RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994
Public Law 103–325, as amended
108 Stat. 2160, as amended
RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994
325
117–286
Statute Compilation
United States House of Representatives
Office of the Legislative Counsel
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Riegle Community Development and Regulatory Improvement Act of 1994
National Flood Insurance Reform Act of 1994
community development banking and financial institutions act of 1994
home ownership and equity protection act of 1994
Community Development Banking and Financial Institutions Act of 1994
Program for Investment in Microentrepreneurs Act of 1999
Small Business Loan Securitization and Secondary Market Enhancement Act of 1994
Money Laundering Suppression Act of 1994
10825
103
1994-09-23
RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994
[Public Law 103–325; Approved September 23, 1994; 108 Stat. 2160]
[As Amended Through P.L. 117–286, Enacted December 27, 2022]
[Currency: This publication is a compilation of the text of Public Law 103–325. It was last amended by the public law listed in the As Amended Through note above and below at the bottom of each page of the pdf version and reflects current law through the date of the enactment of the public law listed at https://www.govinfo.gov/app/collection/comps/]
[Note: While this publication does not represent an official version of any Federal statute, substantial efforts have been made to ensure the accuracy of its contents. The official version of Federal law is found in the United States Statutes at Large and in the United States Code. The legal effect to be given to the Statutes at Large and the United States Code is established by statute (1 U.S.C. 112, 204).]

AN ACT
To reduce administrative requirements for insured depository institutions to the extent consistent with safe and sound banking practices, to facilitate the establishment of community development financial institutions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1.

SHORT TITLE; TABLE OF CONTENTS
(a)

Short Title.—
This Act may be cited as the “Riegle Community Development and Regulatory Improvement Act of 1994”.
(b)

Table of Contents.—
The table of contents for this Act is as follows:
Sec. 1.
Short title; table of contents.
TITLE I—
COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
Subtitle A—
Community Development Banking and Financial Institutions Act
Sec. 101.
Short title.
Sec. 102.
Findings and purposes.
Sec. 103.
Definitions.
Sec. 104.
Establishment of National Fund for Community Development Banking.
Sec. 104A.
Capital investments for neighborhoods disproportionately impacted by the COVID–19 pandemic.
Sec. 105.
Applications for assistance.
Sec. 106.
Community partnerships.
Sec. 107.
Selection of institutions.
Sec. 108.
Assistance provided by the Fund.
Sec. 109.
Training.
Sec. 110.
Encouragement of private entities.
Sec. 111.
Collection and compilation of information.
Sec. 112.
Investment of receipts and proceeds.
Sec. 113.
Capitalization assistance to enhance liquidity.
Sec. 114.
Incentives for depository institution participation.2
^2
Section 1134 of Public Law 111–240 (124 Stat. 2515) added a new section 114A after section 114. The amendment did not make a conforming amendment to the table of sections.
Sec. 115.
Recordkeeping.
Sec. 116.
Special provisions with respect to institutions that are supervised by Federal banking agencies.
Sec. 117.
Studies and reports; examination and audit.
Sec. 118.
Inspector General.
Sec. 119.
Enforcement.
Sec. 120.
Community Development Revolving Loan Fund for credit unions.
Sec. 121.
Authorization of appropriations.
Subtitle B—
Home Ownership and Equity Protection
Sec. 151.
Short title.
Sec. 152.
Consumer protections for certain mortgages.
Sec. 153.
Civil liability.
Sec. 154.
Reverse mortgage disclosure.
Sec. 155.
Regulations.
Sec. 156.
Applicability.
Sec. 157.
Federal Reserve study.
Sec. 158.
Hearings on home equity lending.3
^3
Section 725 of Public Law 106–102 (113 Stat. 1471) added a new subtitle C at the end of title I establishing the microenterprise technical assistance and capacity building program. Such subtitle consists of sections 171 through 181. The amendment did not make a conforming amendment to the table of sections.
TITLE II—
SMALL BUSINESS CAPITAL FORMATION
Subtitle A—
Small Business Loan Securitization
Sec. 201.
Short title.
Sec. 202.
Small business related security.
Sec. 203.
Applicability of margin requirements.
Sec. 204.
Borrowing in the course of business.
Sec. 205.
Small business related securities as collateral.
Sec. 206.
Investment by depository institutions.
Sec. 207.
Preemption of State law.
Sec. 208.
Insured depository institution capital requirements for transfers of small business obligations.
Sec. 209.
Joint study on the impact of additional securities based on pooled obligations.
Sec. 210.
Consistent use of financial terminology.
Subtitle B—
Small Business Capital Enhancement
Sec. 251.
Findings and purposes.
Sec. 252.
Definitions.
Sec. 253.
Approving States for participation.
Sec. 254.
Participation agreements.
Sec. 255.
Terms of participation agreements.
Sec. 256.
Reports.
Sec. 257.
Reimbursement by the Fund.
Sec. 258.
Reimbursement to the Fund.
Sec. 259.
Regulations.
Sec. 260.
Authorization of appropriations.
Sec. 261.
Effective date.
TITLE III—
PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT
Sec. 301.
Incorporated definitions.
Sec. 302.
Administrative consideration of burden with new regulations.
Sec. 303.
Streamlining of regulatory requirements.
Sec. 304.
Elimination of duplicative filings.
Sec. 305.
Coordinated and unified examinations.
Sec. 306.
Eighteen-month examination rule for certain small institutions.
Sec. 307.
Call report simplification.
Sec. 308.
Repeal of publication requirements.
Sec. 309.
Regulatory appeals process, ombudsman, and alternative dispute resolution.
Sec. 310.
Electronic filing of currency transaction reports.
Sec. 311.
Bank Secrecy Act publication requirements.
Sec. 312.
Exemption of business loans from Real Estate Settlement Procedures Act requirements.
Sec. 313.
Flexibility in choosing boards of directors.
Sec. 314.
Holding company audit requirements.
Sec. 315.
State regulation of real estate appraisals.
Sec. 316.
Acceleration of effective date for interaffiliate transactions.
Sec. 317.
Collateralization of public deposits.
Sec. 318.
Modification of regulatory provisions.
Sec. 319.
Expedited procedures.
Sec. 320.
Exemption of certain holding company formations from registration under the Securities Act of 1933.
Sec. 321.
Reduction of post-approval waiting periods for certain acquisitions and mergers.
Sec. 322.
Bankers' banks.
Sec. 323.
Bank Service Corporation Act amendment.
Sec. 324.
Merger transaction reports.
Sec. 325.
Credit card accounts receivable sales.
Sec. 326.
Limiting potential liability on foreign accounts.
Sec. 327.
GAO reports.
Sec. 328.
Study and report on capital standards and their impact on the economy.
Sec. 329.
Study on the impact of the payment of interest on reserves.
Sec. 330.
Study and report on the consumer credit system.
Sec. 331.
Clarification of provisions relating to administrative autonomy.
Sec. 332.
Exemption for business accounts.
Sec. 333.
Study on check-related fraud.
Sec. 334.
Insider lending.
Sec. 335.
Revisions of standards.
Sec. 336.
Alternative rules for radio advertising.
Sec. 337.
Deposit broker registration.
Sec. 338.
Amendments to the Depository Institution Management Interlocks Act.
Sec. 339.
Adverse information about consumers.
Sec. 340.
Simplified disclosure for existing depositors.
Sec. 341.
Feasibility study of data bank.
Sec. 342.
Timely completion of CRA review.
Sec. 343.
Time limit on agency consideration of completed applications.
Sec. 344.
Waiver of right of rescission for certain refinancing transactions.
Sec. 345.
Clarification of RESPA disclosure requirements.
Sec. 346.
Notice procedures for bank holding companies to seek approval to engage in certain activities.
Sec. 347.
Commercial mortgage related securities.
Sec. 348.
Clarifying amendment relating to data collection.
Sec. 349.
Guidelines for examinations.
Sec. 350.
Revising regulatory requirements for transfers of all types of assets with recourse.
TITLE IV—
MONEY LAUNDERING
Sec. 401.
Short title.
Sec. 402.
Reform of CTR exemption requirements to reduce number and size of reports consistent with effective law enforcement.
Sec. 403.
Single designee for reporting of suspicious transactions.
Sec. 404.
Improvement of identification of money laundering schemes.
Sec. 405.
Negotiable instruments drawn on foreign banks subject to recordkeeping and reporting requirements.
Sec. 406.
Imposition of civil money penalties by appropriate Federal banking agencies.
Sec. 407.
Uniform State licensing and regulation of check cashing, currency exchange, and money transmitting businesses.
Sec. 408.
Registration of money transmitting businesses to promote effective law enforcement.
Sec. 409.
Uniform Federal regulation of casinos.
Sec. 410.
Authority to grant exemptions to States with effective regulation and enforcement.
Sec. 411.
Criminal and civil penalties for structuring domestic and international transactions.
Sec. 412.
GAO study of cashiers' checks.
Sec. 413.
Technical amendments and corrections.
TITLE V—
NATIONAL FLOOD INSURANCE REFORM
Sec. 501.
Short title.
Subtitle A—
Definitions
Sec. 511.
Flood Disaster Protection Act of 1973.
Sec. 512.
National Flood Insurance Act of 1968.
Subtitle B—
Compliance and Increased Participation
Sec. 521.
Nonwaiver of flood purchase requirement for recipients of Federal disaster assistance.
Sec. 522.
Expanded flood insurance purchase requirements.
Sec. 523.
Escrow of flood insurance payments.
Sec. 524.
Placement of flood insurance by lenders.
Sec. 525.
Penalties for failure to require flood insurance or notify.
Sec. 526.
Fees for determining applicability of flood insurance purchase requirements.
Sec. 527.
Notice requirements.
Sec. 528.
Standard hazard determination forms.
Sec. 529.
Examinations regarding compliance.
Sec. 530.
Financial Institutions Examination Council.
Sec. 531.
Clerical amendment.
Subtitle C—
Ratings and Incentives for Community Floodplain Management Programs
Sec. 541.
Community rating system and incentives for community floodplain management.
Sec. 542.
Funding.
Subtitle D—
Mitigation of Flood Risks
Sec. 551.
Repeal of flooded property purchase and loan program.
Sec. 552.
Termination of erosion-threatened structures program.
Sec. 553.
Mitigation assistance program.
Sec. 554.
Establishment of National Flood Mitigation Fund.
Sec. 555.
Additional coverage for compliance with land use and control measures.
Subtitle E—
Task Forces
Sec. 561.
Flood Insurance Interagency Task Force.
Sec. 562.
Task Force on Natural and Beneficial Functions of the Floodplain.
Subtitle F—
Miscellaneous Provisions
Sec. 571.
Extension of flood insurance program.
Sec. 572.
Limitation on premium increases.
Sec. 573.
Maximum flood insurance coverage amounts.
Sec. 574.
Flood insurance program arrangements with private insurance entities.
Sec. 575.
Updating of flood maps.
Sec. 576.
Technical Mapping Advisory Council.
Sec. 577.
Evaluation of erosion hazards.
Sec. 578.
Study of economic effects of charging actuarially based premium rates for pre-FIRM structures.
Sec. 579.
Effective dates of policies.
Sec. 580.
Agricultural structures.
Sec. 581.
Implementation review by Director.
Sec. 582.
Prohibited flood disaster assistance.
Sec. 583.
Regulations.
Sec. 584.
Relation to State and local laws.
TITLE VI—
MISCELLANEOUS PROVISIONS
Sec. 601.
Oversight hearings.
Sec. 602.
Technical amendments to the Federal banking laws.
TITLE I—

COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
Subtitle A—

Community Development Banking and Financial Institutions Act
SEC. 101.
[12 U.S.C. 4701 nt]

SHORT TITLE.
This subtitle may be cited as the “Community Development Banking and Financial Institutions Act of 1994”.
SEC. 102.
[12 U.S.C. 4701]

FINDINGS AND PURPOSES.
(a)

Findings.—
The Congress finds that—
(1)
many of the Nation's urban, rural, and Native American communities face critical social and economic problems arising in part from the lack of economic growth, people living in poverty, and the lack of employment and other opportunities;
(2)
the restoration and maintenance of the economies of these communities will require coordinated development strategies, intensive supportive services, and increased access to equity investments and loans for development activities, including investment in businesses, housing, commercial real estate, human development, and other activities that promote the long-term economic and social viability of the community; and
(3)
community development financial institutions have proven their ability to identify and respond to community needs for equity investments, loans, and development services.
(b)

Purpose.—
The purpose of this subtitle is to create a Community Development Financial Institutions Fund to promote economic revitalization and community development through investment in and assistance to community development financial institutions, including enhancing the liquidity of community development financial institutions.
SEC. 103.
[12 U.S.C. 4702]

DEFINITIONS.
For purposes of this subtitle, the following definitions shall apply:
(1)

Administrator.—
The term “Administrator” means the Administrator of the Fund appointed under section 104(b).
(2)

Appropriate federal banking agency.—
The term “appropriate Federal banking agency” has the same meaning as in section 3 of the Federal Deposit Insurance Act, and also includes the National Credit Union Administration Board with respect to insured credit unions.
(3)

