[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3323 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 3323
To strengthen the ability of the Federal Home Loan Bank system to
provide critical financing to address the economic crisis caused by the
COVID-19 and to meet the short- and long-term housing and community
economic development needs of low-income communities, including Tribal
communities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 18, 2021
Mr. Torres of New York introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committees on Ways and Means, and Small Business, 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 strengthen the ability of the Federal Home Loan Bank system to
provide critical financing to address the economic crisis caused by the
COVID-19 and to meet the short- and long-term housing and community
economic development needs of low-income communities, including Tribal
communities, 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 ``Federal Home Loan Banks' Mission
Implementation Act''.
SEC. 2. PURPOSE.
The purpose of this Act is to promote economic recovery in response
to the COVID-19 pandemic and to meet the short- and long-term housing
and community economic development needs of low-income communities,
including Tribal communities, by--
(1) increasing the ability of the Federal Home Loan Banks
to accept, as collateral, small business loans guaranteed by
the Small Business Administration;
(2) authorizing the Federal Home Loan Banks to accept
government guaranteed loans as collateral to support COVID-19
programs;
(3) allowing community development financial institutions
and credit unions to pledge community financial institution
collateral, such as small business, small agriculture, and
community development loans, and enable the Federal Housing
Finance Agency to raise the threshold for qualification as a
community financial institution;
(4) providing letters of credit to provide liquidity, and
support, stabilize and strengthen local, Tribal, State and
Federal governmental entities public unit deposits, housing and
community development efforts, and vital public financing;
(5) increasing funding for the Affordable Housing Program
established by each Federal Home Loan Bank under section 10(j)
of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)) and
establishing a 2-percent set aside for Native American Tribes;
and
(6) creating a community economic development investment
program within the Federal Home Loan Bank system to generate
financial opportunity, create jobs, and stimulate economic
development in distressed urban, rural, Tribal, and suburban
communities in the United States.
SEC. 3. FHLB ADVANCES SECURED BY SBA LOANS.
Section 7 of the Small Business Act (15 U.S.C. 636) is amended by
adding at the end the following:
``(o) Federal Home Loan Bank Advances.--
``(1) Definition of bank.--In this subsection, the term
`Bank' means a Federal Home Loan Bank, as defined in section 2
of the Federal Home Loan Bank Act (12 U.S.C. 1422).
``(2) Advances.--A Bank that, in the exercise of its
authority under section 10 of the Federal Home Loan Bank Act
(12 U.S.C. 1430) to make secured advances, accepts as
collateral a loan guaranteed by the Administration under this
Act or any other provision of law, including loans guaranteed
under section 7(a)--
``(A) may exercise all of the rights and remedies
contained in any pledge or similar security agreement
between the Bank and the lending or participating
institution that made or purchased the loan; and
``(B) in the event of default on the loan, shall
possess the same rights and remedies as such a lending
or participating institution would possess in the same
circumstance, including collecting monies due on the
guarantee directly from the Administration.
``(3) Transfer of guarantee.--With respect to a guaranteed
loan that a Bank accepts as collateral under paragraph (2), the
guarantee obligation of the Administration on the loan shall
transfer to the Bank.''.
SEC. 4. MAKING GOVERNMENT GUARANTEED LOANS IN RESPONSE TO THE COVID-19
CRISIS ELIGIBLE COLLATERAL FOR THE FEDERAL HOME LOAN
BANKS.
Section 10(a)(3) of the Federal Home Loan Bank Act (12 U.S.C.
1430(a)(3)) is amended by adding at the end the following:
``(F) Loans guaranteed or insured by the United
States Government or any agency thereof and made by any
member under programs or facilities established by the
Secretary of the Treasury or the Board of Governors of
the Federal Reserve System under the CARES Act (Public
Law 116-136) or other similar programs or facilities in
subsequently enacted Acts to address the impact to the
economy from the COVID-19 crisis, including other
similar programs or facilities established under
section 13(3) of the Federal Reserve Act (12 U.S.C.
343(3)).
``(G) Loans guaranteed by the Small Business
Administration under the Small Business Act (15 U.S.C.
631 et seq.) or any other provision of law.''.
