[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6334 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6334

    To amend the Community Reinvestment Act of 1977 to improve the 
    assessments of regulated financial institutions, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2010

Mr. Gutierrez (for himself, Ms. Waters, Mr. Al Green of Texas, and Ms. 
 Eddie Bernice Johnson of Texas) introduced the following bill; which 
          was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Community Reinvestment Act of 1977 to improve the 
    assessments of regulated 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 ``American Community Investment Reform 
Act of 2010''.

SEC. 2. COMMUNITY REINVESTMENT ACT AMENDMENTS.

    (a) Findings and Purpose.--Section 802 of the Community 
Reinvestment Act of 1977 (12 U.S.C. 2901) is amended to read as 
follows:

``SEC. 802. FINDINGS AND PURPOSE.

    ``(a) Findings.--The Congress finds that--
            ``(1) regulated financial institutions are required by law 
        to demonstrate that they serve the convenience and needs of the 
        communities in which they are chartered or do business;
            ``(2) the convenience and needs of communities include the 
        need for credit services, deposit services, transaction 
        services, and community development loans and investments; and
            ``(3) regulated financial institutions have a continuing 
        and affirmative obligation to help meet the credit or other 
        financial needs of the local communities in which they are 
        chartered or do business.
    ``(b) Purpose.--It is the purpose of this title to require each 
appropriate Federal financial supervisory agency to use its authority 
when examining regulated financial institutions, to encourage such 
institutions to help meet the credit or other financial needs of the 
local communities in which they are chartered or do business consistent 
with the safe and sound operation of such institutions.''.
    (b) Definitions.--Section 803 of such Act (12 U.S.C. 2902) is 
amended to read as follows:

``SEC. 803. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Appropriate federal financial supervisory agency.--
        The term `appropriate Federal financial supervisory agency' 
        means--
                    ``(A) the appropriate Federal banking agency with 
                respect to depository institutions and depository 
                institution holding companies, as those terms are 
                defined under section 3 of the Federal Deposit 
                Insurance Act;
                    ``(B) the Securities and Exchange Commission with 
                regard to--
                            ``(i) any U.S. nonbank financial company 
                        for which the Securities and Exchange 
                        Commission acts as the primary financial 
                        regulatory agency pursuant to section 2 of the 
                        Dodd-Frank Wall Street Reform and Consumer 
                        Protection Act; and
                            ``(ii) any broker or dealer that is a 
                        member of the Securities Investor Protection 
                        Corporation;
                    ``(C) the Bureau of Consumer Financial Protection 
                with respect to any covered person supervised by the 
                Bureau pursuant to section 1024 of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act; and
                    ``(D) the Board of Governors of the Federal Reserve 
                System with respect to--
                            ``(i) securities holding companies, as 
                        defined under section 618 of the Dodd-Frank 
                        Wall Street Reform and Consumer Protection Act; 
                        and
                            ``(ii) in consultation with the primary 
                        financial regulatory agency (as such term is 
                        defined under section 2 of the Dodd-Frank Wall 
                        Street Reform and Consumer Protection Act), any 
                        regulated financial institution not described 
                        in subparagraph (A), (B), or (C) or clause (i).
            ``(2) Capital distribution.--The term `capital 
        distribution' means--
                    ``(A) a distribution of cash or other property by 
                any regulated financial institution to its owners made 
                on account of that ownership;
                    ``(B) a payment by a regulated financial 
                institution to repurchase, redeem, retire, or otherwise 
                acquire any of its shares or other ownership interests, 
                including any extension of credit to finance an 
                affiliated company's acquisition of those shares or 
                interests; and
                    ``(C) a transaction that the appropriate Federal 
                financial supervisory agency determines, by order or 
                regulation, to be in substance a distribution of 
                capital to the owners of the regulated financial 
                institution.
            ``(3) Community development.--The term `community 
        development' means--
                    ``(A) affordable housing for low- (including 
                extremely low-income) or moderate-income individuals 
                (including multifamily rental housing and properties 
                awarded low-income housing tax credits under section 
                42(h) of the Internal Revenue Code of 1986);
                    ``(B) community and financial services targeted to 
                low- or moderate-income individuals, including 
                appropriate electronic payments, basic account 
                activities, and successful mortgage or loan 
                modifications;
                    ``(C) activities that promote economic development 
                by financing businesses or farms that--
                            ``(i) meet the size eligibility 
                        requirements of the Small Business 
                        Administration's Development Company or the 
                        Small Business Investment Company programs 
                        under section 121.301 of title 13, Code of 
                        Federal Regulations; or
                            ``(ii) have gross annual revenues of 
                        $1,000,000 or less; or
                    ``(D) activities that revitalize or stabilize--
                            ``(i) low- or moderate-income geographies;
                            ``(ii) designated disaster areas;
                            ``(iii) distressed or underserved 
                        nonmetropolitan middle-income geographies 
                        designated by the Board of Governors of the 
                        Federal Reserve System, the Federal Deposit 
                        Insurance Corporation, and the Office of the 
                        Comptroller of the Currency, based on--
                                    ``(I) rates of poverty, 
                                unemployment, and population loss; or
                                    ``(II) population size, density, 
                                and dispersion, if such activities help 
                                to meet essential community needs, 
                                including needs of low- and moderate-
                                income individuals; or;
                            ``(iv) activities conducted by certified 
                        community development financial institutions 
                        (as such term is defined under section 103(5) 
                        of the Community Development Banking and 
                        Financial Institutions Act of 1994).
            ``(4) Regulated financial institution.--
                    ``(A) In general.--The term `regulated financial 
                institution' means an insured depository institution 
                (as defined under section 3 of the Federal Deposit 
                Insurance Act), a depository institution holding 
                company (as defined under section 3 of the Federal 
                Deposit Insurance Act), and a U.S. nonbank financial 
                company.
                    ``(B) Rule of construction.--The term `regulated 
                financial institution' does not include a credit union.
            ``(5) Application for a deposit facility.--The term 
        `application for a deposit facility' means an application to 
        the appropriate Federal financial supervisory agency otherwise 
        required under Federal law or regulations thereunder for--
                    ``(A) a charter for a national bank or Federal 
                savings and loan association;
                    ``(B) deposit insurance in connection with a newly 
                chartered State bank, savings bank, savings and loan 
                association or similar institution;
                    ``(C) the establishment of a domestic branch or 
                other facility with the ability to accept deposits of a 
                regulated financial institution;
                    ``(D) the relocation of the home office or a branch 
                office of a regulated financial institution;
                    ``(E) the merger or consolidation with, or the 
                acquisition of the assets, or the assumption of the 
                liabilities of a regulated financial institution 
                requiring approval under section 18(c) of the Federal 
                Deposit Insurance Act or under regulations issued under 
                the authority of title IV of the National Housing Act; 
                or
                    ``(F) the acquisition of shares in, or the assets 
                of, a regulated financial institution requiring 
                approval under section 3 of the Bank Holding Company 
                Act of 1956 or section 408(e) of the National Housing 
                Act.
            ``(6) U.S. nonbank financial company.--The term `U.S. 
        nonbank financial company' has the meaning given such term 
        under section 102 of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act.
            ``(7) Geography.--The term `geography' means a census tract 
        delineated by the United States Bureau of the Census in the 