Affiliate.—
The term “affiliate” has the same meaning as in section 2(k) of the Bank Holding Company Act of 1956.
(4)

Board.—
The term “Board” means the Community Development Advisory Board established under section 104(d).
(5)

Community development financial institution.—
(A)

In general.—
The term “community development financial institution” means a person (other than an individual) that—
(i)
has a primary mission of promoting community development;
(ii)
serves an investment area or targeted population;
(iii)
provides development services in conjunction with equity investments or loans, directly or through a subsidiary or affiliate;
(iv)
maintains, through representation on its governing board or otherwise, accountability to residents of its investment area or targeted population; and
(v)
is not an agency or instrumentality of the United States, or of any State or political subdivision of a State.
(B)

Conditions for qualification of holding companies.—
(i)

Consolidated treatment.—
A depository institution holding company may qualify as a community development financial institution only if the holding company and the subsidiaries and affiliates of the holding company collectively satisfy the requirements of subparagraph (A).
(ii)

Exclusion of subsidiary or affiliate for failure to meet consolidated treatment rule.—
No subsidiary or affiliate of a depository institution holding company may qualify as a community development financial institution if the holding company and the subsidiaries and affiliates of the holding company do not collectively meet the requirements of subparagraph (A).
(C)

Conditions for subsidiaries.—
No subsidiary of an insured depository institution may qualify as a community development financial institution if the insured depository institution and its subsidiaries do not collectively meet the requirements of subparagraph (A).
(6)

Community partner.—
The term “community partner” means a person (other than an individual) that provides loans, equity investments, or development services, including a depository institution holding company, an insured depository institution, an insured credit union, a nonprofit organization, a State or local government agency, a quasi-governmental entity, and an investment company authorized to operate pursuant to the Small Business Investment Act of 1958.
(7)

Community partnership.—
The term “community partnership” means an agreement between a community development financial institution and a community partner to provide development services, loans, or equity investments, to an investment area or targeted population.
(8)

Depository institution holding company.—
The term “depository institution holding company” has the same meaning as in section 3 of the Federal Deposit Insurance Act.
(9)

Development services.—
The term “development services” means activities that promote community development and are integral to lending or investment activities, including—
(A)
business planning;
(B)
financial and credit counseling; and
(C)
marketing and management assistance.
(10)

Fund.—
The term “Fund” means the Community Development Financial Institutions Fund established under section 104(a).
(11)

Indian reservation.—
The term “Indian reservation” has the same meaning as in section 4(10) of the Indian Child Welfare Act of 1978, and shall include land held by incorporated Native groups, regional corporations, and village corporations, as defined in or established pursuant to the Alaska Native Claims Settlement Act, public domain Indian allotments, and former Indian reservations in the State of Oklahoma.
(12)

Indian tribe.—
The term “Indian tribe” means any Indian tribe, band, pueblo, nation, or other organized group or community, including any Alaska Native village or regional or village corporation, as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
(13)

Insured community development financial institution.—
The term “insured community development financial institution” means any community development financial institution that is an insured depository institution or an insured credit union.
(14)

Insured credit union.—
The term “insured credit union” has the same meaning as in section 101(7) of the Federal Credit Union Act.
(15)

Insured depository institution.—
The term “insured depository institution” has the same meaning as in section 3 of the Federal Deposit Insurance Act.
(16)

Investment area.—
The term “investment area” means a geographic area (or areas) including an Indian reservation that—
(A)
(i)
meets objective criteria of economic distress developed by the Fund, which may include the percentage of low-income families or the extent of poverty, the rate of unemployment or underemployment, rural population outmigration, lag in population growth, and extent of blight and disinvestment; and
(ii)
has significant unmet needs for loans or equity investments; or
(B)
encompasses or is located in an empowerment zone or enterprise community designated under section 1391 of the Internal Revenue Code of 1986.
(17)

Low-income.—
The term “low-income” means having an income, adjusted for family size, of not more than—
(A)
for metropolitan areas, 80 percent of the area median income; and
(B)
for nonmetropolitan areas, the greater of—
(i)
80 percent of the area median income; or
(ii)
80 percent of the statewide nonmetropolitan area median income.
(18)

State.—
The term “State” has the same meaning as in section 3 of the Federal Deposit Insurance Act.
(19)

Subsidiary.—
The term “subsidiary” has the same meaning as in section 3 of the Federal Deposit Insurance Act, except that a community development financial institution that is a corporation shall not be considered to be a subsidiary of any insured depository institution or depository institution holding company that controls less than 25 percent of any class of the voting shares of such corporation, and does not otherwise control in any manner the election of a majority of the directors of the corporation.
(20)

Targeted population.—
The term “targeted population” means individuals, or an identifiable group of individuals, including an Indian tribe, who—
(A)
are low-income persons; or
(B)
otherwise lack adequate access to loans or equity investments.
(21)

Training program.—
The term “training program” means the training program operated by the Fund under section 109.
SEC. 104.
[12 U.S.C. 4703]

ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY DEVELOPMENT BANKING.
(a)

Establishment.—
(1)

In general.—
There is established a corporation to be known as the Community Development Financial Institutions Fund that shall have the duties and responsibilities specified by this subtitle and subtitle B of title II. The Fund shall have succession until dissolved. The offices of the Fund shall be in Washington, D.C. The Fund shall not be affiliated with or be within any other agency or department of the Federal Government.
(2)4

Wholly owned government corporation.—
The Fund shall be a wholly owned Government corporation in the executive branch and shall be treated in all respects as an agency of the United States, except as otherwise provided in this subtitle.
^4
Pub. L. 104–134, title I, §101(e) [title III], Apr. 26, 1996, 110 Stat. 1321–257, 1321-294, 12 U.S.C. 4703 note; renumbered title I, Pub. L. 104–140, §1(a), May 2, 1996, 110 Stat. 1327, provided in part: “That notwithstanding any other provision of law, for purposes of administering the Community Development Financial Institutions Fund, the Secretary of the Treasury shall have all powers and rights of the Administrator of the CDBFI Act [12 U.S.C. 4701 et seq.] and the Fund shall be within the Department of the Treasury.”.
(b)

Management of Fund.—
(1)

Appointment of administrator.—
The management of the Fund shall be vested in an Administrator, who shall be appointed by the President. The Administrator shall not engage in any other business or employment during service as the Administrator.
(2)

Chief financial officer.—
The Administrator shall appoint a chief financial officer, who shall have the authority and functions of an agency Chief Financial Officer under section 902 of title 31, United States Code. In the event of a vacancy in the position of the Administrator or during the absence or disability of the Administrator, the chief financial officer shall perform the duties of the position of Administrator.
(3)

Other officers and employees.—
The Administrator may appoint such other officers and employees of the Fund as the Administrator determines to be necessary or appropriate.
(4)

Expedited hiring.—
During the 2-year period beginning on the date of enactment of this Act, the Administrator may—
(A)
appoint and terminate the individuals referred to in paragraphs (2) and (3) without regard to the civil service laws and regulations; and
(B)
fix the compensation of the individuals referred to in paragraph (3) without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for such individuals may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(c)

General Powers.—
In carrying out the functions of the Fund, the Administrator—
(1)
shall have all necessary and proper authority to carry out this subtitle and subtitle B of title II;
(2)
shall have the power to adopt, alter, and use a corporate seal for the Fund, which shall be judicially noticed;
(3)
may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which business of the Fund may be conducted and such rules and regulations as may be necessary or appropriate to implement this subtitle and subtitle B of title II;
(4)
may enter into, perform, and enforce such agreements, contracts, and transactions as may be deemed necessary or appropriate to the conduct of activities authorized under this subtitle and subtitle B of title II;
(5)
may determine the character of and necessity for expenditures of the Fund and the manner in which they shall be incurred, allowed, and paid;
(6)
may utilize or employ the services of personnel of any agency or instrumentality of the United States with the consent of the agency or instrumentality concerned on a reimbursable or nonreimbursable basis; and
(7)
may execute all instruments necessary or appropriate in the exercise of any of the functions of the Fund under this subtitle and subtitle B of title II and may delegate to the officers of the Fund such of the powers and responsibilities of the Administrator as the Administrator deems necessary or appropriate for the administration of the Fund.
(d)

Advisory Board.—
(1)

Establishment.—
There is established an advisory board to the Fund to be known as the Community Development Advisory Board, which shall be operated in accordance with the provisions of chapter 10 of title 5, United States Code, except that section 1013 of title 5, United States Code, does not apply to the Board.
(2)

Membership.—
The Board shall consist of 15 members, including—
(A)
the Secretary of Agriculture or his or her designee;
(B)
the Secretary of Commerce or his or her designee;
(C)
the Secretary of Housing and Urban Development or his or her designee;
(D)
the Secretary of the Interior or his or her designee;
(E)
the Secretary of the Treasury or his or her designee;
(F)
the Administrator of the Small Business Administration or his or her designee; and
(G)
9 private citizens, appointed by the President, who shall be selected, to the maximum extent practicable, to provide for national geographic representation and racial, ethnic, and gender diversity, including—
(i)
2 individuals who are officers of existing community development financial institutions;
(ii)
2 individuals who are officers of insured depository institutions;
(iii)
2 individuals who are officers of national consumer or public interest organizations;
(iv)
2 individuals who have expertise in community development; and
(v)
1 individual who has personal experience and specialized expertise in the unique lending and community development issues confronted by Indian tribes on Indian reservations.
(3)

Chairperson.—
The members of the Board specified in paragraph (2)(G) shall select, by majority vote, a chairperson of the Board, who shall serve for a term of 2 years.
(4)

Board function.—
It shall be the function of the Board to advise the Administrator on the policies of the Fund regarding activities under this subtitle. The Board shall not advise the Administrator on the granting or denial of any particular application.
(5)

Terms of private members.—
(A)

In general.—
Each member of the Board appointed under paragraph (2)(G) shall serve for a term of 4 years.
(B)

Vacancies.—
Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the previous member was appointed shall be appointed for the remainder of such term. Members may continue to serve following the expiration of their terms until a successor is appointed.
(6)

Meetings.—
The Board shall meet at least annually and at such other times as requested by the Administrator or the chairperson. A majority of the members of the Board shall constitute a quorum.
(7)

Reimbursement for expenses.—
The members of the Board may receive reimbursement for travel, per diem, and other necessary expenses incurred in the performance of their duties, in accordance with chapter 10 of title 5, United States Code.
(8)

Costs and expenses.—
The Fund shall provide to the Board all necessary staff and facilities.
[Subsection (e) amended another law.]
(f)

Government Corporation Control Act Exemption.—
Section 9107(b) of title 31, United States Code, shall not apply to deposits of the Fund made pursuant to section 108.
(g)

Limitation of Fund and Federal Liability.—
The liability of the Fund and the United States Government arising out of any investment in a community development financial institution in accordance with this subtitle shall be limited to the amount of the investment. The Fund shall be exempt from any assessments and other liabilities that may be imposed on controlling or principal shareholders by any Federal law or the law of any State, Territory, or the District of Columbia. Nothing in this subsection shall affect the application of any Federal tax law.
(h)

Prohibition on Issuance of Securities.—
The Fund may not issue stock, bonds, debentures, notes, or other securities.
[Subsection (i) amended another law.]
(j)

Assisted Institutions Not United States Instrumentalities.—
A community development financial institution or other organization that receives assistance pursuant to this subtitle shall not be deemed to be an agency, department, or instrumentality of the United States.
(k)

Transition Period.—
(1)

In general.—
During the transition period, the Secretary of the Treasury may—
(A)
assist in the establishment of the administrative functions of the Fund listed in paragraph (2); and
(B)
hire not more than 6 individuals to serve as employees of the Fund during the transition period.
(2)

Continued service.—
Individuals hired in accordance with paragraph (1)(B) may continue to serve as employees of the Fund after the transition period.
(3)

Administrative functions.—
The administrative functions referred to in paragraph (1)(A) shall be limited to—
(A)
establishing accounting, information, and recordkeeping systems for the Fund; and
(B)
procuring office space, equipment, and supplies.
(4)

Expedited hiring.—
During the transition period, the Secretary of the Treasury may—
(A)
appoint and terminate the individuals referred to in paragraph (1)(B) without regard to the civil service laws and regulations; and
(B)
fix the compensation of the individuals referred to in paragraph (1)(B) without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for such individuals may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.
(5)

Certain employees.—
During the transition period, employees of the Department of the Treasury may only comprise less than one-half of the total number of individuals hired in accordance with paragraph (1)(B).
(6)

Transition expenses.—
Amounts previously appropriated to the Department of the Treasury may be used to pay obligations and expenses of the Fund incurred under this section, and such amounts may be reimbursed by the Fund to the Department of the Treasury from amounts appropriated to the Fund for fiscal year 1995.
(7)

Definition.—
For purposes of this subsection, the term “transition period” means the period beginning on the date of enactment of this Act and ending on the date on which the Administrator is appointed.
SEC. 104A.
[12 U.S.C. 4703a]