SEC. 5. ADDING CREDIT UNIONS TO THE DEFINITION OF COMMUNITY FINANCIAL
INSTITUTIONS AND EXPANDING THE PURPOSES OF ADVANCES AND
COLLATERAL AVAILABLE TO CERTAIN COMMUNITY DEVELOPMENT
FINANCIAL INSTITUTIONS.
(a) In General.--Section 10(a) of the Federal Home Loan Bank Act
(12 U.S.C. 1430(a)) is amended--
(1) in paragraph (2)(B), by inserting ``or qualifying
community development financial institution'' after ``community
financial institution''; and
(2) in paragraph (3)(E), by inserting ``or qualifying
community development financial institution'' after ``community
financial institution''.
(b) Definitions.--Section 2 of the Federal Home Loan Bank Act (12
U.S.C. 1422) is amended--
(1) in paragraph (10)--
(A) by striking ``institution.--'' and all that
follows through ``The term'' and inserting
``institution.--The term'';
(B) by striking subparagraph (B);
(C) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively, and adjusting
the margins accordingly;
(D) in subparagraph (A), as so redesignated, by
inserting ``(12 U.S.C. 1811 et seq.) or the Federal
Credit Union Act (12 U.S.C. 1751 et seq.)'' before the
semicolon; and
(E) in subparagraph (B), as so redesignated, by
striking ``$1,000,000,000'' and inserting ``assets at a
level set by the Agency, but not more than
$10,000,000,000''; and
(2) by adding at the end the following:
``(13) Qualifying community development financial
institution.--The term `qualifying community development
financial institution' means an entity that--
``(A) has been certified as a community development
financial institution (as such term is defined in
section 103 of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4702) by
the Secretary of the Treasury; and
``(B) satisfies the average total assets threshold
requirement for a community financial institution set
forth in paragraph (10).''.
SEC. 6. STANDBY LETTERS OF CREDIT.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is
amended--
(1) in section 2 (12 U.S.C. 1422), as amended by section 5
of this Act, is amended by adding at the end the following:
``(14) Employee- or community-owned company.--The term
`employee- or community-owned company' means--
``(A) an organization described in section 1381 of
the Internal Revenue Code of 1986;
``(B) an eligible worker-owned cooperative, as
defined in section 1042(c)(2) of the Internal Revenue
Code of 1986; and
``(C) an employee stock ownership plan, as defined
in section 4975(e)(7) of the Internal Revenue Code of
1986, which meets the requirements of section 409 of
such Code.''; and
(2) in section 11 (12 U.S.C. 1431), by adding at the end
the following:
``(m) Standby Letters of Credit.--
``(1) In general.--Each Federal Home Loan Bank is
authorized to issue and confirm standby letters of credit,
secured by collateral eligible to secure advances, to support
any activity permitted under law or regulation applicable to
the member or non-member mortgagee eligible to receive advances
under section 10b, subject to safety and soundness oversight,
including the purposes described in paragraph (2).
``(2) Purposes.--Each Bank is authorized to issue or
confirm on behalf of members or non-member mortgagees standby
letters of credit that comply with the requirements of this
subsection for any of the following purposes:
``(A) To assist members or non-member mortgagees in
facilitating residential housing finance.
``(B) To assist members or non-member mortgagees in
facilitating community lending.
``(C) To assist members or non-member mortgagees
with asset or liability management.
``(D) To provide members or non-member mortgagees
with liquidity or other funding.
``(E) To assist members in facilitating business
retention or facilitating business transition to
employee- or community-owned companies or assisting
those companies.''.
SEC. 7. LETTERS OF CREDIT ON TAX EXEMPT BONDS.
(a) In General.--Clause (iv) of section 149(b)(3)(A) of the
Internal Revenue Code of 1986 is amended by striking ``a bond during
the period beginning on the date of the enactment of this clause and
ending on December 31, 2010'' and inserting ``a municipal bond (as
defined in section 75(b)(1)) on or after the date of enactment of the
Federal Home Loan Banks' Mission Implementation Act''.
(b) Safety and Soundness Requirements.--Subparagraph (E) of section
149(b)(3) of the Internal Revenue Code of 1986 is amended by striking
``which are at least'' and all that follows through the period and
inserting ``as are established by the Director of the Federal Housing
Finance Agency from time to time.''.
(c) Effective Date.--The amendments made by this section shall
apply to guarantees made after the date of enactment of this Act.
