single investment limitation to be 
                        established by director.--Subject to clauses 
                        (v) and (vi), the Director shall establish, by 
                        order or regulation, limits on--
                                    ``(I) the amount any savings 
                                association may invest in any 1 
                                project; and
                                    ``(II) the aggregate amount of 
                                investment of any savings association 
                                under this subparagraph.
                            ``(v) Flexible aggregate investment 
                        limitation.--The aggregate amount of 
                        investments of any savings association under 
                        this subparagraph may not exceed an amount 
                        equal to the sum of 5 percent of the savings 
                        association's capital stock actually paid in 
                        and unimpaired and 5 percent of the savings 
                        association's unimpaired surplus, unless--
                                    ``(I) the Director determines that 
                                the savings association is adequately 
                                capitalized; and
                                    ``(II) the Director determines, by 
                                order, that the aggregate amount of 
                                investments in a higher amount than the 
                                limit under this clause will pose no 
                                significant risk to the affected 
                                deposit insurance fund.
                            ``(vi) Maximum aggregate investment 
                        limitation.--Notwithstanding clause (v), the 
                        aggregate amount of investments of any savings 
                        association under this subparagraph may not 
                        exceed an amount equal to the sum of 15 percent 
                        of the savings association's capital stock 
                        actually paid in and unimpaired and 15 percent 
                        of the savings association's unimpaired 
                        surplus.
                            ``(vii) Investments not subject to other 
                        limitation on quality of investments.--No 
                        obligation a Federal savings association 
                        acquires or retains under this subparagraph 
                        shall be taken into account for purposes of the 
                        limitation contained in section 28(d) of the 
                        Federal Deposit Insurance Act on the 
                        acquisition and retention of any corporate debt 
                        security not of investment grade.
                            ``(viii) Applicability of standards to each 
                        investment.--The standards and limitations of 
                        this subparagraph shall apply to each 
                        investment under this subparagraph made by a 
                        savings association directly and by its 
                        subsidiaries.''.
    (b) Technical and Conforming Amendments.--Section 5(c)(3)(A) of the 
Home Owners' Loan Act (12 U.S.C. 1464(c)(3)(A)) is amended to read as 
follows:
                    ``(A) [Repealed]''.
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