CAPITAL INVESTMENTS FOR NEIGHBORHOODS DISPROPORTIONATELY IMPACTED BY THE COVID–19 PANDEMIC.
(a)

Definitions.—
In this section—
(1)
the term “bank holding company” has the meaning given the term in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841);
(2)
the term “eligible institution” means any low- and moderate-income community financial institution that is eligible to participate in the Program;
(3)
the term “Emergency Capital Investment Fund” means the Emergency Capital Investment Fund established under subsection (b);
(4)
the term “low- and moderate-income community financial institution” means any financial institution that is—
(A)
(i)
a community development financial institution; or
(ii)
a minority depository institution; and
(B)
(i)
an insured depository institution that is not controlled by a bank holding company or savings and loan holding company that is also an eligible institution;
(ii)
a bank holding company;
(iii)
a savings and loan holding company; or
(iv)
a federally insured credit union;
(5)
the term “minority” means any Black American, Native American, Hispanic American, Asian American, Native Alaskan, Native Hawaiian, or Pacific Islander;
(6)
the term “minority depository institution” means an entity that is—
(A)
a minority depository institution, as defined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note); or
(B)
considered to be a minority depository institution by—
(i)
the appropriate Federal banking agency; or
(ii)
the National Credit Union Administration, in the case of an insured credit union; or
(C)
listed in the Federal Deposit Insurance Corporation’s Minority Depository Institutions List published for the Third Quarter 2020.
(7)
the term “Program” means the Emergency Capital Investment Program established under subsection (b);
(8)
the term “savings and loan holding company” has the meaning given the term under section 10(a) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)); and
(9)
the “Secretary” means the Secretary of the Treasury.
(b)

Establishment.—
(1)

Fund established.—
There is established in the Treasury of the United States a fund to be known as the “Emergency Capital Investment Fund”, which shall be administered by the Secretary.
(2)

Program authorized.—
The Secretary is authorized to establish an emergency program known as the “Emergency Capital Investment Program” to support the efforts of low- and moderate-income community financial institutions to, among other things, provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially in low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effects of the COVID–19 pandemic, by providing direct and indirect capital investments in low- and moderate-income community financial institutions consistent with this section.
(c)

Purchases.—
(1)

In general.—
Subject to paragraph (2), the Emergency Capital Investment Fund shall be available to the Secretary, without further appropriation or fiscal year limitation, for the costs of purchases (including commitments to purchase), and modifications of such purchases, of preferred stock and other financial instruments from eligible institutions on such terms and conditions as are determined by the Secretary in accordance with this section.
(2)

Purchase limit.—
The aggregate amount of purchases pursuant to paragraph (1) may not exceed $9,000,000,000.
(d)

Application.—
(1)

Acceptance.—
The Secretary shall begin accepting applications for capital investments under the Program not later than the end of the 30-day period beginning on the date of enactment of this section.
(2)

Consultation with regulators.—
For each eligible institution that applies to receive a capital investment under the Program, the Secretary shall consult with the appropriate Federal banking agency or the National Credit Union Administration, as applicable, to determine whether the eligible institution may receive such capital investment.
(3)

Eligibility.—
(A)

In general.—
Only low- and moderate-income community financial institutions shall be eligible to participate in the Program.
(B)

Additional criteria.—
The Secretary may establish additional criteria for participation by an institution in the Program, as the Secretary may determine appropriate in furtherance of the goals of the Program.
(4)

Requirement to provide an emergency investment lending plan for communities that may be disproportionately impacted by the economic effects of the covid–19 pandemic.—
(A)

In general.—
At the time that an applicant submits an application to the Secretary for a capital investment under the Program, the applicant shall provide the Secretary, along with the appropriate Federal banking agency or the National Credit Union Administration, as applicable, an investment and lending plan that—
(i)
demonstrates that not less than 30 percent of the lending of the applicant over the past 2 fiscal years was made directly to low- and moderate income borrowers, to borrowers that create direct benefits for low- and moderate-income populations, to other targeted populations as defined by the Fund, or any combination thereof, as measured by the total number and dollar amount of loans;
(ii)
describes how the business strategy and operating goals of the applicant will address community development needs in communities that may be disproportionately impacted by the economic effects of COVID–19, which includes the needs of small businesses, consumers, nonprofit organizations, community development, and other projects providing direct benefits to low- and moderate-income communities, low-income individuals, and minorities within the minority, rural, and urban low-income and underserved areas served by the applicant;
(iii)
includes a plan to provide community outreach and communication, where appropriate;
(iv)
includes details on how the applicant plans to expand or maintain significant lending or investment activity in low- or moderate-income minority communities, especially those that may be disproportionately impacted by COVID–19 to historically disadvantaged borrowers, and to minorities that have significant unmet capital or financial services needs.
(B)

Documentation.—
In the case of an applicant that is certified as a community development financial institution as of the date of enactment of this subsection, for purposes of subparagraph (A)(i), the Secretary may rely on documentation submitted by the applicant to the Fund as part of certification compliance reporting.
(5)

Incentives to increase lending and provide affordable credit.—
(A)

Issuance and purchase of preferred stock.—
An eligible institution that the Secretary approves for participation in the Program may issue to the Secretary, and the Secretary may purchase from such institution, preferred stock that—
(i)
provides that the preferred stock will—
(I)
be repaid not later than the end of the 10-year period beginning on the date of the capital investment under the Program; or
(II)
at the end of such 10-year period, be subject to such additional terms as the Secretary shall prescribe, which shall include a requirement that the stock shall carry the highest dividend or interest rate payable; and
(ii)
provides that the term and condition described under clause (i) shall not apply if the application of that term and condition would adversely affect the capital treatment of the stock under current or successor applicable capital provisions compared to a capital instrument with identical terms other than the term and condition described under clause (i).
(B)

Alternative financial instruments.—
If the Secretary determines that an institution cannot feasibly issue preferred stock as provided under subparagraph (A), such institution may issue to the Secretary, and the Secretary may purchase from such institution, a subordinated debt instrument whose terms are, to the extent possible, consistent with requirements under the Program applicable to the terms of preferred stock issued by institutions participating in the Program, with such adjustments as the Secretary determines appropriate, including by taking into account the tax treatment of payments made with respect to securities issued by such eligible institution.
(6)

Requirements on preferred stock and other financial instrument.—
Any financial instrument issued to the Secretary by a low- and moderate-income community financial institution under the Program shall provide the following:
(A)
No dividends, interest or other similar required payments shall have a rate exceeding 2 percent per annum for the first 10 years.
(B)
The annual required payment rate of dividends, interest, or other similar payments of a low- and moderate-income community financial institution shall be adjusted downward as follows, based on lending by the institution during the most recent annual period compared to lending by the institution during the annual period ending on September 30, 2020:
(i)
No dividends, interest, or other similar payments shall be due within the first 24-month period after the capital investment by the Secretary.
(ii)
If the amount of lending by the institution within minority, rural, and urban low-income and underserved communities and to low- and moderate-income borrowers has increased in amount between 200 percent and 400 percent of the amount of the capital investment, the annual payment rate shall not exceed 1.25 percent per annum.
(iii)
If the amount of lending by the institution within minority, rural, and urban low-income and underserved communities and to low- and moderate-income borrowers has increased by more than 400 percent of the capital investment, the annual payment rate shall not exceed 0.5 percent per annum.
(7)

Contingency of payments based on certain financial criteria.—
(A)

Deferral.—
Any annual payments under this section shall be deferred in any quarter or payment period if any of the following is true:
(i)
The low- and moderate-income community institution fails to meet the Tier 1 capital ratio or similar ratio as determined by the Secretary.
(ii)
The low- and moderate-income community financial institution fails to achieve positive net income for the quarter or payment period.
(iii)
The low- and moderate-income community financial institution determines that the payment would be detrimental to the financial health of the institution and the Chief Executive Officer and Chief Financial Officer of the institution provide written notice, in a form reasonably satisfactory to the Secretary, of such determination and the basis thereof.
(B)

Testing during next payment period.—
Any annual payment that is deferred under this section shall—
(i)
be tested against the metrics described in subparagraph (A) at the beginning of the next payment period; and
(ii)
continue to be deferred until the metrics described in that subparagraph are no longer applicable.
(8)

Requirements in connection with failure to satisfy program goals.—
Any financial instrument issued to the Secretary by a low- and moderate-income community financial institution under the Program may include such additional terms and conditions as the Secretary determines may be appropriate to provide the holders with rights in the event that such institution fails to satisfy applicable requirements under the Program or to protect the interests of the Federal Government.
(e)

Restrictions.—
(1)

In general.—
Each low- and moderate-income community financial institution may only issue financial instruments or senior preferred stock under this subsection with an aggregate principal amount (or comparable amount) that is—
(A)
not more than $250,000,000; and
(B)
(i)
not more than 7.5 percent of total assets for an institution with assets of more than $2,000,000,000;
(ii)
not more than 15 percent of total assets for an institution with assets of not less than $500,000,000 and not more than $2,000,000,000; and
(iii)
not more than 22.5 percent of total assets for an institution with assets of less than $500,000,000.
(2)

Set-asides.—
Of the amounts made available under subsection (c)(2), not less than $4,000,000,000 shall be made available for eligible institutions with total assets of not more than $2,000,000,000 that timely apply to receive a capital investment under the Program, of which not less than $2,000,000,000 shall be made available for eligible institutions with total assets of less than $500,000,000 that timely apply to receive a capital investment under the Program.
(3)

Holding of instruments.—
Holding any instrument of a low- and moderate-income community financial institution described in paragraph (1) shall not give the Secretary or any successor that owns the instrument any rights over the management of the institution in the ordinary course of business.
(4)

Sale of interest.—
(A)

In general.—
With respect to a capital investment made into a low- and moderate-income community financial institution under this section, the Secretary—
(i)
prior to any sale of such capital investment to a third party, shall provide the low- and moderate-income community financial institution a right of first refusal to buy back the investment under terms that do not exceed a value as determined by an independent third party;
(ii)
shall not sell more than 25 percent of the outstanding equity interests of any institution to a single third party without the consent of such institution, which may not be unreasonably withheld; and
(iii)
with the permission of the institution, may transfer or sell the interest of the Secretary in the capital investment for no consideration or for a de minimis amount to a mission aligned nonprofit affiliate of an applicant that is an insured community development financial institution.
(B)

Calculation of ownership for minority depository institutions.—
The calculation and determination of ownership thresholds for a depository institution to qualify as a minority depository institution shall exclude any dilutive effect of equity investments by the Federal Government, including under the Program or through the Fund.
(5)

Repayment incentives.—
The Secretary may establish repayment incentives that will apply to capital investments under the Program in a manner that the Secretary determines to be consistent with the purposes of the Program.
(f)

Treatment of Capital Investments.—
The Secretary shall seek to establish the terms of preferred stock issued under the Program to enable such preferred stock to receive Tier 1 capital treatment.
(g)

Outreach to Minority Communities.—
The Secretary shall require low- and moderate-income community financial institutions receiving capital investments under the Program to provide community outreach and communication, where appropriate, describing the availability and application process of receiving loans made possible by the Program through organizations, trade associations, and individuals that represent or work within or are members of minority communities.
(h)

Restrictions.—
(1)

In general.—
Not later than the end of the 30-day period beginning on the date of enactment of this section, the Secretary shall issue rules setting restrictions on executive compensation, share buybacks, and dividend payments for recipients of capital investments under the Program.
(2)

Conflicts of interest.—
(A)

Definitions.—
In this paragraph:
(i)

Controlling interest.—
The term “controlling interest” means owning, controlling, or holding not less than 20 percent, by vote or value, of the outstanding amount of any class of equity interest in an entity.
(ii)

Covered entity.—
The term “covered entity” means an entity in which a covered individual directly or indirectly holds a controlling interest. For the purpose of determining whether an entity is a covered entity, the securities owned, controlled, or held by 2 or more individuals who are related as described in clause (iii)(II) shall be aggregated.
(iii)

Covered individual.—
The term “covered individual” means—
(I)
the President, the Vice President, the head of an Executive department, or a Member of Congress; and
(II)
the spouse, child, son-in-law, or daughter-in-law, as determined under applicable common law, of an individual described in subclause (i).
(iv)

Executive department.—
The term “Executive department” has the meaning given the term in section 101 of title 5, United States Code.
(v)

Member of congress.—
The term “member of Congress” means a member of the Senate or House of Representatives, a Delegate to the House of Representatives, and the Resident Commissioner from Puerto Rico.
(vi)

Equity interest.—
The term “equity interest” means—
(I)
a share in an entity, without regard to whether the share is—
- (aa)
transferable; or
- (bb)
classified as stock or anything similar;
(II)
a capital or profit interest in a limited liability company or partnership; or
(III)
a warrant or right, other than a right to convert, to purchase, sell, or subscribe to a share or interest described in subclause (I) or (II), respectively.
(B)

Prohibition.—
Notwithstanding any other provision of this section, no covered entity may be eligible for any investment made under the Program.
(C)

