[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8833 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 8833
To amend the Community Reinvestment Act of 1977 to improve the
assessment process for financial institutions under that Act, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 15, 2022
Ms. Waters 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
assessment process for financial institutions under that Act, 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 ``Making Communities Stronger through
the Community Reinvestment Act''.
SEC. 2. FINDING.
The Congress finds that Senator William Proxmire, who authored the
Community Reinvestment Act of 1977 legislation, testified when
discussing its purpose: ``By redlining . . . I am talking about the
fact that banks and savings and loans will take their deposits from a
community and instead of reinvesting them in that community, they will
actually or figuratively draw a red line on a map around the areas of
their city, sometimes in the inner city, sometimes in the older
neighborhoods, sometimes ethnic and sometimes black, but often
encompassing a great area of their neighborhood.''.
SEC. 3. ASSESSMENT OF COMMUNITY SERVICE.
(a) In General.--Section 804 of the Community Reinvestment Act of
1977 (12 U.S.C. 2903) is amended by adding at the end the following:
``(e) Assessment of Community Service.--
``(1) In general.--In assessing and taking into account,
under subsection (a), any community service or charity work
performed by the executives, board members, and employees of a
financial institution, the appropriate Federal financial
supervisory agency may not give any credit for such service or
work unless--
``(A) the executives, board members, and employees
performing such service or work were acting as
representatives of the financial institution at the
time the service or work were performed;
``(B) with respect to a financial institution with
total consolidated assets of at least $2,000,000,000,
the financial institution--
``(i) collects and maintains relevant
information with respect to the community
service and charity work of the financial
institution, in a format prescribed by the
appropriate Federal financial supervisory
agency; and
``(ii) reports such information on an
annual basis to the appropriate Federal
financial supervisory agency; and
``(C) the financial institution demonstrates the
impact of the community service or charity work on low-
and moderate-income neighborhoods, including whether
the community service or charity work--
``(i) serves persistent poverty counties;
``(ii) serves geographic areas with low
levels of community development financing;
``(iii) supports a minority depository
institution, women's depository institution,
low-income credit union, or a community
development financial institution certified by
the Secretary of the Treasury;
``(iv) serves low-income individuals and
families;
``(v) supports small businesses or small
farms with gross annual revenues of $250,000 or
less;
``(vi) directly facilitates the
acquisition, construction, development,
preservation, or improvement of affordable
housing in high opportunity areas;
``(vii) benefits Native communities, such
as--
``(I) revitalization activities in
Native Land Areas;
``(II) essential community
facilities in Native Land Areas;
``(III) essential community
infrastructure in Native Land Areas;
and
``(IV) disaster preparedness and
climate resiliency activities in Native
Land Areas;
``(viii) reflects a high degree of
engagement with community partners, and are
highly responsive to the needs of low-income
communities;
``(ix) result in a new community
development financing product or service that
addresses community development needs for low-
or moderate-income individuals and families; or
``(x) serves limited English proficient
communities.
``(2) Definitions.--In this subsection:
``(A) Community development financial
institution.--The term `community development financial
institution' has the meaning given that term under
section 103 of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4702).
``(B) High opportunity area.--The term `high
opportunity area' means an area--
``(i) designated by--
``(I) the Secretary of Housing and
Urban Development as a Difficult
Development Area; or
``(II) a State or local qualified
allocation plan as a high opportunity
area; and
``(ii) with a poverty rate below--
``(I) 10 percent, with respect to a
metropolitan area; or
``(II) 15 percent, with respect to
an area that is not a metropolitan
area.
``(C) Native land area.--The term `Native Land
Area' means--
``(i) all land within the limits of any
Indian reservation under the jurisdiction of
the Federal Government, as described in section
1151(a) of title 18, United States Code;
``(ii) all dependent Indian communities
within the borders of the United States whether
within the original or subsequently acquired
territory thereof, and whether within or
without the limits of a State, as described in
section 1151(b) of title 18, United States
Code;
``(iii) all Indian allotments, the Indian
titles to which have not been extinguished,
including rights-of-way running through the
same, as defined in section 1151(c) of title
18, United States Code;
``(iv) any land held in trust by the United
States for Native Americans, as described in
section 3765(1)(A) of title 38, United States
Code;
``(v) reservations established by a State
government for a Tribe or Tribes recognized by
the State;
``(vi) any Alaska Native village as defined
in section 3 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1602);
``(vii) lands that have the status of
Hawaiian Home Lands as defined in section 204
of the Hawaiian Homes Commission Act, 1920 (42
Stat. 108);
``(viii) areas defined by the Bureau of the
Census as Alaska Native Village Statistical
Areas, Oklahoma Tribal Statistical Areas,
Tribal-Designated Statistical Areas, or
American Indian Joint-Use Areas; and
``(ix) land areas of State-recognized
Indian tribes and heritage groups that are
defined and recognized by individual States and
included in the annual Boundary and Annexation
Survey of the Bureau of the Census.
