[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8721 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 8721

  To provide for the Federal charter of certain public banks, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 30, 2020

 Ms. Tlaib (for herself, Ms. Ocasio-Cortez, Ms. Pressley, Ms. Jayapal, 
    Ms. Omar, Mr. Green of Texas, Mr. Thompson of Mississippi, Mr. 
 Blumenauer, Ms. Lee of California, and Ms. Schakowsky) introduced the 
   following bill; which was referred to the Committee on Financial 
Services, and in addition to the Committee on Oversight and Reform, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  To provide for the Federal charter of certain public banks, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Public Banking Act 
of 2020''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
              TITLE I--FEDERAL RECOGNITION OF PUBLIC BANKS

Sec. 101. Federal charter of public lending banks and public payment 
                            banks.
Sec. 102. Federal recognition of non-federally chartered banks.
Sec. 103. Federal Reserve System membership.
Sec. 104. Public member bank services.
Sec. 105. Specific requirements relating to covered banks.
Sec. 106. Regulations.
Sec. 107. Technical assistance.
           TITLE II--FEDERAL RECOGNITION OF PUBLIC SECURITIES

Sec. 201. Regulation of public lending banks and non-federally 
                            chartered banks.
                  TITLE III--PUBLIC DEPOSIT INSURANCE

Sec. 301. In general.
                        TITLE IV--POSTAL BANKING

Sec. 401. Partnerships with covered banks for postal banking services.
               TITLE V--PUBLIC BANK DEVELOPMENT PROGRAMS

Sec. 501. Public bank grant program.
Sec. 502. Public bank incubator program.
Sec. 503. Community development grant program.
Sec. 504. Treatment of funding.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Board of governors.--The term ``Board of Governors'' 
        means the Board of Governors of the Federal Reserve System.
            (2) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (3) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (4) Covered bank.--The term ``covered bank'' means--
                    (A) a public lending bank (as defined in section 
                101(b));
                    (B) a public payment bank (as defined in section 
                101(c)); and
                    (C) a non-federally chartered bank (as defined in 
                section 102(b)) that obtains a certificate of Federal 
                recognition under section 102.
            (5) Public member bank.--The term ``public member bank'' 
        means a covered bank that is a member of the Federal Reserve 
        System.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (7) State.--The term ``State'' means each of the several 
        States, the District of Columbia, and any commonwealth, 
        territory, or possession of the United States.

              TITLE I--FEDERAL RECOGNITION OF PUBLIC BANKS

SEC. 101. FEDERAL CHARTER OF PUBLIC LENDING BANKS AND PUBLIC PAYMENT 
              BANKS.

    (a) In General.--The Board of Governors shall charter public 
lending banks and public payment banks.
    (b) Public Lending Bank Defined.--The term ``public lending bank'' 
means a person that--
            (1) is wholly owned and controlled by--
                    (A) a State or Tribal government, including a unit 
                of local government, government agency;
                    (B) a State or Tribally chartered corporation;
                    (C) a nonprofit instrumentality designated by a 
                State or Tribal government as acting in the public 
                interest of a community within such State or Tribe, 
                including an unincorporated community; or
                    (D) an association of 1 or more entities described 
                in subparagraphs (A) through (C);
            (2) that--
                    (A) is not owned or governed by, operated as a 
                subsidiary of, or otherwise affiliated with any for-
                profit entity;
                    (B) does not own, govern, or operate as a 
                subsidiary of any for-profit entity; and
                    (C) does not compensate any employee, executive, or 
                board member at a rate to exceed the salary of the 
                President of the United States for that equivalent 
                period; and
            (3) provides--
                    (A) fiscal agent services;
                    (B) money transmitter services;
                    (C) digital dollar services as a pass-through 
                intermediary for the Federal Government;
                    (D) depository services;
                    (E) postal banking services;
                    (F) securities-related services; or
                    (G) any lending product approved by the Board of 
                Governors.
    (c) Public Payment Bank Defined.--The term ``public payment bank'' 
means a person that--
            (1) is wholly owned and controlled by an entity described 
        in subsection (b)(1);
            (2) provides at least one of the services specified in 
        subparagraphs (A) through (E) of subsection (b)(2); and
            (3) does not provide the services specified in subparagraph 
        (F) or (G) of subsection (b)(2).
    (d) Exception of Certain Public Lending Banks From Consideration as 
Bank Holding Company.--A person described in subsection (b) shall not 
be considered a bank holding company under the Bank Holding Company Act 
of 1956 (12 U.S.C. 1841 et seq.) or any other law, solely due to the 
person's ownership or control of a public lending bank, public payment 
bank, or non-federally chartered bank.
    (e) Guidance With Respect to Excluded and Marginalized Groups.--The 
Board of Governors shall issue guidance to public lending banks and 
public payment banks to ensure that the services provided by such banks 
are universal and comprehensively include historically excluded and 
marginalized groups.