Requirement.—
The principal executive officer and the principal financial officer, or individuals performing similar functions, of an entity seeking to receive an investment made under the Program shall, before that investment is approved, certify to the Secretary and the appropriate Federal banking agency or the National Credit Union Administration, as applicable, that the entity is eligible to receive the investment, including that the entity is not a covered entity.
(i)

Ineligibility of Certain Institutions.—
An institution shall be ineligible to participate in the Program if such institution is designated in Troubled Condition by the appropriate Federal banking agency or the National Credit Union Administration, as applicable, or is subject to a formal enforcement action with its primary Federal regulator that addresses unsafe or unsound lending practices.
(j)

Termination of Investment Authority.—
(1)

In general.—
The authority to make new capital investments in low- and moderate-income community financial institutions, including commitments to purchase preferred stock or other instruments, provided under the Program shall terminate on the date that is 6 months after the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.) terminates.
(2)

Rule of construction.—
Nothing in this subsection may be construed to limit any other authority of the Secretary not described in paragraph (1).
(k)

Collection of Data.—
Notwithstanding the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.)—
(1)
any low- and moderate-income community financial institution may collect data described in section 701(a)(1) of that Act (15 U.S.C. 1691(a)(1)) from borrowers and applicants for credit for the sole purpose and exclusive use of monitoring compliance under the plan required under subsection (d)(4); and
(2)
a low- and moderate-income community financial institution that collects the data described in paragraph (1) shall not be subject to adverse action related to that collection by the Bureau of Consumer Financial Protection or any other Federal agency.
(l)

Deposit of Funds.—
All funds received by the Secretary in connection with purchases made pursuant this section, including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be deposited into the Fund and used to provide financial and technical assistance pursuant to section 108, except that subsection (e) of that section shall be waived.
(m)

Direct Appropriation.—
There is appropriated, out of amounts in the Treasury not otherwise appropriated, for fiscal year 2021, $9,000,000,000, to remain available until expended and to be deposited in the Emergency Capital Investment Fund, to carry out this section.
(n)

Administrative Expenses.—
Funds appropriated pursuant to subsection (m) may be used for administrative expenses, including the costs of modifying such investments, and reasonable costs of administering the Program of making, holding, managing, and selling the capital investments.
(o)

Administrative Provisions.—
The Secretary may take such actions as the Secretary determines necessary to carry out the authorities in this section, including the following:
(1)
The Secretary may use the services of any agency or instrumentality of the United States or component thereof on a reimbursable basis, and any such agency or instrumentality or component thereof is authorized to provide services as requested by the Secretary using all authorities vested in or delegated to that agency, instrumentality, or component.
(2)
The Secretary may enter into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.
(3)
The Secretary may designate any bank, savings association, trust company, security broker or dealer, asset manager, or investment adviser as a financial agent of the Federal Government and such institution shall perform all such reasonable duties related to this section as financial agent of the Federal Government as may be required. The Secretary shall have authority to amend existing agreements with financial agents to perform reasonable duties related to this section.
(4)
The Secretary may exercise any rights received in connection with any preferred stock or other financial instruments or assets purchased or acquired pursuant to the authorities granted under this section.
(5)
The Secretary may manage any assets purchased under this section, including revenues and portfolio risks therefrom.
(6)
The Secretary may sell, dispose of, transfer, exchange or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any preferred stock or other financial instrument or asset purchased or acquired under this section, upon terms and conditions and at a price determined by the Secretary.
(7)
The Secretary may manage or prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this section.
(8)
The Secretary may establish and use vehicles to purchase, hold, and sell preferred stock or other financial instruments and issue obligations.
(9)
The Secretary may issue such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this section.
(10)
The Secretary is authorized to use direct hiring authority to hire employees to administer this section.
SEC. 105.
[12 U.S.C. 4704]

APPLICATIONS FOR ASSISTANCE.
(a)

Form and Procedures.—
An application for assistance under this subtitle shall be submitted in such form and in accordance with such procedures as the Fund shall establish.
(b)

Minimum Requirements.—
Except as provided in sections 106 and 113, the Fund shall require an application—
(1)
to establish that the applicant is, or will be, a community development financial institution;
(2)
to include a comprehensive strategic plan for the organization that contains—
(A)
a business plan of not less than 5 years in duration that demonstrates that the applicant will be properly managed and will have the capacity to operate as a community development financial institution that will not be dependent upon assistance from the Fund for continued viability;
(B)
an analysis of the needs of the investment area or targeted population and a strategy for how the applicant will attempt to meet those needs;
(C)
a plan to coordinate use of assistance from the Fund with existing Federal, State, local, and tribal government assistance programs, and private sector financial services;
(D)
an explanation of how the proposed activities of the applicant are consistent with existing economic, community, and housing development plans adopted by or applicable to an investment area or targeted population; and
(E)
a description of how the applicant will coordinate with community organizations and financial institutions which will provide equity investments, loans, secondary markets, or other services to investment areas or targeted populations;
(3)
to include a detailed description of the applicant's plans and likely sources of funds to match the amount of assistance requested from the Fund;
(4)
in the case of an applicant that has previously received assistance under this subtitle, to demonstrate that the applicant—
(A)
has substantially met its performance goals and otherwise carried out its responsibilities under this subtitle and the assistance agreement; and
(B)
will expand its operations into a new investment area or serve a new targeted population, offer more products or services, or increase the volume of its business;
(5)
in the case of an applicant with a prior history of serving investment areas or targeted populations, to demonstrate that the applicant—
(A)
has a record of success in serving investment areas or targeted populations; and
(B)
will expand its operations into a new investment area or to serve a new targeted population, offer more products or services, or increase the volume of its current business; and
(6)
to include such other information as the Fund deems appropriate.
(c)

Preapplication Outreach Program.—
The Fund shall provide an outreach program to identify and provide information to potential applicants and may provide technical assistance to potential applicants, but shall not assist in the preparation of any application.
SEC. 106.
[12 U.S.C. 4705]

COMMUNITY PARTNERSHIPS.
(a)

Application.—
An application for assistance may be filed jointly by a community development financial institution and a community partner to carry out a community partnership.
(b)

Application Requirements.—
The Fund shall require a community partnership application—
(1)
to meet the minimum requirements established for community development financial institutions under section 105(b), except that the criteria specified in paragraphs (1) and (2)(A) of section 105(b) shall not apply to the community partner;
(2)
to describe how each coapplicant will participate in carrying out the community partnership and how the partnership will enhance activities serving the investment area or targeted population; and
(3)
to demonstrate that the community partnership activities are consistent with the strategic plan submitted by the community development financial institution coapplicant.
(c)

Selection Criteria.—
The Fund shall consider a community partnership application based on—
(1)
the community development financial institution coapplicant—
(A)
meeting the minimum selection criteria described in section 105; and
(B)
satisfying the selection criteria of section 107;
(2)
the extent to which the community partner coapplicant will participate in carrying out the partnership;
(3)
the extent to which the community partnership will enhance the likelihood of success of the community development financial institution coapplicant's strategic plan; and
(4)
the extent to which service to the investment area or targeted population will be better performed by a partnership as opposed to the individual community development financial institution coapplicant.
(d)

Limitation on Distribution of Assistance.—
Assistance provided upon approval of an application under this section shall be distributed only to the community development financial institution coapplicant, and shall not be used to fund any activities carried out directly by the community partner or an affiliate or subsidiary thereof.
(e)

Other Requirements and Limitations.—
All other requirements and limitations imposed by this subtitle on a community development financial institution assisted under this subtitle shall apply (in the manner that the Fund determines to be appropriate) to assistance provided to carry out community partnerships. The Fund may establish additional guidelines and restrictions on the use of Federal funds to carry out community partnerships.
SEC. 107.
[12 U.S.C. 4706]

SELECTION OF INSTITUTIONS.
(a)

Selection Criteria.—
Except as provided in section 113, the Fund shall, in its sole discretion, select community development financial institution applicants meeting the requirements of section 105 for assistance based on—
(1)
the likelihood of success of the applicant in meeting the goals of its comprehensive strategic plan;
(2)
the experience and background of the management team;
(3)
the extent of need for equity investments, loans, and development services within the investment areas or targeted populations;
(4)
the extent of economic distress within the investment areas or the extent of need within the targeted populations, as those factors are measured by objective criteria;
(5)
the extent to which the applicant will concentrate its activities on serving its investment areas or targeted populations;
(6)
the amount of firm commitments to meet or exceed the matching requirements and the likely success of the plan for raising the balance of the match;
(7)
the extent to which the matching funds are derived from private sources;
(8)
the extent to which the proposed activities will expand economic opportunities within the investment areas or the targeted populations;
(9)
whether the applicant is, or will become, an insured community development financial institution;
(10)
the extent of support from the investment areas or targeted populations;
(11)
the extent to which the applicant is, or will be, community-owned or community-governed;
(12)
the extent to which the applicant will increase its resources through coordination with other institutions or participation in a secondary market;
(13)
in the case of an applicant with a prior history of serving investment areas or targeted populations, the extent of success in serving them; and
(14)
other factors deemed to be appropriate by the Fund.
(b)

Geographic Diversity.—
In selecting applicants for assistance, the Fund shall seek to fund a geographically diverse group of applicants, which shall include applicants from metropolitan, nonmetropolitan, and rural areas.
SEC. 108.
[12 U.S.C. 4707]

ASSISTANCE PROVIDED BY THE FUND.
(a)

Forms of Assistance.—
(1)

In general.—
The Fund may provide—
(A)
financial assistance through equity investments, deposits, credit union shares, loans, and grants; and
(B)
technical assistance—
(i)
directly;
(ii)
through grants; or
(iii)
by contracting with organizations that possess expertise in community development finance, without regard to whether the organizations receive or are eligible to receive assistance under this subtitle.
(2)

Equity investments.—
(A)

Limitation on equity investments.—
The Fund shall not own more than 50 percent of the equity of a community development financial institution and may not control the operations of such institution. The Fund may hold only transferable, nonvoting equity investments in the institution. Such equity investments may provide for convertibility to voting stock upon transfer by the Fund.
(B)

Fund deemed not to control.—
Notwithstanding any other provision of law, the Fund shall not be deemed to control a community development financial institution by reason of any assistance provided under this subtitle for the purpose of any other applicable law to the extent that the Fund complies with subparagraph (A). Nothing in this subparagraph shall affect the application of any Federal tax law.
(3)

Deposits.—
Deposits made pursuant to this section in an insured community development financial institution shall not be subject to any requirement for collateral or security.
(4)

Limitations on obligations.—
Direct loan obligations may be incurred by the Fund only to the extent that appropriations of budget authority to cover their cost, as defined in section 502(5) of the Congressional Budget Act of 1974, are made in advance.
(b)

Uses of Financial Assistance.—
(1)

In general.—
Financial assistance made available under this subtitle may be used by assisted community development financial institutions to serve investment areas or targeted populations by developing or supporting—
(A)
commercial facilities that promote revitalization, community stability, or job creation or retention;
(B)
businesses that—
(i)
provide jobs for low-income people or are owned by low-income people; or
(ii)
enhance the availability of products and services to low-income people;
(C)
community facilities;
(D)
the provision of basic financial services;
(E)
housing that is principally affordable to low-income people, except that assistance used to facilitate homeownership shall only be used for services and lending products—
(i)
that serve low-income people; and
(ii)
that—
(I)
are not provided by other lenders in the area; or
(II)
complement the services and lending products provided by other lenders that serve the investment area or targeted population; and
(F)
other businesses and activities deemed appropriate by the Fund.
(2)

Limitations.—
No assistance made available under this subtitle may be expended by a community development financial institution (or an organization receiving assistance under section 113) to pay any person to influence or attempt to influence any agency, elected official, officer, or employee of a State or local government in connection with the making, award, extension, continuation, renewal, amendment, or modification of any State or local government contract, grant, loan, or cooperative agreement (as such terms are defined in section 1352 of title 31, United States Code).
(c)

Uses of Technical Assistance.—
(1)

Types of activities.—
Technical assistance may be used for activities that enhance the capacity of a community development financial institution, such as training of management and other personnel and development of programs and investment or loan products.
(2)

Availability of technical assistance.—
The Fund may provide technical assistance, regardless of whether or not the recipient also receives financial assistance under this section.
(d)

Amount of Assistance.—
(1)

In general.—
Except as provided in paragraph (2), the Fund may provide not more than $5,000,000 of assistance, in the aggregate, during any 3-year period to any 1 community development financial institution and its subsidiaries and affiliates.
(2)

Exception.—
The Fund may provide not more than $3,750,000 of assistance in addition to the amount specified in paragraph (1) during the same 3-year period to an existing community development financial institution that proposes to establish a subsidiary or affiliate for the purpose of serving an investment area or targeted population outside of any State and outside of any metropolitan area presently served by the institution, if—
(A)
the subsidiary or affiliate—
(i)
would be a community development financial institution; and
(ii)
independently—
(I)
meets the selection criteria described in section 105; and
(II)
satisfies the selection criteria of section 107; and
(B)
no other application for assistance to serve the investment area or targeted population has been submitted to the Administrator within a reasonable period of time preceding the date of receipt of the application at issue.
(3)