(d) Sunset.--Effective on the date that is 2 years after the date
on which the Federal Emergency Management Agency terminates the
emergency declared on March 13, 2020 by the President under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
4121 et seq.) relating to the Coronavirus Disease 2019 (COVID-19)
pandemic, section 149(b)(3) of the Internal Revenue Code of 1986 is
amended--
(1) in subparagraph (A)(iv), by striking ``a municipal bond
(as defined in section 75(b)(1)) on or after the date of
enactment of the Federal Home Loan Banks' Mission
Implementation Act'' and inserting ``a bond during the period
beginning on the date of the enactment of this clause and
ending on December 31, 2010''; and
(2) in subparagraph (E), by striking ``as are established
by the Director of the Federal Housing Finance Agency from time
to time'' and inserting ``which are at least as stringent as
such requirements which apply under regulations applicable to
such guarantees by Federal home loan banks as in effect on
April 9, 2008''.
SEC. 8. AFFORDABLE HOUSING PROGRAM.
(a) In General.--Section 10 of the Federal Home Loan Bank Act (12
U.S.C. 1430) is amended--
(1) in subsection (j)--
(A) in paragraph (3)--
(i) in the matter preceding subparagraph
(A), by striking ``such as the following:'' and
inserting ``such as--'';
(ii) in subparagraph (A)--
(I) by inserting ``the'' before
``purchase''; and
(II) by striking the comma at the
end and inserting a semicolon;
(iii) in subparagraph (B)--
(I) by inserting ``the'' before
``purchase''; and
(II) by striking ``and'' at the
end;
(iv) in subparagraph (C)--
(I) by inserting ``the'' before
``purchase''; and
(II) by striking the period at the
end and inserting a semicolon; and
(v) by adding at the end the following:
``(D) the purchase or rehabilitation of housing
financed by a community land trust; and
``(E) the purchase or rehabilitation of housing in
qualified manufactured home communities owned by
nonprofit organizations or the residents.''; and
(B) in paragraph (5)(C)--
(i) by striking ``10'' and inserting
``20'';
(ii) by striking ``100,000,000'' and
inserting ``200,000,000''; and
(iii) by adding at the end the following:
``Of such contribution, an amount equal to not
less than 2 percent of 20 percent of the
preceding year's net income shall be used to
support subsidized grants or advances through
the Affordable Housing Program benefitting
federally recognized Indian Tribes and
communities, which includes awards outside of
the district of a Bank.''.
(b) Definitions.--Section 2 of the Federal Home Loan Bank Act (12
U.S.C. 1422), as amended by section 6 of this Act, is amended by adding
at the end the following:
``(16) Manufactured home.--The term `manufactured home' has
the meaning given the term in section 603 of the National
Manufactured Housing Construction and Safety Standards Act of
1974 (42 U.S.C. 5402).
``(17) Qualified manufactured home community.--
``(A) In general.--The term `qualified manufactured
home community' means--
``(i) a cooperative controlled by residents
or a nonprofit or municipal housing corporation
established pursuant to the laws of the State
in which the property used as a manufactured
home community is located; and
``(ii)(I) in the case of a community owned
by a cooperative corporation or membership
nonprofit, with membership interests that are
sold on a non-appreciating basis, has only 1
class of membership consisting solely of
residents and homeowners that occupy a home in
that manufactured home community; or
``(II) in the case of a community owned by
a nonprofit corporation--
``(aa) the nonprofit exists for the
purposes of preserving and improving
affordable housing and is primarily for
residential purposes; and
``(bb) the intent of the nonprofit
in acquiring the community is for the
purposes of preserving and improving
the manufactured home community.
``(B) Governance.--An entity shall not be treated
as a qualified manufactured home community unless
governance of the entity is carried out by members
elected to a board of directors with voting structured
equitably among all members.''.