SEC. 102. FEDERAL RECOGNITION OF NON-FEDERALLY CHARTERED BANKS.

    (a) Certificates of Recognition.--The Board of Governors shall 
issue certificates of Federal recognition to non-federally chartered 
banks.
    (b) Non-Federally Chartered Bank Defined.--The term ``non-federally 
chartered bank'' means a person that is--
            (1) wholly owned and controlled by an entity described in 
        section 101(b)(1); and
            (2) either--
                    (A) chartered as a non-depository institution by an 
                approved non-Federal financial regulator described in 
                subsection (c); or
                    (B) insured as a depository institution by the 
                Corporation, or under an alternate public deposit 
                insurance scheme approved by the Corporation.
    (c) List of Approved Non-Federal Financial Regulators.--The Board 
of Governors shall establish and maintain on a public website of the 
Board of Governors a list of approved non-Federal financial regulators 
for the purpose of determining eligibility for a certificate of Federal 
recognition under this section.
    (d) Conversion.--At the request of a non-federally chartered bank, 
the Board of Governors may convert such bank into a public payment bank 
or a public lending bank.
    (e) Services.--A non-federally chartered bank--
            (1) may not offer depository services before--
                    (A) obtaining--
                            (i) deposit insurance or conditional 
                        deposit insurance from the Corporation; or
                            (ii) deposit insurance from alternate 
                        public deposit insurance scheme approved by the 
                        Corporation; and
                    (B) becoming a public member bank or a conditional 
                public member in accordance with section 103(b); and
            (2) may--
                    (A) invest any funds held on behalf of an entity 
                described in section 101(b)(1) in a fiscal agent 
                account;
                    (B) provide fiscal agent services, including 
                sending and receiving money and effectuating payments 
                to and from any entity whose funds are invested in a 
                fiscal agent account;
                    (C) invest any funds held on behalf of an entity 
                not described in section 101(b)(1) in a payments 
                account or as digital dollar products; and
                    (D) provide money transmitter and digital dollar 
                services.
    (f) Guidance With Respect to Excluded and Marginalized Groups.--Not 
later than 1 year after the date of the enactment of this Act, the 
Board of Governors shall issue guidance to non-federally chartered 
banks to ensure that the services provided by such banks are universal 
and comprehensively include historically excluded and marginalized 
groups.

SEC. 103. FEDERAL RESERVE SYSTEM MEMBERSHIP.

    (a) Eligibility.--A covered bank shall be eligible for membership 
in the Federal Reserve System as a public member bank and, except as 
provided in subsection (c), shall be treated in the same manner as a 
member bank under section 4 of the Federal Reserve Act (12 U.S.C. 308).
    (b) Conditional Public Member Bank.--The Board of Governors shall 
establish a special category of public member bank, called a 
``conditional public member bank'', for persons that are in the process 
of applying for becoming a covered bank. Such conditional public member 
banks shall be subject to such conditions and restrictions as the Board 
of Governors determines to be necessary and appropriate to promote 
public welfare, provided that such conditions and restrictions are not 
arbitrary, punitive, or unduly burdensome.
    (c) Purchasing Stock.--The Board of Governors may not require a 
covered bank to purchase stock in a Federal Reserve Bank or otherwise 
maintain paid-in capital in the Federal Reserve System.