Timing of assistance.—
Assistance may be provided as described in paragraphs (1) and (2) in a lump sum or over a period of time, as determined by the Fund.
(e)

Matching Requirements.—
(1)

In general.—
Assistance other than technical assistance shall be matched with funds from sources other than the Federal Government on the basis of not less than one dollar for each dollar provided by the Fund. Such matching funds shall be at least comparable in form and value to assistance provided by the Fund. The Fund shall provide no assistance (other than technical assistance) until a community development financial institution has secured firm commitments for the matching funds required.
(2)

Exception.—
In the case of an applicant with severe constraints on available sources of matching funds, the Fund may permit an applicant to comply with the matching requirements of paragraph (1) by—
(A)
reducing such matching requirement by 50 percent; or
(B)
permitting an applicant to provide matching funds in a form to be determined at the discretion of the Fund, if such applicant—
(i)
has total assets of less than $100,000;
(ii)
serves nonmetropolitan or rural areas; and
(iii)
is not requesting more than $25,000 in assistance.
(3)

Limitation.—
Not more than 25 percent of the total funds disbursed in any fiscal year by the Fund may be matched as authorized under paragraph (2).
(4)
Construction of “federal government funds”.—For purposes of this subsection, notwithstanding section 105(a)(9) of the Housing and Community Development Act of 1974, funds provided pursuant to such Act shall be considered to be Federal Government funds.
(f)

Terms and Conditions.—
(1)

Soundness of unregulated institutions.—
The Fund shall—
(A)
ensure, to the maximum extent practicable, that each community development financial institution (other than an insured community development financial institution or depository institution holding company) assisted under this subtitle is financially and managerially sound and maintains appropriate internal controls;
(B)
require such institution to submit, not less than once during each 18-month period, a statement of financial condition audited by an independent certified public accountant as part of the report required by section 115(e)(1); and
(C)
require that all assistance granted under this section is used by the community development financial institution or community development partnership in a manner consistent with the purposes of this subtitle.
(2)

Assistance agreement.—
(A)

In general.—
Before providing any assistance under this subtitle, the Fund and each community development financial institution to be assisted shall enter into an agreement that requires the institution to comply with performance goals and abide by other terms and conditions pertinent to assistance received under this subtitle.
(B)

Performance goals.—
Performance goals shall be negotiated between the Fund and each community development financial institution receiving assistance based upon the strategic plan submitted pursuant to section 105(b)(2). Such goals may be modified with the consent of the parties, or as provided in subparagraph (C). Performance goals for insured community development financial institutions shall be determined in consultation with the appropriate Federal banking agency.
(C)

Sanctions.—
The agreement shall provide that, in the event of fraud, mismanagement, noncompliance with this subtitle, or noncompliance with the terms of the agreement, the Fund, in its discretion, may—
(i)
require changes to the performance goals imposed pursuant to subparagraph (B);
(ii)
require changes to the strategic plan submitted pursuant to section 105(b)(2);
(iii)
revoke approval of the application;
(iv)
reduce or terminate assistance;
(v)
require repayment of assistance;
(vi)
bar an applicant from reapplying for assistance from the Fund; and
(vii)
take such other actions as the Fund deems appropriate.
(D)

Consultation with tribal governments.—
In reviewing the performance of any assisted community development financial institution, the investment area of which includes an Indian reservation, or the targeted population of which includes an Indian tribe, the Fund shall consult with, and seek input from, any appropriate tribal government.
(g)

Authority To Sell Equity Investments and Loans.—
The Fund may, at any time, sell its equity investments and loans, but the Fund shall retain the power to enforce limitations on assistance entered into in accordance with the requirements of this subtitle until the performance goals related to the investment or loan have been met.
(h)

No Authority To Limit Supervision and Regulation.—
Nothing in this subtitle shall affect any authority of the appropriate Federal banking agency to supervise and regulate any institution or company.
SEC. 109.
[12 U.S.C. 4708]

TRAINING.
(a)

In General.—
The Fund may operate a training program to increase the capacity and expertise of community development financial institutions and other members of the financial services industry to undertake community development finance activities.
(b)

Program Activities.—
The training program shall provide educational programs to assist community development financial institutions and other members of the financial services industry in developing lending and investment products, underwriting and servicing loans, managing equity investments, and providing development services targeted to areas of economic distress, low-income persons, and persons who lack adequate access to loans and equity investments.
(c)

Participation.—
The training program shall be made available to community development financial institutions and other members of the financial services industry that serve or seek to serve areas of economic distress, low-income persons, and persons who lack adequate access to loans and equity investments.
(d)

Contracting.—
The Fund may offer the training program described in this section directly or through a contract with other organizations. The Fund may contract to provide the training program through organizations that possess special expertise in community development, without regard to whether the organizations receive or are eligible to receive assistance under this subtitle.
(e)

Coordination.—
The Fund shall coordinate with other appropriate Federal departments or agencies that operate similar training programs in order to prevent duplicative efforts.
(f)

Regulatory Fee for Providing Training Services.—
(1)

General rule.—
The Fund may, at the discretion of the Administrator and in accordance with this subsection, assess and collect regulatory fees solely to cover the costs of the Fund in providing training services under a training program operated in accordance with this section.
(2)

Persons subject to fee.—
Fees may be assessed under paragraph (1) only on persons who participate in the training program.
(3)

Limitation on manner of collection.—
Fees may be assessed and collected under this subsection only in such manner as may reasonably be expected to result in the collection of an aggregate amount of fees during any fiscal year which does not exceed the aggregate costs of the Fund for such year in providing training services under a training program operated in accordance with this section
(4)

Limitation on amount of fee.—
The amount of any fee assessed under this subsection on any person may not exceed the amount which is reasonably based on the proportion of the training services provided under a training program operated in accordance with this section which relate to such person.
SEC. 110.
[12 U.S.C. 4709]

ENCOURAGEMENT OF PRIVATE ENTITIES.
The Fund may facilitate the organization of corporations in which the Federal Government has no ownership interest. The purpose of any such entity shall be to assist community development financial institutions in a manner that is complementary to the activities of the Fund under this subtitle. Any such entity shall be managed exclusively by persons not employed by the Federal Government or any agency or instrumentality thereof, or by any State or local government or any agency or instrumentality thereof.
SEC. 111.
[12 U.S.C. 4710]

COLLECTION AND COMPILATION OF INFORMATION.
The Fund shall—
(1)
collect and compile information pertinent to community development financial institutions that will assist in creating, developing, expanding, and preserving such institutions; and
(2)
make such information available to promote the purposes of this subtitle.
SEC. 112.
[12 U.S.C. 4711]

INVESTMENT OF RECEIPTS AND PROCEEDS.
(a)

Establishment of Account.—
Any dividends on equity investments and proceeds from the disposition of investments, deposits, or credit union shares that are received by the Fund as a result of assistance provided pursuant to section 108 or 113, and any fees received pursuant to section 109(f) shall be deposited and accredited to an account of the Fund in the United States Treasury (hereafter in this section referred to as “the account”) established to carry out the purpose of this subtitle.
(b)

Investments.—
Upon request of the Administrator, the Secretary of the Treasury shall invest amounts deposited in the account in public debt securities with maturities suitable to the needs of the Fund, as determined by the Administrator, and bearing interest at rates determined by the Secretary of the Treasury, comparable to current market yields on outstanding marketable obligations of the United States of similar maturities.
(c)

Availability.—
Amounts deposited into the account and interest earned on such amounts pursuant to this section shall be available to the Fund until expended.
SEC. 113.
[12 U.S.C. 4712]

CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.
(a)

Assistance.—
(1)

In general.—
The Fund may provide assistance for the purpose of providing capital to organizations to purchase loans or otherwise enhance the liquidity of community development financial institutions, if—
(A)
the primary purpose of such organizations is to promote community development; and
(B)
any assistance received is matched with funds—
(i)
from sources other than the Federal Government;
(ii)
on the basis of not less than one dollar for each dollar provided by the Fund; and
(iii)
that are comparable in form and value to the assistance provided by the Fund.
(2)

Limitation on other assistance.—
An organization that receives assistance under this section may not receive other financial or technical assistance under this subtitle.
(3)

Construction of federal government funds.—
For purposes of this subsection, notwithstanding section 105(a)(9) of the Housing and Community Development Act of 1974, funds provided pursuant to such Act shall be considered to be Federal Government funds.
(b)

Selection.—
The selection of organizations to receive assistance under this section shall be at the discretion of the Fund and in accordance with criteria established by the Fund. In establishing such criteria, the Fund shall take into account the criteria contained in sections 105(b) and 107, as appropriate.
(c)

Amount of Assistance.—
The Fund may provide a total of not more than $5,000,000 of assistance to an organization or its subsidiaries or affiliates under this section during any 3-year period. Assistance may be provided in a lump sum or over a period of time, as determined by the Fund.
(d)

Audit and Report Requirements.—
Organizations that receive assistance from the Fund in accordance with this section shall—
(1)
submit to the Fund, not less than once in every 18-month period, financial statements audited by an independent certified public accountant, as part of the report required by paragraph (2);
(2)
submit an annual report on its activities; and
(3)
keep such records as may be necessary to disclose the manner in which any assistance under this section is used.
(e)

Limitations on Liability.—
(1)

Liability of fund.—
The liability of the Fund and the United States Government arising out of the provision of assistance to any organization in accordance with this section shall be limited to the amount of such assistance. The Fund shall be exempt from any assessments and any other liabilities that may be imposed on controlling or principal shareholders by any Federal law or the law of any State, or territory. Nothing in this paragraph shall affect the application of Federal tax law.
(2)

Liability of government.—
This section does not oblige the Federal Government, either directly or indirectly, to provide any funds to any organization assisted pursuant to this section, or to honor, reimburse, or otherwise guarantee any obligation or liability of such an organization. This section shall not be construed to imply that any such organization or any obligations or securities of any such organization are backed by the full faith and credit of the United States.
(f)

Use of Proceeds.—
Any proceeds from the sale of loans by an organization assisted under this section shall be used by the seller for community development purposes.
SEC. 114.
[12 U.S.C. 4713]

INCENTIVES FOR DEPOSITORY INSTITUTION PARTICIPATION.
(a)

Function of Administrator.—
(1)

In general.—
Of any funds appropriated pursuant to the authorization in section 121(a), the funds made available for use in carrying out this section in accordance with section 121(a)(4) shall be administered by the Administrator of the Fund, in consultation with—
(A)
the Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act) and the National Credit Union Administration;
(B)
the individuals named pursuant to clauses (ii) and (iv) of section 104(d)(2)(G); and
(C)
any other representatives of insured depository institutions or other persons as the Administrator may determine to be appropriate.
(2)

Applicability of bank enterprise act of 1991.—
Subject to subsection (b) and the consultation requirement of paragraph (1)—
(A)
section 233 of the Bank Enterprise Act of 1991 shall be applicable to the Administrator, for purposes of this section, in the same manner and to the same extent that such section is applicable to the Community Enterprise Assessment Credit Board;
(B)
the Administrator shall, for purposes of carrying out this section and section 233 of the Bank Enterprise Act of 1991—
(i)
have all powers and rights of the Community Enterprise Assessment Credit Board under section 233 of the Bank Enterprise Act of 1991 to administer and enforce any provision of such section 233 which is applicable to the Administrator under this section; and
(ii)
shall be subject to the same duties and restrictions imposed on the Community Enterprise Assessment Credit Board; and
(C)
the Administrator shall—
(i)
have all powers and rights of an appropriate Federal banking agency under section 233(b)(2) of the Bank Enterprise Act of 1991 to approve or disapprove the designation of qualified distressed communities for purposes of this section and provide information and assistance with respect to any such designation; and
(ii)
shall be subject to the same duties imposed on the appropriate Federal banking agencies under such section 233(b)(2).
(3)

Awards.—
The Administrator shall determine the amount of assessment credits, and shall make awards of those credits.
(4)

Regulations and guidelines.—
The Administrator may prescribe such regulations and issue such guidelines as the Administrator determines to be appropriate to carry out this section.
(5)

Exceptions to applicability.—
Notwithstanding paragraphs (1) through (4) of this subsection, subsections (a)(1) and (e)(2) of section 233 of the Bank Enterprise Act of 1991, and any other provision of the Federal Deposit Insurance Act relating to the Bank Enterprise Act of 1991, do not apply to the Administrator for purposes of this subtitle.
(b)

Provisions Relating to Administration of This Section.—
(1)

New lifeline accounts.—
In applying section 233 of the Bank Enterprise Act of 1991 for purposes of this section, the Administrator shall treat the provision of new lifeline accounts by an insured depository institution as an activity which is qualified to be taken into account under section 233(a)(2)(A) of such Act.
(2)

Determination of assessment credit.—
For the purpose of this subtitle, section 233(a)(3) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(3)) shall be applied by substituting the following text:
“(3)