``(D) Persistent poverty county.--Term `persistent
poverty county' means a county that has had poverty
rates of 20 percent or more for the past 30 years, as
measured by the most recent decennial censuses.''.
(b) Effective Date.--Section 804(e) of the Community Reinvestment
Act of 1977, as added by subsection (a), shall take effect after the
end of the 90-day period beginning on the date of enactment of this
Act.
SEC. 4. TREATMENT OF ILLEGAL AND DISCRIMINATORY ACTIVITY.
Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C.
2903), as amended by section 3, is further amended by adding at the end
the following:
``(f) Treatment of Illegal or Discriminatory Activity.--
``(1) In general.--In assessing and taking into account,
under subsection (a), the record of a financial institution,
the appropriate Federal financial supervisory agency shall give
negative credit for any activity of the financial institution,
a subsidiary of the financial institution, or an entity
partnering with the financial institution or subsidiary that
includes evidence of an illegal or discriminatory practice,
including--
``(A) activity that harms, including by displacing,
residents of low- and moderate-income neighborhoods;
``(B) any violation of Federal law, regardless of
whether the violation is credit-related or not,
including any violation of section 987(b) of title 10,
United States Code (commonly referred to as the
`Military Lending Act'), the Servicemembers Civil
Relief Act, or prohibitions against unfair, deceptive,
or abusive acts or practices;
``(C) any violation of State law; and
``(D) any evidence of discriminatory practices
obtained by--
``(i) the Bureau of Consumer Financial
Protection as a part of the Bureau's regular
supervision of the financial institution,
subsidiary, or entity; and
``(ii) the Department of Housing and Urban
Development.
``(2) Considerations.--In determining the treatment of any
illegal or discriminatory activity described under paragraph
(1), the appropriate Federal financial supervisory agency shall
consider--
``(A) the root cause of the activity;
``(B) the severity of the harm to individuals and
communities as a result of the activity;
``(C) the duration of time of the activity; and
``(D) the pervasiveness of the activity.
``(3) Treatment on tests and overall assessment.--If, in
performing an assessment of a financial institution under
subsection (a), the appropriate Federal financial supervisory
agency uses separate tests or other evaluations as part of the
calculation of the overall assessment, the agency shall give
negative credit on both the overall assessment and any
applicable test or evaluation.''.
SEC. 5. COMMUNITY ADVISORY COMMITTEES.
Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C.
2903), as amended by section 4, is further amended by adding at the end
the following:
``(g) Community Advisory Committees.--
``(1) In general.--Each financial institution shall form a
separate Community Advisory Committee (which shall be composed
of a diverse set of consumer, housing, community development,
and other stakeholder groups representing the applicable
metropolitan statistical area) in each of the following:
``(A) With respect to a financial institution with
consolidated assets equal to or greater than
$2,000,000,000, each metropolitan statistical area
where the financial institution or any subsidiaries of
the financial institution have a branch or other
facility (including an automated teller machine) and
each metropolitan statistical area where the financial
institution has a substantial number of customers who
maintain deposit accounts with the financial
institution.
``(B) With respect to a financial institution with
consolidated assets of less than $2,000,000,000, each
State where the financial institution or any
subsidiaries of the financial institution are located.