SEC. 104. PUBLIC MEMBER BANK SERVICES.

    (a) Purposes of Services.--The Board of Governors shall offer the 
services described in subsection (b) to public member banks in order 
to--
            (1) promote the safety, soundness, viability, and 
        resiliency of publicly owned and operated financial 
        institutions;
            (2) facilitate the provision of payments, credit, and other 
        financial services as a public good; and
            (3) support the financial and budgetary health of State and 
        Tribal governments, local government units, government 
        agencies, State or tribally chartered corporations, nonprofit 
        entities designated by a State or Tribal government to be 
        acting in the public interest of a community within such State 
        or Tribe, or an association of one or more of such entities.
    (b) Services.--The Board of Governors shall offer the following 
services to public member banks:
            (1) Fiscal agent accounts--
                    (A) in which public member banks may invest funds 
                held on behalf of any entity described in section 
                101(b)(1); and
                    (B) under which--
                            (i) the Board of Governors shall pay 
                        interest on all balances held overnight in such 
                        fiscal agent accounts at a rate that is greater 
                        than or equal to the greater of--
                                    (I) the sum of the overnight policy 
                                target rate plus two percent; or
                                    (II) the daily rate on 30-year 
                                marketable Treasury bonds; and
                            (ii) the interest described in clause (i) 
                        (minus a reasonable administrative fee imposed 
                        by the public member bank) shall be paid to the 
                        entity for which the public member bank 
                        invested such funds.
            (2) Payment accounts--
                    (A) in which public member banks may invest funds 
                held on behalf of any entity other than an entity 
                described in section 101(b)(1) for purposes of 
                providing money transmitter services; and
                    (B) under which the Board of Governors shall pay 
                interest (minus a reasonable administrative fee) on all 
                balances held overnight in such fiscal agent accounts 
                at a rate that is greater than or equal to the greater 
                of the following:
                            (i) The overnight rate paid on required 
                        reserves.
                            (ii) The overnight night paid on excess 
                        reserves.
            (3)(A) Digital dollar services in which public member banks 
        may operate as pass-through intermediaries for any digital 
        dollar or other financial services offered by the Federal 
        Government, including--
                            (i) digital dollar account wallets 
                        administered by the Board of Governors 
                        (commonly known as ``FedAccounts'');
                            (ii) digital dollar cash wallets 
                        administered by the Secretary (commonly known 
                        as ``eCash''); and
                            (iii) postal banking services provided by 
                        the United States Postal Service.
            (B) The Board of Governors may issue regulations as 
        necessary to ensure effective harmonization and coordination 
        between covered banks and any entities responsible for 
        administering digital dollar services on behalf of the Federal 
        Government.
            (4)(A) A facility (to be known as the ``Public Bank Primary 
        Liquidity Facility'') to provide liquidity to public member 
        banks by buying or lending (at a reasonable rate of interest 
        that is not greater than the overnight policy target rate) 
        against federally recognized public loans (as described in 
        section 105) and federally-recognized public securities (as 
        described in section 201(b)), under terms and conditions that 
        the Board of Governors determines to be necessary and 
        appropriate to promote public welfare.
