I 111th CONGRESS 2d Session H. R. 4694 IN THE HOUSE OF REPRESENTATIVES February 25, 2010 Ms. Speier (for herself, Mr. Himes, Mr. Polis of Colorado, Mr. Gonzalez, Ms. Eshoo, Ms. Zoe Lofgren of California, Ms. Chu, Mr. Lynch, Mr. Hinojosa, Mr. Baca, Ms. Moore of Wisconsin, Mr. Perriello, Mr. Al Green of Texas, Ms. Clarke, and Mr. Moore of Kansas) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Community Development Banking and Financial Institutions Act of 1994 to provide financial assistance to community development financial institutions to help defray the costs of operating small dollar loan programs, and for other purposes.

1.

Short title

This Act may be cited as the Safe Affordable Small Dollar Loan Act of 2010.

2.

Grants to establish loan-loss reserve funds

The Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the following:

122.

Grants to establish loan-loss reserve funds

(a)

Purposes

The purposes of this section are to— (1)make financial assistance available from the Fund in order to help community development financial institutions defray the costs of operating small dollar loan programs, by providing the amounts necessary for such institutions to establish their own loan loss reserve funds to mitigate some of the losses on such small dollar loan programs; and (2)encourage community development financial institution to establish and maintain small dollar loan programs that would help give consumers access to mainstream financial institutions and combat payday lending. (b)

Grants

(1)

Loan-loss reserve fund grants

The Fund shall make grants to community development financial institutions or to any partnership between such community development financial institutions and any other federally insured depository institution with a primary mission to serve targeted investment areas, as such areas are defined under section 103(16), to enable such institutions or any partnership of such institutions to establish a loan-loss reserve fund in order to defray the costs of a small dollar loan program established or maintained by such institution. (2)

Matching requirement

A community development financial institution or any partnership of institutions established pursuant to paragraph (1) shall provide non-Federal matching funds in an amount equal to 50 percent of the amount of any grant received under this section. (3)

Use of funds

Any grant amounts received by a community development financial institutions or any partnership between or among such institutions under paragraph (1)— (A)may not be used by such institution to provide direct loans to consumers; (B)may be used by such institution to help recapture a portion or all of a defaulted loan made under the small dollar loan program of such institution; and (C)may be used to designate and utilize a fiscal agent for services normally provided by such an agent. (4)

Technical assistance grants

The Fund shall make technical assistance grants to community development financial institutions or any partnership between or among such institutions to support and maintain a small dollar loan program. Any grant amounts received under this paragraph may be used for technology, staff support, and other costs associated with establishing a small dollar loan program. (c)

Definitions

For purposes of this section, the following definitions shall apply: (1)

Consumer reporting agency that compiles and maintains files on consumers on a nationwide basis

The term consumer reporting agency that compiles and maintains files on consumers on a nationwide basis has the same meaning given such term in section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)). (2)

Small dollar loan program

The term small dollar loan program means a loan program under which a community development financial institution or any partnership between or among any such institutions offers loans to consumers that— (A)are made in amounts not exceeding $2,500; (B)must be repaid in installments; (C)have no pre-payment penalty; (D)the institution has to report payments regarding the loan to at least 1 of the consumer reporting agencies that compiles and maintains files on consumers on a nationwide basis; and (E)meet any other affordability requirements as may be established by the Administrator. (d)

Report to Congress

Before the end of the 1-year period beginning on the date of the enactment of the Safe Affordable Small Dollar Loan Act of 2010, and each year thereafter, the Administrator 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 a report describing— (1)the activities carried out by the Fund pursuant to this section; and (2)any measurable results, as appropriate and available, related to the achievement of the purposes of this section as described in subsection (a). (e)

Authorization of appropriations

(1)

Grant program

There are authorized to be appropriated for fiscal years 2010 through 2015 such sums as may be necessary to carry out the grant program established under this section. (2)

Administrative expenses

There is authorized to be appropriated to the Fund for each fiscal year beginning in fiscal year 2010, an amount equal to the amount of the administrative costs of the Fund for the operation of the grant program established under this section.

.