``(2) Quarterly consultation.--The executives of a
financial institution shall meet with all the financial
institution's Community Advisory Committees on a quarterly
basis--
``(A) to discuss the financial institution's
current work to meet the credit and deposit needs of
low- and moderate-income individuals and underserved
communities, persons with disabilities, LGBTQ+
communities, and Chinese, Asian Indian, Filipino,
Japanese, Korean, Vietnamese, Pakistani, Cambodian,
Hmong, Laotian, Thai, Taiwanese, Burmese, Bangladeshi,
Nepalese, Indonesian, Malaysian, Hispanic or Latino,
Black or African American, American Indian and Alaska
Native, Native Hawaiian, Samoan, Chamorro, Tongan,
iTaukei, Marshallese, and Other Pacific Islander
communities, as applicable to the financial
institution's geographic areas;
``(B) with respect to a financial institution with
consolidated assets equal to or greater than
$2,000,000,000, to assist the executives in developing
and updating a plan for how the institution will work
to meet the credit needs of the institution's entire
community, including low- and moderate-income
neighborhoods; and
``(C) to discuss the institution's data (which
shall be disaggregated by Chinese, Asian Indian,
Filipino, Japanese, Korean, Vietnamese, Pakistani,
Cambodian, Hmong, Laotian, Thai, Taiwanese, Burmese,
Bangladeshi, Nepalese, Indonesian, Malaysian, Hispanic
or Latino, Black or African American, American Indian
and Alaska Native, and Native Hawaiian, Samoan,
Chamorro, Tongan, iTaukei, Marshallese and Other
Pacific Islander communities, as applicable to the
financial institution's geographic areas) on--
``(i) mortgage lending and lending to small
businesses and small farms;
``(ii) retail products and services;
``(iii) community development services; and
``(iv) community development financing.
``(3) Specific consultations.--In addition to the quarterly
consultations required under paragraph (2), the executives of a
financial institution with consolidated assets of more than
$2,000,000,000 shall meet with the Community Advisory Committee
before--
``(A) the financial institution applies for a
merger or acquisition;
``(B) the financial institution, or any subsidiary
of the financial institution, applies for deposit
insurance;
``(C) the financial institution applies to open a
new branch or to relocate an existing branch; or
``(D) the financial institution provides notice
that it would close a branch or other facility.''.
SEC. 6. CONSIDERATION OF LENDING IN PARTNERSHIP WITH NON-DEPOSITORY
LENDERS.
Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C.
2903), as amended by section 5, is further amended by adding at the end
the following:
``(h) Consideration of Lending in Partnership With Non-Depository
Lenders.--
``(1) In general.--As part of assessing a financial
institution under subsection (a), the appropriate Federal
financial supervisory agency shall evaluate the financial
institution's performance in originating small farm loans,
consumer loans (including residential mortgages, unsecured
installment loans, advances, and lines of credit), and loans
for small businesses (including unsecured installment loans,
advances, and lines of credit) in partnership with one or more
non-depository lenders.
``(2) Affordability and sustainability.--In making the
evaluation described under paragraph (1), the appropriate
Federal financial supervisory agency shall consider the
affordability and sustainability of the loan originations made
in partnership with one or more non-depository lenders.
``(3) Definitions.--In this subsection:
``(A) Non-depository lender.--The term `non-
depository lender' means a lender that is not an
insured depository institution (as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C. 1813)).
``(B) Small business.--The term `small business'
means a small business concern (as defined under
section 3 of the Small Business Act (15 U.S.C. 632)),
except such term shall not include any small business
concern with gross annual revenue of greater than
$5,000,000 for the preceding fiscal year.
``(C) Small farm loan.--The term `small farm loan'
means a loan--
``(i) originated in an amount of $500,000
or less; and
``(ii) that is reported as a--
``(I) loan to finance agricultural
production and other loan to farmers;
or
``(II) loan secured by farmland.''.
SEC. 7. CONSIDERATION OF SMALL HOME MORTGAGE LENDING.
Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C.
2903), as amended by section 6, is further amended by adding at the end
the following:
``(i) Consideration of Small Home Mortgage Lending.--
``(1) In general.--As part of assessing a financial
institution under subsection (a), the appropriate Federal
financial supervisory agency shall evaluate the financial
institution's performance in facilitating home mortgage lending
targeted to low- and moderate-income borrowers in a safe and
sound manner, including--
``(A) small-dollar, first-lien mortgages of
$100,000 or less in value that facilitate a home
purchase or help a borrower to refinance an existing
mortgage; and
``(B) mortgages of any size originated in
cooperation with a minority depository institution,
women's depository institution, low-income credit
union, or a community development financial institution
certified by the Secretary of the Treasury (as defined
under section 103 of the Riegle Community Development
and Regulatory Improvement Act of 1994).