            (B) The facility under subparagraph (A) shall purchase or 
        accept loans or securities under such subparagraph at face 
        value.
            (5)(A) A facility (to be known as the ``Public Bank 
        Supplementary Liquidity Facility'') to provide liquidity to 
        public member banks by buying or lending (at a reasonable rate 
        of interest that is not greater than the overnight policy 
        target rate) against assets not otherwise eligible to be 
        purchased or accepted as collateral under paragraph (4).
            (B) The facility under subparagraph (A) may purchase or 
        accept assets as collateral under such subparagraph at a 
        reasonable discount.
            (6) A facility (to be known as the ``Public Bank Credit 
        Facility'') to provide credit to public member banks on an 
        unsecured basis, in such amounts and such rates of interests as 
        the Board of Governors determines to be necessary and 
        appropriate to promote public welfare.
            (7) A facility (to be known as the ``Federally Recognized 
        Public Loan Facility'') to, in consultation with the 
        Corporation--
                    (A) develop rules, standards, and criteria for 
                Federal recognition of loans, mortgages, credit cards, 
                account overdrafts, and other direct lending products 
                issued by public member banks; and
                    (B) provide prepurchase agreements under which the 
                facility will purchase loans and agree that such loans 
                will be repurchased by the public member bank at such 
                time as is agreed upon by such facility and member 
                bank.
    (c) Administrative, Operating, and Maintenance Costs.--The Board of 
Governors shall pay all administrative, operating, and maintenance 
costs associated with the accounts, services, and facilities described 
in subsection (b).
    (d) Reimbursement.--The Board of Governors shall reimburse a public 
member bank for any expenses reasonably incurred in the process of 
operating as a pass-through intermediary described in subsection 
(b)(3).
    (e) Expenses.--
            (1) Member services.--Any expenses incurred by the Board of 
        Governors under paragraphs (1) through (3) of subsection (b) 
        and under subsections (c) and (d) shall be recorded--
                    (A) in an account to be known as the ``Special 
                Public Member Bank Services Account'' established at 
                the Federal Reserve Bank of New York; and
                    (B) as a deferred asset (as described in section 
                11.96 of the Financial Accounting Manual for Federal 
                Reserve Banks, as in effect on the date of the 
                enactment of this Act) and maintained separately from 
                the balance sheet of the Federal Reserve Bank of New 
                York and the Federal Reserve System, so as to not 
                reduce or impact the calculation of total income or 
                revenue generated by the Federal Reserve System, or 
                otherwise reduce the total amount of net operating 
                profits to be made available for remittance to the 
                Treasury on an ongoing basis.
            (2) Facilities.--Any expenses incurred by the Board of 
        Governors under paragraphs (4) through (7) of subsection (b) 
        shall be recorded--
                    (A) in an account to be known as the ``Special 
                Public Member Bank Liquidity and Credit Account'' 
                established at the Federal Reserve Bank of New York; 
                and
                    (B) as a deferred asset (as described in section 
                11.96 of the Financial Accounting Manual for Federal 
                Reserve Banks, as in effect on the date of the 
                enactment of this Act) and maintained separately from 
                the balance sheet of the Federal Reserve Bank of New 
                York and the Federal Reserve System, so as to not 
                reduce or impact the calculation of total income or 
                revenue generated by the Federal Reserve System, or 
                otherwise reduce the total amount of net operating 
                profits to be made available for remittance to the 
                Treasury on an ongoing basis.