        most recent decennial census.
            ``(8) Entire community.--With respect to a financial 
        institution whose business predominately consists of serving 
        the needs of military personnel who are not located within a 
        defined geographic area, such institution may define its 
        `entire community' to include its entire deposit customer base 
        without regard to geographic proximity.''.
    (c) Evaluations.--Section 804 of such Act (12 U.S.C. 2903) is 
amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (e) and (f), respectively;
            (2) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Depository Institutions and Depository Institution Holding 
Companies.--In connection with its examination of a regulated financial 
institution other than a U.S. nonbank financial company, the 
appropriate Federal financial supervisory agency shall do the 
following:
            ``(1) Assess the institution's record of meeting the credit 
        or other financial needs of its entire community, including 
        low-income, moderate-income, and other traditionally 
        underserved neighborhoods, consistent with the safe and sound 
        operation of such institution.
            ``(2) Assess, with at least an equal weight to any other 
        factor or test identified in the regulations prescribed by the 
        appropriate Federal financial supervisory agency to implement 
        this Act, the community development activities and those 
        activities' effectiveness in meeting the financial needs of an 
        institution's entire community, including low- and moderate-
        income neighborhoods, consistent with the safe and sound 
        operation of such institution.
            ``(3) Assess the following activities and those activities' 
        effectiveness in meeting the credit or other financial needs of 
        an institution's entire community, including low- and moderate-
        income neighborhoods, consistent with the safe and sound 
        operation of such institution, unless the appropriate Federal 
        financial supervisory agency determines that such assessment is 
        not appropriate for a given regulated financial institution or 
        class of regulated financial institutions because it engages in 
        limited activities or is of a limited size:
                    ``(A) Lending activities other than loans 
                considered under paragraph (1).
                    ``(B) Investment activities other than investments 
                considered under paragraph (1).
                    ``(C) Retail financial services other than 
                community development services considered under 
                paragraph (1).
            ``(4) Take such record into account in its evaluation of an 
        application for a deposit facility by such institution.
    ``(b) U.S. Nonbank Financial Companies.--The appropriate Federal 
financial supervisory agency shall assess the community development 
activities, including investments and loans where appropriate that 
benefit the community of the company, and those activities' 
effectiveness in meeting the credit or other financial needs of its 
entire community, including low-income, moderate-income, and other 
traditionally underserved neighborhoods, as appropriate for the given 
regulated financial institution consistent with the safe and sound 
operation of such company.
    ``(c) Requirements.--
            ``(1) In general.--In connection with its examination of a 
        regulated financial institution under subsection (a) or (b), 
        the appropriate Federal financial supervisory agency shall--
                    ``(A) take into consideration public comment 
                received by the appropriate Federal financial 
                supervisory agency regarding the institution's record 
                of meeting the credit or other financial needs of its 
                entire community, including low-income, moderate-
                income, and other traditionally underserved 
                neighborhoods; and
                    ``(B) require an improvement plan for an 
                institution that receives a `Needs to improve record of 
                meeting community credit or other financial needs' or a 
                `Substantial noncompliance in meeting community credit 
                or other financial needs' rating on the institution's 
                written evaluation, or such a rating in any individual 
                assessment area, and require such improvement plan to 
                result in the reasonable likelihood that the 
                institution will obtain a rating of at least 
                `Satisfactory record of meeting community credit or 
                other financial needs' in the relevant measure within 2 
                exam cycles.
            ``(2) Improvement plan.--
                    ``(A) In general.--A regulated financial 
                institution required to submit an improvement plan 
                required under paragraph (1)(B) shall submit such plan 
                in writing to the appropriate Federal financial 
                supervisory agency no later than 60 days after 
                receiving the notice that such plan will be required.
                    ``(B) Public comment.--Upon receipt of an 
                improvement plan required under paragraph (1)(B), the 
                appropriate Federal financial supervisory agency 
                shall--
                            ``(i) make the plan available to the public 
                        for review and comment for a period of no less 
                        than 30 days; and
                            ``(ii) require the regulated financial 
                        institution to revise, as appropriate, the 
                        improvement plan in response to the public 
                        comments received under the public review and 
                        comment period described under clause (i) and 
                        submit such plan to the appropriate Federal 
                        financial supervisory agency no later than 30 
                        days after the end of such period.
            ``(3) Limitation.--Public comment received pursuant to 
        paragraph (2)(B) shall be limited to comments that directly 
        address the regulated financial institution's record of meeting 
        the credit or other financial needs of the entire community, 
        including low-income, moderate-income, and other traditionally 
        underserved neighborhoods.
    ``(d) Nonminority Owned and Non-CDFI Institution Investments.--In 
assessing and taking into account, under subsections (a), (b), and (c), 
the record of a regulated financial institution that is a nonminority-
owned, nonwomen-owned institution and that is not a certified community 
development financial institution, the appropriate Federal financial 
supervisory agency may consider as a factor capital investment, loan 
participation, and other ventures undertaken by the regulated financial 
institution in cooperation with certified community development 
financial institutions, minority- and women-owned financial 
institutions, and low-income credit unions, provided that these 
activities help meet the credit or other financial needs of local 
communities in which such institutions and credit unions operate, 
including communities other than where such institutions and credit 
unions operate, if the regulated financial institution has adequately 
met the needs of its local assessment area.'';
            (3) by adding at the end the following new subsections:
    ``(g) Complex and Innovative Efforts.--In assessing and taking into 
account, under subsection (a), the record of a regulated financial 
institution, the appropriate Federal financial supervisory agency shall 
consider, as a factor, the complexity, innovativeness, effectiveness in 
meeting particularly difficult community needs, or significant effort 
extended in specific loans, investments, or services.
    ``(h) Rule of Construction.--An evaluation of a depository 
institution holding company shall incorporate evaluations of subsidiary 
regulated financial institutions made by each subsidiary's appropriate 
Federal financial supervisory agency, if applicable.''.
    (d) Written Evaluations.--Section 807 of such Act (12 U.S.C. 2906) 