(c) Technical and Conforming Amendments.--Section 10 of the Federal
Home Loan Bank Act (12 U.S.C. 1430) is amended--
(1) in subsection (c), by striking ``Federal home loan
bank'' and inserting ``Federal Home Loan Bank'';
(2) in subsection (h)(2), by striking ``section 10(a) of
this Act'' and inserting ``subsection (a)''; and
(3) in subsection (j)--
(A) in paragraph (2), in the matter preceding
subparagraph (A), by striking ``Board's regulations''
and inserting ``regulations promulgated by the
Director'';
(B) in paragraph (6)--
(i) in subparagraph (A), by striking ``this
paragraph'' and inserting ``paragraph (5)'';
(ii) in subparagraph (C), in the second
sentence, by striking ``Board's decision'' and
inserting ``decision of the Director''; and
(iii) in subparagraph (F), by inserting
``Notification.--'' before ``The Director'';
(C) in paragraph (8), in the matter preceding
subparagraph (A), by striking ``paragraph'' and
inserting ``subsection'';
(D) in paragraph (12)--
(i) in subparagraph (A), by inserting ``In
general.--'' before ``The Director''; and
(ii) in subparagraph (B), by inserting
``Analyses.--'' before ``The analyses''; and
(E) in paragraph (13), in the matter preceding
subparagraph (A), by striking ``subsection--'' and
inserting ``subsection:''.
SEC. 9. COMMUNITY INVESTMENT CASH ADVANCE AND COMMUNITY ECONOMIC
DEVELOPMENT PROGRAM.
(a) In General.--Section 10 of the Federal Home Loan Bank Act (12
U.S.C. 1430) is amended by inserting after subsection (e) the
following:
``(f) Community Investment Cash Advance and Community Economic
Development Program.--
``(1) In general.--Pursuant to regulations promulgated by
the Director, each Bank--
``(A) may establish community investment cash
advance programs to provide financing for members or
nonmember mortgagees eligible to receive advances under
section 10b to provide projects targeted to certain
economic development activities and specific
beneficiaries, including certain geographic areas and
at certain targeted income levels established by the
Bank with the prior approval of Director; and
``(B) shall provide targeted community economic
development grants and lending.
``(2) Mixed-use projects.--With respect to a project funded
under a program established under this subsection involving a
combination of housing projects and economic development
projects, only the economic development components of the
project shall be required to meet the appropriate targeted
income level for the program.
``(3) Pricing and availability of advances.--A Bank shall
price advances to members under this subsection as provided in
section 1266.5 of title 12, Code of Federal Regulations, or any
successor regulation, and may price such advances at rates
below the price of advances of similar amounts, maturities, and
terms made pursuant to subsection (a).
``(4) Advances to non-member mortgagees eligible to receive
advances.--
``(A) In general.--A Bank may offer advances under
a program established under this subsection to non-
member mortgagees eligible to receive advances under
subsection (b) at the Bank's option.
``(B) Pricing.--A Bank shall price advances under
this paragraph to non-member mortgagees eligible to
receive advances under section 10b as provided in
section 1266.17 of title 12, Code of Federal
Regulations, or any successor regulation, and may price
such advances at rates below the price of advances of
similar amounts, maturities, and terms made pursuant to
section 10b.
``(5) Pricing pass-through.--A Bank may require that
borrowers receiving advances made under a program established
under this subsection pass through the benefit of any price
reduction from regular advance pricing to borrowers of the
Bank.
``(6) Discount fund.--
``(A) In general.--A Bank may establish a discount
fund that the Bank may use to reduce the price of
advances made under a program established under this
subsection below the advance prices provided for by
part 1292 of title 12, Code of Federal Regulations, or
any successor regulation.
``(B) Fair distribution scheme.--Price reductions
made through a discount fund under subparagraph (A)
shall be made in accordance with a fair distribution
scheme.
``(7) Community economic developing grants and lending.--
``(A) Definitions.--In this paragraph:
``(i) Eligible entity.--The term `eligible
entity' means--
``(I) a locally owned nonprofit
organization described in section
501(c)(3) of the Internal Revenue Code
of 1986 and exempt from taxation under
section 501(a) of such Code or a
community development corporation--
``(aa) that has experience
in developing and managing
economic development projects;
``(bb) that is governed by
a board of directors consisting
of residents of the community
and business and civic leaders;
and
``(cc) the principal
purpose of which is to plan,
develop, or manage low-income
housing or community
development projects;
``(II) a non-depository community
development financial institution, as
defined in section 103 of the Riegle
Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C.
4702), that is certified by the
Community Development Financial
Institutions Fund under section
1805.201 of title 12, Code of Federal
Regulations, or any successor
regulation;
``(III) a federally recognized
Indian Tribe or community; or
``(IV) a regional or national
nonprofit community development or
cooperative development intermediary.