SEC. 105. SPECIFIC REQUIREMENTS RELATING TO COVERED BANKS.

    (a) Terms of Retail Account Services.--Any covered bank that holds, 
administers, or manages funds on behalf of any unincorporated person in 
a payments account, or otherwise accepts funds on deposit or for the 
purpose of providing public depository accounts services--
            (1) may not--
                    (A) impose any fees, minimum balances, or maximum 
                balances on such payments accounts or public depository 
                accounts; or
                    (B) include on such payments accounts or public 
                depository accounts;
            (2) shall--
                    (A) prominently brand any such payments account or 
                public depository account as a ``public bank account'' 
                in all account statements, marketing materials, and 
                other communications of the public bank; and
                    (B) provide such account holders with reasonable 
                protection against losses caused by fraud or security 
                breaches, as determined by the Corporation or the 
                Director of the Bureau of Consumer Financial 
                Protection, or both; and
            (3) may only close or restrict access to such payments 
        accounts or public depository accounts on the basis of the 
        mandate of the covered bank.
    (b) Terms of Retail Credit.--
            (1) In general.--Notwithstanding any provision of law, the 
        annual percentage rate applicable to any extension of credit by 
        a covered bank may not exceed the lesser of--
                    (A) 15 percent on unpaid balances, inclusive of all 
                finance charges; or
                    (B) the maximum rate permitted by the laws of the 
                State in which the consumer resides.
            (2) Other fees.--Any fees that are not considered finance 
        charges under paragraph (1), including fees for ancillary 
        products and services, may not--
                    (A) exceed the total amount of finance charges 
                assessed; and
                    (B) be imposed in such a way as to evade or 
                frustrate the purpose of limiting the total interest 
                and related costs that may be charged in relation to 
                any lending product issued by covered banks under this 
                Act.
            (3) Penalties for charging higher rates on retail credit.--
                    (A) Violation.--The taking, receiving, reserving, 
                or charging of an annual percentage rate or fee greater 
                than that permitted by paragraph (1), when knowingly 
                done, shall be a violation of this subsection, and a 
                forfeiture of the entire interest which the note, bill, 
                or other evidence of the obligation carries with it, or 
                which has been agreed to be paid thereon.
                    (B) Refund of interest amounts.--
                            (i) In general.--With respect to a person 
                        charging interest, a finance charge, or a fee 
                        greater than that permitted by paragraph (1), 
                        the person paying such interest, finance 
                        charge, or fee may notify the Bureau of 
                        Consumer Financial Protection, and the Bureau 
                        of Consumer Financial Protection shall take 
                        such enforcement actions as the Director of the 
                        Bureau of Consumer Financial Protection 
                        determines appropriate.
                            (ii) Lack of bureau action.--If a person 
                        notifies the Bureau of Consumer Financial 
                        Protection under clause (i), and the Bureau of 
                        Consumer Financial Protection takes no action 
                        with respect to such notice during the 60-day 
                        period following such notice, such person may 
                        bring an action in a Federal district court to 
                        recover the entire amount of interest, finance 
                        charges, or fees paid.
                    (C) Civil liability.--Any creditor who violates 
                this subsection shall be subject to the provisions of 
                section 130(a) of the Truth in Lending Act (15 U.S.C. 
                1640(a)).
                    (D) Bank secrecy act.--In establishing and 
                maintaining personal accounts, each covered bank shall 
                comply with--
                            (i) section 21 of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1829b);
                            (ii) section 123 of Public Law 91-508; and
                            (iii) subchapter II of chapter 53 of title 
                        31, United States Code.
    (c) Annual Reporting Requirements.--Each covered bank shall make 
publicly available an annual report on the activities of such covered 
bank, including recipients of financial services, sources of funding, 
financial reporting, and evaluation of the effectiveness of the covered 
bank's services in achieving the public purposes for which it was 
chartered, as well as any other purposes, goals, and targets under this 
Act or other law or regulation.