is amended--
            (1) in subsection (a)--
                    (A) by striking ``an insured depository 
                institution'' and inserting ``a regulated financial 
                institution''; and
                    (B) by inserting ``or financial'' after ``credit'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in clause (ii), by striking 
                                ``and'' at the end;
                                    (II) by redesignating clause (iii) 
                                as clause (v); and
                                    (III) by inserting after clause 
                                (ii) the following new clauses:
                            ``(iii) disclose whether the institution 
                        provided, or offered to provide, a consumer 
                        financial product that the Bureau of Consumer 
                        Financial Protection has determined is unfair, 
                        deceptive, or abusive;
                            ``(iv) include specific responses to public 
                        comments received by the Federal financial 
                        supervisory agency regarding the institution; 
                        and''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(C) Treatment with respect to unfair, deceptive, 
                or abusive consumer financial products.--If the 
                regulated financial institution provided, or offered to 
                provide, one or more consumer financial products that 
                the Bureau of Consumer Financial Protection has 
                determined is unfair, deceptive, or abusive, the 
                written evaluation shall be negatively influenced in a 
                manner commensurate with the extent to which such 
                product or products were offered or provided.'';
                    (B) in paragraph (2)--
                            (i) by striking ``paragraph (1)(C)'' and 
                        inserting ``paragraph (1)(A)(v)''; and
                            (ii) by striking subparagraphs (A), (B), 
                        (C), and (D) and inserting the following:
                    ``(A) `Satisfactory record of meeting community 
                credit or other financial needs'.
                    ``(B) `Sufficient record of meeting community 
                credit or other financial needs'.
                    ``(C) `Needs to improve record of meeting community 
                credit or other financial needs'.
                    ``(D) `Substantial noncompliance in meeting 
                community credit or other financial needs'.''; and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) Application for outstanding rating.--
                    ``(A) In general.--The appropriate Federal 
                financial supervisory agencies shall develop and 
                implement a process to permit a regulated financial 
                institution to submit an application at the time the 
                examination process is initiated for a rating of 
                `Outstanding record of meeting community credit or 
                other financial needs'.
                    ``(B) Availability of rating.--
                            ``(i) In general.--The rating described 
                        under subparagraph (A) shall only be awarded to 
                        a regulated financial institution that--
                                    ``(I) applies for such rating 
                                pursuant to subparagraph (A);
                                    ``(II) significantly exceeds the 
                                requirements to receive the rating 
                                described under paragraph (2)(A);
                                    ``(III) with respect to a regulated 
                                financial institution for which ratings 
                                are available for the three most recent 
                                examination cycles, received no less 
                                than a `Satisfactory record of meeting 
                                community credit or other financial 
                                needs' or, for evaluations prior to the 
                                date of the enactment of the American 
                                Community Investment Reform Act of 
                                2010, `Satisfactory record of meeting 
                                community credit needs', for the three 
                                most recent examination cycles; and
                                    ``(IV) with respect to a depository 
                                institution holding company or a 
                                regulated financial institution that 
                                controls one or more other regulated 
                                financial institutions, does not have a 
                                subsidiary regulated financial 
                                institution that received a rating of 
                                `Needs to improve record of meeting 
                                community credit or other financial 
                                needs' or less, or, for evaluations 
                                prior to the date of enactment of the 
                                American Community Investment Reform 
                                Act of 2010, a rating of `Needs to 
                                improve record of meeting community 
                                credit needs' or lower for the most 
                                recent examination cycle.
                            ``(ii) Rule of construction.--For purposes 
                        of clause (i)(IV), a rating given to a 
                        regulated financial institution prior to the 
                        control of such regulated financial institution 
                        by the relevant depository institution holding 
                        company or parent regulated financial 
                        institution as a subsidiary shall not bar the 
                        company from being granted a rating of 
                        `Outstanding record of meeting community credit 
                        or other financial needs'.
                    ``(C) Expanded assessment area.--For purposes of 
                determining whether to award a rating described under 
                subparagraph (A), the appropriate Federal financial 
                supervisory agency may consider community development 
                activities, including investments made outside the 
                institution's service area if the regulated financial 
                institution has adequately met the needs of its local 
                assessment area.'';
            (3) by redesignating subsections (d) and (e) as subsections 
        (f) and (g), respectively; and
            (4) by inserting after subsection (c) the following new 
        subsections:
    ``(d) Preliminary Report Required.--
            ``(1) In general.--The appropriate Federal financial 
        supervisory agency shall--
                    ``(A) prepare a preliminary report of the public 
                section of the evaluation required under paragraph 
                (a)(1); and
                    ``(B) provide the preliminary report to the 
                regulated financial institution and to the public not 
                less than 60 days before the date on which the 
                corresponding written evaluation is issued.
            ``(2) Limitation.--The preliminary report required under 
        paragraph (1) shall not include any assigned rating or 
        discussion of an assigned rating.
    ``(e) Public Comment on Preliminary Report.--The appropriate 
Federal financial supervisory agency shall--
            ``(1) develop and implement a process to seek and receive 
        public comment on any preliminary report for a period of 30 
        days following the release of the report; and
            ``(2) incorporate into a revised written evaluation any 
        public comment received during such comment period, as 
        appropriate.''.
    (e) Effects of Assigned Ratings.--Such Act is amended by adding at 
the end the following new section:

