[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5113 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 5113

 To encourage initiatives for financial products and services that are 
 appropriate and accessible for millions of American small businesses 
          that do not have access to the financial mainstream.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 28, 2016

 Mrs. Carolyn B. Maloney of New York (for herself, Ms. Velazquez, Ms. 
 Hahn, Mr. Vargas, Mr. Rangel, Ms. Moore, Mr. Johnson of Georgia, Ms. 
   Clarke of New York, Mr. Hinojosa, Ms. Norton, Mr. Honda, and Mr. 
  Richmond) introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To encourage initiatives for financial products and services that are 
 appropriate and accessible for millions of American small businesses 
          that do not have access to the financial mainstream.

    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 ``Investing in America's Small 
Businesses Act of 2016''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Small businesses in underserved areas have for 
        generations been unable to access affordable credit.
            (2) A 2013 report commissioned by the U.S. Small Business 
        Administration shows the major constraint limiting the growth, 
        expansion, and wealth creation of small firms--especially 
        women- and minority-owned businesses--is inadequate capital.
            (3) Small businesses revitalize communities by creating 
        jobs, and also contribute to the local tax base, which helps 
        finance investments in schools, hospitals, infrastructure, and 
        public safety.
            (4) A 2015 report from the Carsey School of Public Policy 
        at the University of New Hampshire found that 79 percent of 
        CDFI loan volume went to borrowers from underserved 
        populations.
            (5) During the financial crisis, CDFI loan funds expanded 
        their activity to meet increased demand from borrowers that 
        could not access traditional lending. From 2006 to 2009, the 
        median fund deployment ratio grew 3.1 percent annually.
            (6) After Superstorm Sandy, CDFIs launched disaster 
        recovery loan programs and reached out to affected businesses 
        and organizations to provide credit to help grocery stores and 
        social service organizations re-open to help communities in 
        need.
            (7) A 2014 report by the Dardin School of Business at the 
        University of Virginia found that despite serving predominately 
        low-income markets, CDFI banks and credit unions had virtually 
        the same level of performance as mainstream financial 
        institutions.

SEC. 3. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS FOR SMALL BUSINESS 
              LENDING.

    (a) In General.--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:

``SEC. 123. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS FOR SMALL 
              BUSINESS LENDING.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to make financial assistance available from the Fund 
        in order to help community development financial institutions 
        defray the costs of operating small business 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 business loan programs;
            ``(2) to encourage community development financial 
        institutions to establish and maintain small business loan 
        programs that would help provide borrowers access to mainstream 
        financial institutions and combat high cost small business 
        lending; and
            ``(3) to encourage community development financial 
        institutions to expand the development services they offer and 
        to serve new investment areas and new targeted populations.
    ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--
                    ``(A) In general.--The Fund shall make grants to 
                community development financial institutions to enable 
                such institutions to establish a loan-loss reserve fund 
                in order to defray the costs of a small business loan 
                program established or maintained by such institution.
                    ``(B) Application.--A community development 
                financial institution that wishes to receive a grant 
                under this paragraph shall submit an application to the 
                Administrator in such form and manner and containing 
                such information as the Administrator may require.
                    ``(C) Matching requirement.--A community 
                development financial institution shall provide non-
                Federal matching funds in an amount equal to 50 percent 
                of the amount of any grant received under this 
                paragraph.
                    ``(D) Use of funds.--Any grant amounts received by 
                a community development financial institution under 
                this paragraph--
                            ``(i) may not be used by such institution 
                        to provide direct loans to small businesses;
                            ``(ii) may be used by such institution to 
                        help recapture a portion or all of a defaulted 
                        loan made under the small business loan program 
                        of such institution on or after the date of the 
                        enactment of this section; and
                            ``(iii) may be used to designate and 
                        utilize a fiscal agent for services normally 
                        provided by such an agent.
            ``(2) Technical assistance grants.--
                    ``(A) In general.--The Fund shall make technical 
                assistance grants to community development financial 
                institutions to create, support, or maintain a small 
                business loan program. Any grant amounts received under 
                this paragraph may be used for--
                            ``(i) technology, staff support, staff 
                        capacity building, and other costs associated 
                        with establishing, supporting, or maintaining a 
                        small business loan program; and
                            ``(ii) establishing, supporting, or 
                        maintaining technical assistance programs for 
                        borrowers.
                    ``(B) Application.--A community development 
                financial institution that wishes to receive a grant 
                under this paragraph shall submit an application to the 
                Administrator in such form and manner and containing 
                such information as the Administrator may require.
    ``(c) Reports.--For each fiscal year for which grants are made 
under this section, the Administrator shall submit a report to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
containing a description of the activities funded and amounts 
distributed under this section for such fiscal year, as well as 
measurable results of such actions.
    ``(d) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Fund $25,000,000 for each of fiscal years 2017 to 2022 
        to carry out this section.
            ``(2) Administrative costs.--There are authorized to be 
        appropriated to the Fund $2,000,000 for each of fiscal years 
        2017 to 2022 for the administrative costs of carrying out this 
        section.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Small business.--The term `small business' has the 
        meaning given the term `small business concern' under section 
        3(a) of the Small Business Act (15 U.S.C. 632(a)).
            ``(2) Small business loan program.--The term `small 
        business loan program' means a loan program wherein a community 
        development financial institution offers loans to small 
        businesses that--
                    ``(A) are made in amounts not exceeding $50,000;
                    ``(B) have no pre-payment penalty; and
                    ``(C) meet any other affordability requirements as 
                may be established by the Administrator.''.
    (b) Conforming Amendment.--The table of contents for the Riegle 
Community Development and Regulatory Improvement Act of 1994 is amended 
by inserting after the item relating to section 121 the following:

``Sec. 122. Grants to establish loan-loss reserve funds.
``Sec. 123. Grants to establish loan-loss reserve funds for small 
                            business lending.''.
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