SEC. 106. REGULATIONS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Board of Governors, the Director of the 
Bureau of Consumer Financial Protection, and the Corporation shall 
jointly--
            (1) establish a separate regulatory scheme with respect to 
        public lending banks, public payment banks, and non-federally 
        chartered banks that receive or are in the process of receiving 
        a certificate of Federal recognition under section 102; and
            (2) after a notice and comment period during which consumer 
        advocacy organizations shall be invited to submit feedback and 
        suggestions, and issue such regulations as are necessary and 
        appropriate to promote public welfare with respect to public 
        lending banks, public payment banks, and non-federally 
        chartered banks that receive or are in the process of receiving 
        a certificate of Federal recognition under section 102.
    (b) Regulations With Respect to Excluded and Marginalized Groups.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act, the Board of Governors shall issue 
        regulations for public lending banks and public payment banks 
        to ensure that the services provided by such banks are 
        universal and comprehensively include historically excluded and 
        marginalized groups.
            (2) Limitations.--A regulation issued under this subsection 
        may not--
                    (A) supersede or supplant any other stronger 
                regulations or standards promulgated by other Federal 
                or applicable State regulatory entities, including any 
                such regulation issued by the Corporation or the 
                Director of the Bureau of Consumer Financial 
                Protection; and
                    (B) result in less robust or less stringent 
                protections to consumers than protections that exist on 
                the date of the enactment of this Act for consumers 
                served by other existing categories of depository 
                institutions, including protection under the Community 
                Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.).
            (3) Data reporting.--The Board of Governors and the 
        Corporation shall jointly, in a manner that respects the 
        privacy of covered bank customers to the greatest extent 
        possible, develop an annual assessment for determining if 
        covered banks have appropriately provided services to all 
        customers within the jurisdiction of service, based on 
        demographic information chosen by regulators, including race, 
        gender, and area median income of such customers.
    (c) Ecological Sustainability Considerations and Prohibitions on 
Fossil Fuel Investment.--
            (1) In general.--The Board of Governors, the Corporation, 
        and the Commission shall jointly develop and promulgate rules 
        and regulations to--
                    (A) ensure that any and all activities undertaken 
                and services offered by a covered bank, or any person 
                seeking or in the process of becoming a covered bank, 
                are consistent with Federal and scientifically 
                established standards, goals, and targets with respect 
                to ecological sustainability, climate crisis-
                mitigation, and decarbonization; and
                    (B) require that any covered bank or person seeking 
                or in the process of becoming a covered bank, may not 
                facilitate fossil fuel production or infrastructure, 
                including by--
                            (i) providing loans to, making investments 
                        in, or otherwise engaging in any activity that 
                        is financial in nature, or incidental to such 
                        financial activity, with a fossil fuel company;
                            (ii) providing loans to, making investments 
                        in, or otherwise engaging in any activity that 
                        is financial in nature, or incidental to such 
                        financial activity, for a fossil fuel project;
                            (iii) taking compensation to arrange or 
                        facilitate a transaction that provides funds 
                        for fossil fuel production from new sources;
                            (iv) securitizing assets that provide funds 
                        for fossil fuel production from new sources;
                            (v) entering into a derivatives transaction 
                        designed to provide funding for, facilitate, or 
                        hedge risks from fossil fuel production from 
                        new sources; and
                            (vi) engaging in any activity that is 
                        complementary to a financial activity involving 
                        fossil fuel production from new sources, 
                        including financing the international trade 
                        thereof; or any other form of activity defined 
                        by regulators or supervisors of the covered 
                        bank.
            (2) Definitions.--In this subsection:
                    (A) Fossil fuel.--The term ``fossil fuel'' means 
                coal, petroleum, natural gas, or any derivative of 
                coal, petroleum, or natural gas that is used for fuel.
                    (B) Fossil infrastructure.--The term ``fossil 
                infrastructure'' means fossil fuel-related projects, 
                including wells, rail infrastructure, pipelines, 
                terminals, refineries, and power plants.
                    (C) New sources.--The term ``new sources'' means--
                            (i) any production in excess of proven 
                        developed producing reserves of fossil fuels as 
                        of the date of enactment of this section; or
                            (ii) new or expanded fossil infrastructure 
                        that would facilitate the production described 
                        in subparagraph (A).
                    (D) Production.--The term ``production'' means 
                extractive or production activities that result in 
                fossil fuels being made available for refining or use.
    (d) State Law.--Nothing in this section may be construed to preempt 
any provision of State law that provides greater protection to 
consumers, or establishes more stringent environmental or ecological 
regulations, than is provided in this section.

SEC. 107. TECHNICAL ASSISTANCE.

    The Board of Governors shall provide technical assistance to public 
member banks to develop, use, and share financial and infrastructure 
technologies, practices, and operational and business practice data 
that promote the public welfare, however such data may not include any 
customer data, including transactional and identifying information.