Amount of assessment credit.—
The amount of an assessment credit which may be awarded to an insured depository institution to carry out the qualified activities of the institution or of the subsidiaries of the institution pursuant to this section for any semiannual period shall be equal to the sum of—
“(A)
with respect to qualifying activities described in paragraph (2)(A), the amount which is equal to—
“(i)
5 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is not a community development financial institution; or
“(ii)
15 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is a community development financial institution; and
“(B)
with respect to qualifying activities described in paragraph (2)(C), 15 percent of the amounts determined under such subparagraph.”
.
(3)

Adjustment of percentage.—
Section 233(a)(5) of the Bank Enterprise Act of 1991 shall be applied for purposes of this section by—
(A)
substituting “institutions which are community development financial institutions” for “institutions which meet the community development organization requirements under section 234”; and
(B)
substituting “institutions which are not community development financial institutions” for “institutions which do not meet such requirements”.
(4)

Designation of qdc.—
Section 233(b)(2) of the Bank Enterprise Act of 1991 shall be applied for purposes of this section without regard to subparagraph (A)(ii) of such section 233(b)(2).
(5)

Operation on annual basis.—
The Administrator may, in the Administrator's discretion, apply section 233 of the Bank Enterprise Act of 1991 for purposes of this section by providing community enterprise assessment credits with respect to annual periods rather than semiannual periods.
(6)

Outreach.—
The Administrator shall ensure that information about the Bank Enterprise Act of 1991 under this section is widely disseminated to all interested parties.
(7)

Qualified activities.—
For the purpose of this subtitle, section 233(a)(2)(A) of the Bank Enterprise Act of 1991 shall be applied by inserting “of the increase” after “the amount”.
[Subsection (c) amended other laws.]
SEC. 114A.
[12 U.S.C. 4713a]

GUARANTEES FOR BONDS AND NOTES ISSUED FOR COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES.
(a)

Definitions.—
In this section, the following definitions shall apply:
(1)

Eligible community development financial institution.—
The term “eligible community development financial institution” means a community development financial institution (as described in section 1805.201 of title 12, Code of Federal Regulations, or any successor thereto) certified by the Secretary that has applied to a qualified issuer for, or been granted by a qualified issuer, a loan under the Program.
(2)

Eligible community or economic development purpose.—
The term “eligible community or economic development purpose”—
(A)
means any purpose described in section 108(b); and
(B)
includes the provision of community or economic development in low-income or underserved rural areas.
(3)

Guarantee.—
The term “guarantee” means a written agreement between the Secretary and a qualified issuer (or trustee), pursuant to which the Secretary ensures repayment of the verifiable losses of principal, interest, and call premium, if any, on notes or bonds issued by a qualified issuer to finance or refinance loans to eligible community development financial institutions.
(4)

Loan.—
The term “loan” means any credit instrument that is extended under the Program for any eligible community or economic development purpose.
(5)

Master servicer.—
(A)

In general.—
The term “master servicer” means any entity approved by the Secretary in accordance with subparagraph (B) to oversee the activities of servicers, as provided in subsection (f)(4).
(B)

Approval criteria for master servicers.—
The Secretary shall approve or deny any application to become a master servicer under the Program not later than 90 days after the date on which all required information is submitted to the Secretary, based on the capacity and experience of the applicant in—
(i)
loan administration, servicing, and loan monitoring;
(ii)
managing regional or national loan intake, processing, or servicing operational systems and infrastructure;
(iii)
managing regional or national originator communication systems and infrastructure;
(iv)
developing and implementing training and other risk management strategies on a regional or national basis; and
(v)
compliance monitoring, investor relations, and reporting.
(6)

Program.—
The term “Program” means the guarantee Program for bonds and notes issued for eligible community or economic development purposes established under this section.
(7)

Program administrator.—
The term “Program administrator” means an entity designated by the issuer to perform administrative duties, as provided in subsection (f)(2).
(8)

Qualified issuer.—
(A)

In general.—
The term “qualified issuer” means a community development financial institution (or any entity designated to issue notes or bonds on behalf of such community development financial institution) that meets the qualification requirements of this paragraph.
(B)

Approval criteria for qualified issuers.—
(i)

In general.—
The Secretary shall approve a qualified issuer for a guarantee under the Program in accordance with the requirements of this paragraph, and such additional requirements as the Secretary may establish, by regulation.
(ii)

Terms and qualifications.—
A qualified issuer shall—
(I)
have appropriate expertise, capacity, and experience, or otherwise be qualified to make loans for eligible community or economic development purposes;
(II)
provide to the Secretary—
- (aa)
an acceptable statement of the proposed sources and uses of the funds; and
- (bb)
a capital distribution plan that meets the requirements of subsection (c)(1); and
(III)
certify to the Secretary that the bonds or notes to be guaranteed are to be used for eligible community or economic development purposes.
(C)

Department opinion; timing.—
(i)

Department opinion.—
Not later than 30 days after the date of a request by a qualified issuer for approval of a guarantee under the Program, the Secretary shall provide an opinion regarding compliance by the issuer with the requirements of the Program under this section.
(ii)

Timing.—
The Secretary shall approve or deny a guarantee under this section after consideration of the opinion provided to the Secretary under clause (i), and in no case later than 90 days after receipt of all required information by the Secretary with respect to a request for such guarantee.
(9)

Secretary.—
The term “Secretary” means the Secretary of the Treasury.
(10)

Servicer.—
The term “servicer” means an entity designated by the issuer to perform various servicing duties, as provided in subsection (f)(3).
(b)

Guarantees Authorized.—
The Secretary shall guarantee payments on bonds or notes issued by any qualified issuer, if the proceeds of the bonds or notes are used in accordance with this section to make loans to eligible community development financial institutions—
(1)
for eligible community or economic development purposes; or
(2)
to refinance loans or notes issued for such purposes.
(c)

General Program Requirements.—
(1)

In general.—
A capital distribution plan meets the requirements of this subsection, if not less than 90 percent of the principal amount of guaranteed bonds or notes (other than costs of issuance fees) are used to make loans for any eligible community or economic development purpose, measured annually, beginning at the end of the 1-year period beginning on the issuance date of such guaranteed bonds or notes.
(2)

Relending account.—
Not more than 10 percent of the principal amount of guaranteed bonds or notes, multiplied by an amount equal to the outstanding principal balance of issued notes or bonds, minus the risk-share pool amount under subsection (d), may be held in a relending account and may be made available for new eligible community or economic development purposes.
(3)

Limitations on unpaid principal balances.—
The proceeds of guaranteed bonds or notes under the Program may not be used to pay fees (other than costs of issuance fees), and shall be held in—
(A)
community or economic development loans;
(B)
a relending account, to the extent authorized under paragraph (2); or
(C)
a risk-share pool established under subsection (d).
(4)

Repayment.—
If a qualified issuer fails to meet the requirements of paragraph (1) by the end of the 90-day period beginning at the end of the annual measurement period, repayment shall be made on that portion of bonds or notes necessary to bring the bonds or notes that remain outstanding after such repayment into compliance with the 90 percent requirement of paragraph (1).
(5)

Prohibited uses.—
The Secretary shall, by regulation—
(A)
prohibit, as appropriate, certain uses of amounts from the guarantee of a bond or note under the Program, including the use of such funds for political activities, lobbying, outreach, counseling services, or travel expenses; and
(B)
provide that the guarantee of a bond or note under the Program may not be used for salaries or other administrative costs of—
(i)
the qualified issuer; or
(ii)
any recipient of amounts from the guarantee of a bond or note.
(d)

Risk-Share Pool.—
Each qualified issuer shall, during the term of a guarantee provided under the Program, establish a risk-share pool, capitalized by contributions from eligible community development financial institution participants an amount equal to 3 percent of the guaranteed amount outstanding on the subject notes and bonds.
(e)

Guarantees.—
(1)

In general.—
A guarantee issued under the Program shall—
(A)
be for the full amount of a bond or note, including the amount of principal, interest, and call premiums;
(B)
be fully assignable and transferable to the capital market, on terms and conditions that are consistent with comparable Government-guaranteed bonds, and satisfactory to the Secretary;
(C)
represent the full faith and credit of the United States; and
(D)
not exceed 30 years.
(2)

Limitations.—
(A)

Annual number of guarantees.—
The Secretary shall issue not more than 10 guarantees in any calendar year under the Program.
(B)

Guarantee amount.—
The Secretary may not guarantee any amount under the Program equal to less than $100,000,000, but the total of all such guarantees in any fiscal year may not exceed $1,000,000,000.
(f)

Servicing of Transactions.—
(1)

In general.—
To maximize efficiencies and minimize cost and interest rates, loans made under this section may be serviced by qualified Program administrators, bond servicers, and a master servicer.
(2)

Duties of program administrator.—
The duties of a Program administrator shall include—
(A)
approving and qualifying eligible community development financial institution applications for participation in the Program;
(B)
compliance monitoring;
(C)
bond packaging in connection with the Program; and
(D)
all other duties and related services that are customarily expected of a Program administrator.
(3)

Duties of servicer.—
The duties of a servicer shall include—
(A)
billing and collecting loan payments;
(B)
initiating collection activities on past-due loans;
(C)
transferring loan payments to the master servicing accounts;
(D)
loan administration and servicing;
(E)
systematic and timely reporting of loan performance through remittance and servicing reports;
(F)
proper measurement of annual outstanding loan requirements; and
(G)
all other duties and related services that are customarily expected of servicers.
(4)

Duties of master servicer.—
The duties of a master servicer shall include—
(A)
tracking the movement of funds between the accounts of the master servicer and any other servicer;
(B)
ensuring orderly receipt of the monthly remittance and servicing reports of the servicer;
(C)
monitoring the collection comments and foreclosure actions;
(D)
aggregating the reporting and distribution of funds to trustees and investors;
(E)
removing and replacing a servicer, as necessary;
(F)
loan administration and servicing;
(G)
systematic and timely reporting of loan performance compiled from all bond servicers' reports;
(H)
proper distribution of funds to investors; and
(I)
all other duties and related services that are customarily expected of a master servicer.
(g)

Fees.—
(1)

In general.—
A qualified issuer that receives a guarantee issued under this section on a bond or note shall pay a fee to the Secretary, in an amount equal to 10 basis points of the amount of the unpaid principal of the bond or note guaranteed.
(2)

Payment.—
A qualified issuer shall pay the fee required under this subsection on an annual basis.
(3)

Use of fees.—
Fees collected by the Secretary under this subsection shall be used to reimburse the Department of the Treasury for any administrative costs incurred by the Department in implementing the Program established under this section.
(h)

Authorization of Appropriations.—
(1)

In general.—
There are authorized to be appropriated to the Secretary, such sums as are necessary to carry out this section.
(2)

Use of fees.—
To the extent that the amount of funds appropriated for a fiscal year under paragraph (1) are not sufficient to carry out this section, the Secretary may use the fees collected under subsection (g) for the cost of providing guarantees of bonds and notes under this section.
(i)

Investment in Guaranteed Bonds Ineligible for Community Reinvestment Act Purposes.—
Notwithstanding any other provision of law, any investment by a financial institution in bonds or notes guaranteed under the Program shall not be taken into account in assessing the record of such institution for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901).
(j)

Administration.—
(1)

Regulations.—
Not later than 1 year after the date of enactment of this section, the Secretary shall promulgate regulations to carry out this section.
(2)

Implementation.—
Not later than 2 years after the date of enactment of this section, the Secretary shall implement this section.
(k)

Termination.—
This section is repealed, and the authority provided under this section shall terminate, on September 30, 2014.
SEC. 115.
[12 U.S.C. 4714]

RECORDKEEPING.
(a)

In General.—
A community development financial institution receiving assistance from the Fund shall keep such records, for such periods as may be prescribed by the Fund and necessary to disclose the manner in which any assistance under this subtitle is used and to demonstrate compliance with the requirements of this subtitle.
(b)

User Profile Information.—
The Fund shall require each community development financial institution or other organization receiving assistance from the Fund to compile such data, as is determined to be appropriate by the Fund, on the gender, race, ethnicity, national origin, or other pertinent information concerning individuals that utilize the services of the assisted institution to ensure that targeted populations and low-income residents of investment areas are adequately served.
(c)

Access to Records.—
The Fund shall have access on demand, for the purpose of determining compliance with this subtitle, to any records of a community development financial institution or other organization that receives assistance from the Fund.
(d)

Review.—
Not less than annually, the Fund shall review the progress of each assisted community development financial institution in carrying out its strategic plan, meeting its performance goals, and satisfying the terms and conditions of its assistance agreement.
(e)

Reporting.—
(1)

Annual reports.—
The Fund shall require each community development financial institution receiving assistance under this subtitle to submit an annual report to the Fund on its activities, its financial condition, and its success in meeting performance goals, in satisfying the terms and conditions of its assistance agreement, and in complying with other requirements of this subtitle, in such form and manner as the Fund shall specify.
(2)

Availability of reports.—
The Fund, after deleting or redacting any material as appropriate to protect privacy or proprietary interests, shall make such reports submitted under paragraph (1) available for public inspection.
SEC. 116.
[12 U.S.C. 4715]

SPECIAL PROVISIONS WITH RESPECT TO INSTITUTIONS THAT ARE SUPERVISED BY FEDERAL BANKING AGENCIES.
(a)

