[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1347 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1347

 To authorize demonstration project grants to entities to provide low-
                           cost, small loans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 30, 2005

   Mr. Akaka introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To authorize demonstration project grants to entities to provide low-
                           cost, small loans.

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

SECTION 1. GRANT PROGRAM FOR LOW-COST ALTERNATIVES TO PAYDAY LOANS.

    (a) Short Title.--This section may be cited as the ``Low-Cost 
Alternatives to Payday Loans Act''.
    (b) Definitions.--In this Act:
            (1) Community development financial institution.--The term 
        ``community development financial institution'' means any 
        organization that has been certified as a community development 
        financial institution pursuant to section 1805.201 of title 12, 
        Code of Federal Regulations.
            (2) Federally insured depository institution.--The term 
        ``federally insured depository institution'' means any insured 
        depository institution (as defined in section 3 of the Federal 
        Deposit Insurance Act (12 U.S.C. 1813)) or any insured credit 
        union (as defined in section 101 of the Federal Credit Union 
        Act (12 U.S.C. 1752)).
            (3) Payday loan.--The term ``payday loan'' means any 
        transaction in which a small cash advance is made to a consumer 
        in exchange for--
                    (A) the personal check or share draft of the 
                consumer, in the amount of the advance plus a fee, 
                where presentment or negotiation of such check or share 
                draft is deferred by agreement of the parties until a 
                designated future date; or
                    (B) the authorization of the consumer to debit the 
                transaction account or share draft account of the 
                consumer, in the amount of the advance plus a fee, 
                where such account will be debited on or after a 
                designated future date.
    (c) Establishment of Program.--The Secretary of the Treasury 
(referred to in this Act as the ``Secretary'') is authorized to award 
demonstration project grants (including multi-year grants) to eligible 
entities to provide low-cost, small loans to consumers that will 
provide alternatives to more costly, predatory payday loans.
    (d) Eligible Entities.--An entity is eligible to receive a grant 
under this Act if such an entity is--
            (1) an organization described in section 501(c)(3) of the 
        Internal Revenue Code of 1986 and exempt from tax under section 
        501(a) of such Code;
            (2) a federally insured depository institution;
            (3) a community development financial institution; or
            (4) a partnership comprised of 1 or more of the entities 
        described in paragraphs (1) through (3).
    (e) Application.--An eligible entity desiring a grant under this 
Act shall submit an application to the Secretary in such form and 
containing such information as the Secretary may require.
    (f) Terms and Conditions.--
            (1) Percentage rate.--For purposes of this Act, an eligible 
        entity that is a federally insured depository institution shall 
        be subject to the annual percentage rate promulgated by the 
        National Credit Union Administration's Loan Interest Rates 
        under part 701 of title 12, Code of Federal Regulations in 
        connection with a loan provided to a consumer pursuant to this 
        Act.
            (2) Financial literacy and education opportunities.--Each 
        eligible entity awarded a grant under this Act shall offer 
        financial literacy and education opportunities, such as 
        relevant counseling services or educational courses, to each 
        consumer provided with a loan pursuant to this Act.
    (g) Limitation on Administrative Costs.--Each eligible entity 
awarded a grant under this Act may use not more than 6 percent of the 
total amount of such grant in any fiscal year for the administrative 
costs of carrying out the programs funded by such grant in such fiscal 
year.
    (h) Evaluation and Report.--For each fiscal year in which a grant 
is awarded under this Act, the Secretary shall submit a report to 
Congress containing a description of the activities funded, amounts 
distributed, and measurable results, as appropriate and available.
    (i) Regulations.--The Secretary is authorized to promulgate 
regulations to implement and administer the grant program under this 
Act.
    (j) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary, for the grant program described in this 
Act, such sums as may be necessary, which shall remain available until 
expended.
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