           TITLE II--FEDERAL RECOGNITION OF PUBLIC SECURITIES

SEC. 201. REGULATION OF PUBLIC LENDING BANKS AND NON-FEDERALLY 
              CHARTERED BANKS.

    (a) In General.--The Commission shall establish a separate 
registration and regulatory scheme for licensing and regulating as 
public investment entities all public lending banks and non-federally 
chartered banks that engage or seek to engage in securities-related 
activities, including origination, investment brokering, dealing, and 
trading of federally-recognized public securities.
    (b) Federally-recognized Public Securities.--The Board of Governors 
shall, in consultation with the Commission, develop rules, standards, 
and criteria for Federal recognition of securities issued by public 
member banks (to be known as ``federally-recognized public 
securities'') as the Commission determines to be necessary and 
appropriate to promote public welfare.
    (c) Conditional License.--The Commission shall establish a special 
category of public investment entity license for entities that are in 
the process of applying for, but have not yet received, any license to 
issue federally-recognized public securities, which shall be subject to 
such conditions and restrictions as the Commission determines to be 
necessary and appropriate to promote public welfare.

                  TITLE III--PUBLIC DEPOSIT INSURANCE

SEC. 301. IN GENERAL.

    (a) Public Deposit Insurance.--The Corporation shall establish a 
separate registration and regulatory scheme for providing deposit 
insurance (to be known as ``public deposit insurance'') to covered 
banks and make such deposit insurance available to covered banks 
without regard to the total deposit amount.
    (b) Conditional Insurance.--The Corporation shall establish a 
separate registration and regulatory scheme for providing deposit 
insurance (to be known as ``conditional public deposit insurance'') for 
entities that are in the process of applying for, but have not yet 
received, public deposit insurance, which shall be subject to such 
conditions and restrictions as the Corporation determines to be 
necessary and appropriate to promote public welfare.

                        TITLE IV--POSTAL BANKING

SEC. 401. PARTNERSHIPS WITH COVERED BANKS FOR POSTAL BANKING SERVICES.

    (a) Partnership With USPS.--Notwithstanding section 404(e)(2) of 
title 36, United States Code, the Postmaster General shall, to the 
maximum extent practicable, partner with covered banks to make 
available retail account and payment services provided by covered banks 
at post offices, and via any postal banking platforms established by 
the United States Postal Service.
    (b) Funding.--The Board of Governors shall provide such funding to 
the United States Postal Service as the Postmaster General determines 
to be necessary to achieve carry out subsection (a).
    (c) Treatment of Expenses.--Any expenses incurred by the Board of 
Governors under this section shall be recorded--
            (1) in an account to be known as the ``Special Public 
        Member Bank Services Account'' established at the Federal 
        Reserve Bank of New York; and
            (2) as a deferred asset (as described in section 11.96 of 
        the Financial Accounting Manual for Federal Reserve Banks, as 
        in effect on the date of the enactment of this Act) and 
        maintained separately from the balance sheet of the Federal 
        Reserve Bank of New York and the Federal Reserve System, so as 
        to not reduce or impact the calculation of total income or 
        revenue generated by the Federal Reserve System, or otherwise 
        reduce the total amount of net operating profits to be made 
        available for remittance to the Treasury on an ongoing basis.

               TITLE V--PUBLIC BANK DEVELOPMENT PROGRAMS

SEC. 501. PUBLIC BANK GRANT PROGRAM.