Consultation With Appropriate Agencies.—
The Fund shall consult with and consider the views of the appropriate Federal banking agency prior to providing assistance under this subtitle to—
(1)
an insured community development financial institution;
(2)
any community development financial institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency; or
(3)
any community development financial institution that has as its community partner an institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency.
(b)

Requests for Information, Reports, or Records.—
(1)

In general.—
Except as provided in paragraph (4), notwithstanding any other provisions of this subtitle, prior to directly requesting information from or imposing reporting or recordkeeping requirements on an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency, the Fund shall consult with the appropriate Federal banking agency to determine if the information requested is available from or may be obtained by such agency in the form, format, or detail required by the Fund.
(2)

Timing of response from appropriate federal banking agency.—
If the information, reports, or records requested by the Fund pursuant to paragraph (1) are not provided by the appropriate Federal banking agency in less than 15 calendar days after the date on which the material is requested, the Fund may request the information from or impose the recordkeeping or reporting requirements directly on such institutions with notice to the appropriate Federal banking agency.
(3)

Elimination of duplicative information and reporting requirements.—
The Fund shall use any information provided the appropriate Federal banking agency under this section to the extent practicable to eliminate duplicative requests for information and reports from, and recordkeeping by an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency.
(4)

Exception.—
Notwithstanding paragraphs (1) and (2), the Fund may require an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency to provide information with respect to the institution's implementation of its strategic plan or compliance with the terms of its assistance agreement under this subtitle, after providing notice to the appropriate Federal banking agency.
(c)

Exclusion for Examination Reports.—
Nothing in this section shall be construed to permit the Fund to require an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency, to obtain, maintain, or furnish an examination report of any appropriate Federal banking agency or records contained in or related to such a report.
(d)

Sharing of Information.—
The Fund and the appropriate Federal banking agency shall promptly notify each other of material concerns about an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency, and share appropriate information relating to such concerns.
(e)

Disclosure Prohibited.—
Neither the Fund nor the appropriate Federal banking agency shall disclose confidential information obtained pursuant to this section from any party without the written consent of that party.
(f)

Privilege Maintained.—
The Fund, the appropriate Federal banking agency, and any other party providing information under this section shall not be deemed to have waived any privilege applicable to any information or data, or any portion thereof, by providing such information or data to the other party or by permitting such data or information, or any copies or portions thereof, to be used by the other party.
(g)

Exceptions.—
Nothing in this section shall authorize the Fund or the appropriate Federal banking agency to withhold information from the Congress or prevent it from complying with a request for information from a Federal department or agency in compliance with applicable law.
(h)

Sanctions.—
(1)

Notification.—
The Fund shall notify the appropriate Federal banking agency before imposing any sanction pursuant to the authority in section 108(f)(2)(C) on an insured community development financial institution or other institution that is examined by or subject to the reporting requirements of that agency.
(2)

Exceptions.—
The Fund shall not impose a sanction referred to in paragraph (1) if the appropriate Federal banking agency, in writing, not later than 30 calendar days after receiving notice from the Fund—
(A)
objects to the proposed sanction;
(B)
determines that the sanction would—
(i)
have a material adverse effect on the safety and soundness of the institution; or
(ii)
impede or interfere with an enforcement action against that institution by that agency;
(C)
proposes a comparable alternative action; and
(D)
specifically explains—
(i)
the basis for the determination under subparagraph (B) and, if appropriate, provides documentation to support the determination; and
(ii)
how the alternative action suggested pursuant to subparagraph (C) would be as effective as the sanction proposed by the Fund in securing compliance with this subtitle and deterring future noncompliance.
(i)

Safety and Soundness Considerations.—
The Fund and each appropriate Federal banking agency shall cooperate and respond to requests from each other and from other appropriate Federal banking agencies in a manner that ensures the safety and soundness of the insured community development financial institution or other institution that is examined by or subject to the reporting requirements of an appropriate Federal banking agency.
SEC. 117.
[12 U.S.C. 4716]

STUDIES AND REPORTS; EXAMINATION AND AUDIT.
(a)

Annual Report by the Fund.—
The Fund shall conduct an annual evaluation of the activities carried out by the Fund and the community development financial institutions and other organizations assisted pursuant to this subtitle, and shall submit a report of its findings to the President and the Congress not later than 120 days after the end of each fiscal year of the Fund. The report shall include financial statements audited in accordance with subsection (f).
(b)

Optional Studies.—
The Fund may conduct such studies as the Fund determines necessary to further the purpose of this subtitle and to facilitate investment in distressed communities. The findings of any studies conducted pursuant to this subsection shall be included in the report required by subsection (a).
(c)

Native American Lending Study.—
(1)

In general.—
The Fund shall conduct a study on lending and investment practices on Indian reservations and other land held in trust by the United States. Such study shall—
(A)
identify barriers to private financing on such lands; and
(B)
identify the impact of such barriers on access to capital and credit for Native American populations.
(2)

Report.—
Not later than 12 months after the date on which the Administrator is appointed, the Fund shall submit a report to the President and the Congress that—
(A)
contains the findings of the study conducted under paragraph (1);
(B)
recommends any necessary statutory and regulatory changes to existing Federal programs; and
(C)
makes policy recommendations for community development financial institutions, insured depository institutions, secondary market institutions, and other private sector capital institutions to better serve such populations.
(d)

Investment, Governance, and Role of Fund.—
Thirty months after the appointment and qualification of the Administrator, the Comptroller General of the United States shall submit to the President and the Congress a study evaluating the structure, governance, and performance of the Fund.
(e)

Consultation.—
In the conduct of the studies required under this section, the Fund shall consult, as appropriate, with the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Federal Housing Finance Agency, the Farm Credit Administration, the Director of the Office of Thrift Supervision, the National Credit Union Administration Board, Indian tribal governments, community reinvestment organizations, civil rights organizations, consumer organizations, financial organizations, and such representatives of agencies or other persons, at the discretion of the Fund.
(f)

Examination and Audit.—
The financial statements of the Fund shall be audited in accordance with section 9105 of title 31, United States Code, except that audits required by section 9105(a) of such title shall be performed annually.
SEC. 118.

INSPECTOR GENERAL.
(a) * * *
(b)

Authorization of Appropriations.—
There are authorized to be appropriated such sums as may be necessary for the operation of the Office of Inspector General established by the amendments made by subsection (a).
SEC. 119.
[12 U.S.C. 4717]

ENFORCEMENT.
(a)

Regulations.—
(1)

In general.—
Not later than 180 days after the appointment and qualification of the Administrator, the Fund shall promulgate such regulations as may be necessary to carry out this subtitle.
(2)

Regulations required.—
The regulations promulgated under paragraph (1) shall include regulations applicable to community development financial institutions that are not insured depository institutions to—
(A)
prevent conflicts of interest on the part of directors, officers, and employees of community development financial institutions as the Fund determines to be appropriate; and
(B)
establish such standards with respect to loans by a community development financial institution to any director, officer, or employee of such institution as the Fund determines to be appropriate, including loan amount limitations.
(b)

Administrative Enforcement.—
The provisions of this subtitle, and regulations prescribed and agreements entered into under this subtitle, shall be enforced under section 8 of the Federal Deposit Insurance Act by the appropriate Federal banking agency, in the case of an insured community development financial institution. A violation of this subtitle, or any regulation prescribed under or any agreement entered into under this subtitle, shall be treated as a violation of the Federal Deposit Insurance Act.
[Subsection (c) amended another law.]
[Section 120 amended another law.]
SEC. 121.
[12 U.S.C. 4718]

AUTHORIZATION OF APPROPRIATIONS.
(a)

Fund Authorization.—
(1)

In general.—
To carry out this subtitle, there are authorized to be appropriated to the Fund, to remain available until expended—
(A)
$60,000,000 for fiscal year 1995;
(B)
$104,000,000 for fiscal year 1996;
(C)
$107,000,000 for fiscal year 1997; and
(D)
$111,000,000 for fiscal year 1998;
or such greater sums as may be necessary to carry out this subtitle.
(2)

Administrative expenses.—
(A)

In general.—
Of amounts authorized to be appropriated to the Fund pursuant to this section, not more than $5,550,000 may be used by the Fund in each fiscal year to pay the administrative costs and expenses of the Fund. Costs associated with the training program established under section 109 and the technical assistance program established under section 108 shall not be considered to be administrative expenses for purposes of this paragraph.
(B)

Calculations.—
The amounts referred to in paragraphs (3) and (4) shall be calculated after subtracting the amount referred to in subparagraph (A) of this paragraph from the total amount appropriated to the Fund in accordance with paragraph (1) in any fiscal year.
(3)

Capitalization assistance.—
Not more than 5 percent of the amounts authorized to be appropriated under paragraph (1) may be used as provided in section 113.
(4)

Availability for funding section 114.—
33⅓ percent of the amounts appropriated to the Fund for any fiscal year pursuant to the authorization in paragraph (1) shall be available for use in carrying out section 114.
(5)

Support of community development financial institutions.—
The Administrator shall allocate funds authorized under this section, to the maximum extent practicable, for the support of community development financial institutions.
(b)

Community Development Credit Union Revolving Loan Fund.—
There are authorized to be appropriated for the purposes of the Community Development Credit Union Revolving Loan Fund—
(1)
$4,000,000 for fiscal year 1995;
(2)
$2,000,000 for fiscal year 1996;
(3)
$2,000,000 for fiscal year 1997; and
(4)
$2,000,000 for fiscal year 1998.
(c)

Budgetary Treatment.—
Amounts authorized to be appropriated under this section shall be subject to discretionary spending caps, as provided in section 601 of the Congressional Budget Act of 1974, and therefore shall reduce by an equal amount funds made available for other discretionary spending programs.
SEC. 122.
[12 U.S.C. 4719]

GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.
(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 dollar 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 dollar loan programs; and
(2)
to encourage community development financial institutions to establish and maintain small dollar loan programs that would help give consumers access to mainstream financial institutions and combat high cost small dollar lending.
(b)

Grants.—
(1)

Loan-loss reserve fund grants.—
The Fund shall make grants to community development financial institutions or to any partnership between such community development financial institutions and any other federally insured depository institution with a primary mission to serve targeted investment areas, as such areas are defined under section 103(16), to enable such institutions or any partnership of such institutions to establish a loan-loss reserve fund in order to defray the costs of a small dollar loan program established or maintained by such institution.
(2)

Matching requirement.—
A community development financial institution or any partnership of institutions established pursuant to paragraph (1) shall provide non-Federal matching funds in an amount equal to 50 percent of the amount of any grant received under this section.
(3)

Use of funds.—
Any grant amounts received by a community development financial institution or any partnership between or among such institutions under paragraph (1)—
(A)
may not be used by such institution to provide direct loans to consumers;
(B)
may be used by such institution to help recapture a portion or all of a defaulted loan made under the small dollar loan program of such institution; and
(C)
may be used to designate and utilize a fiscal agent for services normally provided by such an agent.
(4)

Technical assistance grants.—
The Fund shall make technical assistance grants to community development financial institutions or any partnership between or among such institutions to support and maintain a small dollar loan program. Any grant amounts received under this paragraph may be used for technology, staff support, and other costs associated with establishing a small dollar loan program.
(c)

Definitions.—
For purposes of this section—
(1)
the term “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis” has the same meaning given such term in section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)); and
(2)
the term “small dollar loan program” means a loan program wherein a community development financial institution or any partnership between or among such institutions offers loans to consumers that—
(A)
are made in amounts not exceeding $2,500;
(B)
must be repaid in installments;
(C)
have no pre-payment penalty;
(D)
the institution has to report payments regarding the loan to at least 1 of the consumer reporting agencies that compiles and maintains files on consumers on a nationwide basis; and
(E)
meet any other affordability requirements as may be established by the Administrator.
Subtitle B—

Home Ownership and Equity Protection5
^5
Sections 152 through 154 amended other laws. Section 151 provided that this subtitle may be cited as the “Homeownership and Equity Protection Act of 1994”.
* * * * * * *
SEC. 155.
[15 U.S.C. 1602 nt]

REGULATIONS.
Not later than 180 days after the date of enactment of this Act,6 the Board of Governors of the Federal Reserve System shall issue such regulations as may be necessary to carry out this subtitle, and such regulations shall become effective on the date on which disclosure regulations are required to become effective under section 105(d) of the Truth in Lending Act.
^6
Such date of enactment was September 23, 1994.
SEC. 156.
[15 U.S.C. 1602 nt]

APPLICABILITY.
This subtitle, and the amendments made by this subtitle, shall apply to every mortgage referred to in section 103(aa) of the Truth in Lending Act (as added by section 152(a) of this Act) consummated on or after the date on which regulations issued under section 155 become effective.
SEC. 157.
[15 U.S.C. 1601 nt]

FEDERAL RESERVE STUDY.
During the period beginning 180 days after the date of enactment of this Act and ending 2 years after that date of enactment, the Board of Governors of the Federal Reserve System shall conduct a study and submit to the Congress a report, including recommendations for any appropriate legislation, regarding—
(1)
whether a consumer engaging in an open end credit transaction (as defined in section 103 of the Truth in Lending Act) secured by the consumer's principal dwelling is provided adequate protections under Federal law, including section 127A of the Truth in Lending Act; and
(2)
whether a more appropriate interest rate index exists for purposes of subparagraph (A) of section 103(aa)(1) of the Truth in Lending Act (as added by section 152(a) of this Act) than the yield on Treasury securities referred to in that subparagraph.
SEC. 158.
[15 U.S.C. 1601 nt]

HEARINGS ON HOME EQUITY LENDING.
(a)

Hearings.—
Not less than once during the 3-year period beginning on the date of enactment of this Act, and regularly thereafter, the Bureau, in consultation with the Advisory Board to the Bureau, shall conduct a public hearing to examine the home equity loan market and the adequacy of existing regulatory and legislative provisions and the provisions of this subtitle in protecting the interests of consumers, and low-income consumers in particular.
(b)

Participation.—
In conducting hearings required by subsection (a), the Bureau shall solicit participation from consumers, representatives of consumers, lenders, and other interested parties.
Subtitle C—

Microenterprise Technical Assistance and Capacity Building Program
SEC. 171.