``(2) Data collection and reporting by large financial
institutions.--
``(A) In general.--Each large financial institution
shall collect, maintain, and report to the appropriate
Federal financial supervisory agency--
``(i) mortgage loan data needed to
calculate retail lending volume and
distribution metrics;
``(ii) information related to demographics
of borrowers, including the income, gender
identity, sexual orientation, race, and
ethnicity of mortgage applicants;
``(iii) the number of mortgage loans
originated with a value of $100,000 or less, as
well as the demographics of borrowers,
including income, gender, race, and ethnicity;
and
``(iv) if the financial institution has a
special purpose credit program that focuses on
borrowers from Hispanic or Latino, Black or
African American, Chinese, Asian Indian,
Filipino, Japanese, Korean, Vietnamese,
Pakistani, Cambodian, Hmong, Laotian, Thai,
Taiwanese, Burmese, Bangladeshi, Nepalese,
Indonesian, Malaysian, American Indian and
Alaska Native, Native Hawaiian, Samoan,
Chamorro, Tongan, iTaukei, Marshallese, and
Other Pacific Islander communities, all
mortgage loans originated by the financial
institution under such program that are made
for the purpose of a home purchase or to
refinance a mortgage loan made for the purpose
of a home purchase.
``(B) Template.--The appropriate Federal financial
supervisory agencies shall, jointly, issue rules to
establish a template that large financial institutions
shall use to collect information required to be
collected under this paragraph.
``(3) Additional consideration of small dollar mortgages by
small and intermediate financial institutions.--
``(A) In general.--As part of assessing a small or
intermediate financial institution under subsection
(a), the appropriate Federal financial supervisory
agency shall, at the request of the financial
institution, provide additional consideration of any
mortgages extended by the financial institution that
are small-dollar mortgages of $100,000 or less in value
that facilitate a home purchase or help a borrower to
refinance an existing mortgage.
``(B) Rating adjustment.--If the appropriate
Federal financial supervisory agency planned to assign
a rating under section 807(b)(2) to a small or
intermediate financial institution of `Satisfactory
record of meeting community credit needs', the
appropriate Federal financial supervisory agency may,
after the additional consideration described under
subparagraph (A), change such rating to `Outstanding
record of meeting community credit needs', if the
appropriate Federal financial supervisory agency
determines such change is appropriate.
``(4) Definitions.--The Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, and the
Federal Deposit Insurance Corporation shall, jointly, define
the terms `large financial institution' and `small or
intermediate financial institution' for purposes of this
subsection.''.
SEC. 8. STUDY ON DISCRIMINATION AND DISPARITIES IN ACCESS TO CREDIT.
The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is
amended by adding at the end the following:
``SEC. 810. STUDY ON DISCRIMINATION AND DISPARITIES IN ACCESS TO
CREDIT.
``(a) Study.--Not later than the end of the 2-year period beginning
on the date of enactment of this section, and every 2 years thereafter,
the appropriate Federal financial supervisory agencies shall, jointly,
and in consultation with such other Federal or State agencies as the
appropriate Federal financial supervisory agencies determine
appropriate, complete an interagency statistical study to identify
metropolitan areas and rural counties that either experience ongoing
discrimination or exhibit significant racial disparities in access to
credit for any racial or ethnic group.
``(b) Use of Data.--In carrying out each study required under
subsection (a), the appropriate Federal financial supervisory agencies
shall make use of--
``(1) data obtained under the Home Mortgage Disclosure Act
of 1975;
``(2) data obtained under section 704B of the Equal Credit
Opportunity Act;
``(3) available State data; and
``(4) information contained in public litigation against
regulated financial institutions for redlining or lending
discrimination (including litigation initiated by the Bureau of
Consumer Financial Protection, the Department of Housing and
Urban Affairs, the Department of Justice, or by private
parties).
``(c) Report.--Upon the completion of each study required under
subsection (a), the appropriate Federal financial supervisory agencies
shall, jointly, issue 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--
``(1) all findings and determinations made in carrying out
the study; and
``(2) policy recommendations to remedy the discrimination
and disparities identified in the study.''.
<all>