    (a) Program Established.--
            (1) In general.--The Board of Governors shall, jointly with 
        the Secretary, carry out a grant program to make grants to 
        covered banks, or persons seeking to become or in the process 
        of becoming covered banks, to carry out the activities 
        described in subsection (b).
            (2) Considerations for eligibility.--
                    (A) Required considerations.--When determining 
                eligibility for grants under this section, the Board of 
                Governors and the Secretary shall consider, among other 
                factors, the extent to which a grant applicant has 
                established an appropriate degree of community 
                involvement and oversight, including dedicated 
                community representation on the governing board, and 
                evidence of support or commitment from community 
                representative organizations.
                    (B) Prohibited consideration.--When determining 
                eligibility for grants under this section, the Board of 
                Governors and the Secretary may not consider the 
                budgetary or financial health of the entity that wholly 
                owns or controls a covered bank.
    (b) Use of Funds.--An entity that receives a grant under this 
section may use the grant funds--
            (1) to carry out activities related to bank formation, 
        chartering, and regulatory compliance;
            (2) for capitalization;
            (3) to make payments and develop financial market 
        infrastructure;
            (4) to carry out activities related to information and 
        communications technology;
            (5) to support operations;
            (6) to cover unexpected losses; and
            (7) to carry out such other activities as the Board of 
        Governors and the Secretary determine appropriate.
    (c) Matching Funds.--The Board of Governors and the Secretary may 
not require that an entity that receives a grant under this section 
provide matching funds with respect to such grant.

SEC. 502. PUBLIC BANK INCUBATOR PROGRAM.

    (a) In General.--The Board of Governors shall establish an 
incubator program to provide technical and technological assistance to 
persons seeking to be chartered by the Board of Governors under section 
101 or to obtain a certificate of Federal recognition under section 
102.
    (b) Application.--The Board of Governors, in coordination with the 
Secretary, the Corporation, and the Commission, shall establish a 
single application and review process for persons seeking to--
            (1) be federally chartered under section 101;
            (2) obtain a certificate of Federal recognition under 
        section 102;
            (3) become a public member bank;
            (4) obtain a license to issue federally-recognized public 
        securities under section 201;
            (5) obtain public deposit insurance pursuant to section 301 
        or from a Corporation-approved alternative provider; and
            (6) apply for a grant under section 401.

SEC. 503. COMMUNITY DEVELOPMENT GRANT PROGRAM.

    (a) Reasonable Efforts To Coordinate.--Covered banks shall, where 
and as appropriate, make reasonable efforts to coordinate activities 
with community development financial institutions, minority deposit 
institutions, and credit unions to promote community development and 
ensure community-oriented financial services are universal and 
comprehensively include historically excluded and marginalized groups.
    (b) Grants for Coordination.--The Board of Governors shall, jointly 
with the Secretary, award grants to covered banks, community 
development financial institutions, minority deposit institutions, and 
credit unions to facilitate coordination of activities under subsection 
(a).
    (c) Definitions.--In this section:
            (1) Community development financial institution.--The term 
        ``community development financial institution'' has the meaning 
        given the term in section 103(5) of the Riegle Community 
        Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
        4702(5)).
            (2) Credit union.--The term ``credit union'' means a 
        Federal credit union or a State credit union (as such terms are 
        defined in section 101 of the Federal Credit Union Act (12 
        U.S.C. 1752)).
            (3) Minority deposit institution.--The term ``minority 
        deposit institution'' has the meaning given the term in section 
        308(b)(1) of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1463(b)(1)).

SEC. 504. TREATMENT OF FUNDING.

    Any expenses incurred by the Board of Governors under this title 
shall be recorded--
            (1) in an account to be known as the ``Special Public Bank 
        Development Programs'' established at the Federal Reserve Bank 
        of New York; and
            (2) as a deferred asset (as described in section 11.96 of 
        the Financial Accounting Manual for Federal Reserve Banks, as 
        in effect on the date of the enactment of this Act) and 
        maintained separately from the balance sheet of the Federal 
        Reserve Bank of New York and the Federal Reserve System, so as 
        to not reduce or impact the calculation of total income or 
        revenue generated by the Federal Reserve System, or otherwise 
        reduce the total amount of net operating profits to be made 
        available for remittance to the Treasury on an ongoing basis.
                                 <all>