``SEC. 810. EFFECTS OF ASSIGNED RATINGS.

    ``(a) Outstanding Rating.--A regulated financial institution that 
receives a rating of `outstanding record of meeting community credit or 
other financial needs' on its most recent performance evaluation 
shall--
            ``(1) be presumed to have satisfied consideration of such 
        regulated financial institution's record of meeting the credit 
        or other financial needs of its entire community in an 
        application for a deposit facility; and
            ``(2) be given preference over other regulated financial 
        institutions with lower ratings in connection with the award of 
        Government contracts.
    ``(b) Satisfactory Rating.--There shall be a rebuttable presumption 
that a regulated financial institution that receives a rating of 
`satisfactory record of meeting community credit or other financial 
needs' on its two most recent performance evaluations will have 
satisfied consideration of such regulated financial institution's 
record of meeting the credit or other financial needs of its entire 
community in an application for a deposit facility.
    ``(c) Needs To Improve Rating.--A regulated financial institution 
that receives a rating of `needs to improve record of meeting community 
credit or other financial needs' or lower on its two most recent 
performance evaluations shall be prohibited from--
            ``(1) being awarded a Government contract in an amount 
        greater than $500,000, unless such Federal department or agency 
        proposing to enter into such contract determines that 
        compliance with such prohibition imposes an undue burden or is 
        unable to meet its needs with another institution; and
            ``(2) making any capital distributions in the aggregate 
        during any calendar quarter that exceed 50 percent of its net 
        earnings during the previous quarter without the prior approval 
        of its appropriate Federal financial supervisory agency.
    ``(d) Substantial Noncompliance.--A regulated financial institution 
that receives a `substantial noncompliance in meeting community credit 
or other financial needs' rating on its most recent performance 
evaluations--
            ``(1) may be ordered to restrict executive compensation by 
        its appropriate Federal financial supervisory agency;
            ``(2) shall be prohibited from being awarded a Government 
        contract, unless such Federal department or agency proposing to 
        enter into such contract determines that compliance with such 
        prohibition imposes an undue burden or is unable to meet its 
        needs with another institution; and
            ``(3) shall be prohibited from making any capital 
        distributions without the prior approval of its appropriate 
        Federal financial supervisory agency.''.
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