``(ii) Low-income community.--The term
`low-income community' has the meaning given
the term in section 45D(e) of the Internal
Revenue Code of 1986.
``(iii) Rural community.--The term `rural
community' means a city, town, or Census
Designated Place with a population of not more
than 20,000, according to the most recent
decennial census conducted by the Bureau of the
Census.
``(iv) Very low-income household.--The term
`very low-income household' means a household
with an income that is not greater than 50
percent of the area median income.
``(B) Requirement.--Each Bank shall establish a
program to provide grants or subsidize the interest
rate on advances to members engaged in lending to
eligible entities for economic development activities
that serve low-income or rural communities.
``(C) Use of funds.--The entire amount of a grant
or subsidized advance provided under this paragraph--
``(i) shall benefit the communities
assisted by the recipient of the grant or
subsidized advance;
``(ii) shall not be used for the purpose of
financial education or to support a sports
stadium or arena; and
``(iii) shall provide at least 2 percent of
grants or advance funds to benefit federally
recognized Indian Tribes or communities, which
may include a Bank providing grants or advance
funds outside of the district of the Bank.
``(D) Eligible activities.--Economic development
activities that are eligible to be carried out under
this paragraph include--
``(i) providing grants and equity
investments, including those that capitalize a
revolving loan fund of a Treasury-certified
non-depository community development financial
institution for eligible economic development
activities similar to the authority provided
within the Affordable Housing Program under
subsection (j);
``(ii) providing awards consistent with
awards provided under section 680 of the
Community Block Grant Act (42 U.S.C. 9921);
``(iii) financing business transitions to
worker-owned cooperatives or financing the
sales of business assets to employees or
community stakeholders that preserve jobs in
low- and moderate-income communities;
``(iv) financing capital expenditures, such
as the purchase of equipment or real property
for nonprofit organizations, including child
care or health care facilities in low-income
communities, that provide service to low-income
households;
``(v) financing operating expenses for
nonprofit community development organizations
engaged in community economic development
activities benefitting very low-income
households;
``(vi) water, road, broadband, clean
energy, or municipal infrastructure
investments, including investments to address
climate change, in Native American tribal lands
and economically distressed rural communities;
``(vii) providing community facilities or
infrastructure, including public transit, green
space consisting of parks with trees and
shrubbery, heat-reflecting road and sidewalk
upgrades, tornado shelters, public restrooms,
or environmental cooling locations accessible
to the public in low-income communities; and
``(viii) any other activity established by
the Director in consultation with Congress, the
Federal Home Loan Banks and their housing
advisory councils, and the public.
``(E) Priorities for making grants and advances.--
In using amounts provided under this paragraph, each
Bank member shall give priority to qualified projects
such as--
``(i) grants or advances for mixed-use
housing developments that provide economic
activity and affordable housing for low-income
and rural communities;
``(ii) grants or advances for child care
facilities that serve low-income households;
``(iii) grants or advances for programs
that provide economic opportunities for
formerly incarcerated individuals;
``(iv) grants or advances that enable
conversion to employee- or community-owned
companies or financing the sales of business
assets to employees or community stakeholders;
``(v) grants or advances to established
regional and national intermediary
organizations that already receive Federal
funds and have the capacity to deliver economic
development activities to low-income
households; and
``(vi) any other priority established by
the Agency in consultation with the Banks, Bank
members, housing advisory councils of the
Banks, Congress, and the public.
``(F) Requirements for projects in rural
communities.--With respect to a project carried out by
an eligible entity in a rural community under this
paragraph--
``(i) not less than 51 percent of the
population served by the project shall reside
in the rural community;
``(ii) the projects shall primarily serve
and benefit rural residents and communities;
and
``(iii) the rural community shall be within
the jurisdiction of the eligible entity.
``(G) Report.--Each member receiving a grant or
advance under this paragraph shall report annually to
the Bank making the grant or advance concerning the use
by the member of the grant or advance.
``(H) Contribution to program.--Each Bank shall
annually contribute 10 percent of the preceding year's
net income, or such prorated sums as may be required to
ensure that the aggregate contribution of the Banks
shall not be less than $100,000,000 for each such year,
to support grants and subsidized advances made under
this paragraph.''.
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