SHORT TITLE.
This subtitle may be cited as the “Program for Investment in Microentrepreneurs Act of 1999”, also referred to as the “PRIME Act”.
SEC. 172.

DEFINITIONS.
For purposes of this subtitle, the following definitions shall apply:
(1)

Administration.—
The term “Administration” means the Small Business Administration.
(2)

Administrator.—
The term “Administrator” means the Administrator of the Small Business Administration.
(3)

Capacity building services.—
The term “capacity building services” means services provided to an organization that is, or that is in the process of becoming, a microenterprise development organization or program, for the purpose of enhancing its ability to provide training and services to disadvantaged entrepreneurs.
(4)

Collaborative.—
The term “collaborative” means 2 or more nonprofit entities that agree to act jointly as a qualified organization under this subtitle.
(5)

Disadvantaged entrepreneur.—
The term “disadvantaged entrepreneur” means a microentrepreneur that is—
(A)
a low-income person;
(B)
a very low-income person; or
(C)
an entrepreneur that lacks adequate access to capital or other resources essential for business success, or is economically disadvantaged, as determined by the Administrator.
(6)

Indian tribe.—
The term “Indian tribe” has the meaning given the term in section 103.
(7)

Intermediary.—
The term “intermediary” means a private, nonprofit entity that seeks to serve microenterprise development organizations and programs as authorized under section 175.
(8)

Low-income person.—
The term “low-income person” has the meaning given the term in section 103.
(9)

Microentrepreneur.—
The term “microentrepreneur” means the owner or developer of a microenterprise.
(10)

Microenterprise.—
The term “microenterprise” means a sole proprietorship, partnership, or corporation that—
(A)
has fewer than 5 employees; and
(B)
generally lacks access to conventional loans, equity, or other banking services.
(11)

Microenterprise development organization or program.—
The term “microenterprise development organization or program” means a nonprofit entity, or a program administered by such an entity, including community development corporations or other nonprofit development organizations and social service organizations, that provides services to disadvantaged entrepreneurs.
(12)

Training and technical assistance.—
The term “training and technical assistance” means services and support provided to disadvantaged entrepreneurs, such as assistance for the purpose of enhancing business planning, marketing, management, financial management skills, and assistance for the purpose of accessing financial services.
(13)

Very low-income person.—
The term “very low-income person” means having an income, adjusted for family size, of not more than 150 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by that section).
SEC. 173.

ESTABLISHMENT OF PROGRAM.
The Administrator shall establish a microenterprise technical assistance and capacity building grant program to provide assistance from the Administration in the form of grants to qualified organizations in accordance with this subtitle.
SEC. 174.

USES OF ASSISTANCE.
A qualified organization shall use grants made under this subtitle—
(1)
to provide training and technical assistance to disadvantaged entrepreneurs;
(2)
to provide training and capacity building services to microenterprise development organizations and programs and groups of such organizations to assist such organizations and programs in developing microenterprise training and services;
(3)
to aid in researching and developing the best practices in the field of microenterprise and technical assistance programs for disadvantaged entrepreneurs; and
(4)
for such other activities as the Administrator determines are consistent with the purposes of this subtitle.
SEC. 175.

QUALIFIED ORGANIZATIONS.
For purposes of eligibility for assistance under this subtitle, a qualified organization shall be—
(1)
a nonprofit microenterprise development organization or program (or a group or collaborative thereof) that has a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs;
(2)
an intermediary;
(3)
a microenterprise development organization or program that is accountable to a local community, working in conjunction with a State or local government or Indian tribe; or
(4)
an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction.
SEC. 176.

ALLOCATION OF ASSISTANCE; SUBGRANTS.
(a)

Allocation of Assistance.—
(1)

In general.—
The Administrator shall allocate assistance from the Administration under this subtitle to ensure that—
(A)
activities described in section 174(1) are funded using not less than 75 percent of amounts made available for such assistance; and
(B)
activities described in section 174(2) are funded using not less than 15 percent of amounts made available for such assistance.
(2)

Limit on individual assistance.—
No single person may receive more than 10 percent of the total funds appropriated under this subtitle in a single fiscal year.
(b)

Targeted Assistance.—
The Administrator shall ensure that not less than 50 percent of the grants made under this subtitle are used to benefit very low-income persons, including those residing on Indian reservations.
(c)

Subgrants Authorized.—
(1)

In general.—
A qualified organization receiving assistance under this subtitle may provide grants using that assistance to qualified small and emerging microenterprise organizations and programs, subject to such rules and regulations as the Administrator determines to be appropriate.
(2)

Limit on administrative expenses.—
Not more than 7.5 percent of assistance received by a qualified organization under this subtitle may be used for administrative expenses in connection with the making of subgrants under paragraph (1).
(d)

Diversity.—
In making grants under this subtitle, the Administrator shall ensure that grant recipients include both large and small microenterprise organizations, serving urban, rural, and Indian tribal communities serving diverse populations.
(e)

Prohibition on Preferential Consideration of Certain SBA Program Participants.—
In making grants under this subtitle, the Administrator shall ensure that any application made by a qualified organization that is a participant in the program established under section 7(m) of the Small Business Act does not receive preferential consideration over applications from other qualified organizations that are not participants in such program.
SEC. 177.

MATCHING REQUIREMENTS.
(a)

In General.—
Financial assistance under this subtitle shall be matched with funds from sources other than the Federal Government on the basis of not less than 50 percent of each dollar provided by the Administration.
(b)

Sources of Matching Funds.—
Fees, grants, gifts, funds from loan sources, and in-kind resources of a grant recipient from public or private sources may be used to comply with the matching requirement in subsection (a).
(c)

Exception.—
(1)

In general.—
In the case of an applicant for assistance under this subtitle with severe constraints on available sources of matching funds, the Administrator may reduce or eliminate the matching requirements of subsection (a).
(2)

Limitation.—
Not more than 10 percent of the total funds made available from the Administration in any fiscal year to carry out this subtitle may be excepted from the matching requirements of subsection (a), as authorized by paragraph (1) of this subsection.
SEC. 178.

APPLICATIONS FOR ASSISTANCE.
An application for assistance under this subtitle shall be submitted in such form and in accordance with such procedures as the Administrator shall establish.
SEC. 179.

RECORDKEEPING.
The requirements of section 115 shall apply to a qualified organization receiving assistance from the Administration under this subtitle as if it were a community development financial institution receiving assistance from the Fund under subtitle A.
SEC. 180.

AUTHORIZATION.
In addition to funds otherwise authorized to be appropriated to the Fund to carry out this title, there are authorized to be appropriated to the Administrator to carry out this subtitle—
(1)
$15,000,000 for fiscal year 2000;
(2)
$15,000,000 for fiscal year 2001;
(3)
$15,000,000 for fiscal year 2002; and
(4)
$15,000,000 for fiscal year 2003.
SEC. 181.

IMPLEMENTATION.
The Administrator shall, by regulation, establish such requirements as may be necessary to carry out this subtitle.
TITLE II—

SMALL BUSINESS CAPITAL FORMATION
Subtitle A—

Small Business Loan Securitization
SEC. 201.
[15 U.S.C. 78a nt]

SHORT TITLE.
This subtitle may be cited as the “Small Business Loan Securitization and Secondary Market Enhancement Act of 1994”.
[Sections 202 through 207 amended other laws.]
SEC. 208.
[12 U.S.C. 1835]

INSURED DEPOSITORY INSTITUTION CAPITAL REQUIREMENTS FOR TRANSFERS OF SMALL BUSINESS OBLIGATIONS.
(a)

Accounting Principles.—
The accounting principles applicable to the transfer of a small business loan or a lease of personal property with recourse contained in reports or statements required to be filed with Federal banking agencies by a qualified insured depository institution shall be consistent with generally accepted accounting principles.
(b)

Capital and Reserve Requirements.—
With respect to the transfer of a small business loan or lease of personal property with recourse that is a sale under generally accepted accounting principles, each qualified insured depository institution shall—
(1)
establish and maintain a reserve equal to an amount sufficient to meet the reasonable estimated liability of the institution under the recourse arrangement; and
(2)
include, for purposes of applicable capital standards and other capital measures, only the amount of the retained recourse in the risk-weighted assets of the institution.
(c)

Qualified Institutions Criteria.—
An insured depository institution is a qualified insured depository institution for purposes of this section if, without regard to the accounting principles or capital requirements referred to in subsections (a) and (b), the institution is—
(1)
well capitalized; or
(2)
with the approval, by regulation or order, of the appropriate Federal banking agency, adequately capitalized.
(d)

Aggregate Amount of Recourse.—
The total outstanding amount of recourse retained by a qualified insured depository institution with respect to transfers of small business loans and leases of personal property under subsections (a) and (b) shall not exceed—
(1)
15 percent of the risk-based capital of the institution; or
(2)
such greater amount, as established by the appropriate Federal banking agency by regulation or order.
(e)

Institutions That Cease To Be Qualified or Exceed Aggregate Limits.—
If an insured depository institution ceases to be a qualified insured depository institution or exceeds the limits under subsection (d), this section shall remain applicable to any transfers of small business loans or leases of personal property that occurred during the time that the institution was qualified and did not exceed such limit.
(f)

Prompt Corrective Action Not Affected.—
The capital of an insured depository institution shall be computed without regard to this section in determining whether the institution is adequately capitalized, undercapitalized, significantly undercapitalized, or critically undercapitalized under section 38 of the Federal Deposit Insurance Act.
(g)

Regulations Required.—
Not later than 180 days after the date of enactment of this Act each appropriate Federal banking agency shall promulgate final regulations implementing this section.
(h)

Alternative System Permitted.—
(1)

In general.—
At the discretion of the appropriate Federal banking agency, this section shall not apply if the regulations of the agency provide that the aggregate amount of capital and reserves required with respect to the transfer of small business loans and leases of personal property with recourse does not exceed the aggregate amount of capital and reserves that would be required under subsection (b).
(2)

Existing transactions not affected.—
Notwithstanding paragraph (1), this section shall remain in effect with respect to transfers of small business loans and leases of personal property with recourse by qualified insured depository institutions occurring before the effective date of regulations referred to in paragraph (1).
(i)

Definitions.—
For purposes of this section—
(1)
the term “adequately capitalized” has the same meaning as in section 38(b) of the Federal Deposit Insurance Act;
(2)
the term “appropriate Federal banking agency” has the same meaning as in section 3 of the Federal Deposit Insurance Act;
(3)
the term “capital standards” has the same meaning as in section 38(c) of the Federal Deposit Insurance Act;
(4)
the term “Federal banking agencies” has the same meaning as in section 3 of the Federal Deposit Insurance Act;
(5)
the term “insured depository institution” has the same meaning as in section 3 of the Federal Deposit Insurance Act;
(6)
the term “other capital measures” has the meaning as in section 38(c) of the Federal Deposit Insurance Act;
(7)
the term “recourse” has the meaning given to such term under generally accepted accounting principles;
(8)
the term “small business” means a business that meets the criteria for a small business concern established by the Small Business Administration under section 3(a) of the Small Business Act; and
(9)
the term “well capitalized” has the same meaning as in section 38(b) of the Federal Deposit Insurance Act.
SEC. 209.
[15 U.S.C. 78b nt]

JOINT STUDY ON THE IMPACT OF ADDITIONAL SECURITIES BASED ON POOLED OBLIGATIONS.
(a)

Joint Study Required.—
The Board and the Commission shall conduct a joint study of the impact of the provisions of this subtitle (including the amendments made by this subtitle) on the credit and securities markets. Such study shall evaluate—
(1)
the impact of the provisions of this subtitle on the availability of credit for business and commercial enterprises in general, and the availability of credit in particular for—
(A)
businesses in low- and moderate-income areas;
(B)
businesses owned by women and minorities;
(C)
community development efforts;
(D)
community development financial institutions;
(E)
businesses in different geographical regions; and
(F)
a diversity of types of businesses;
(2)
the structure and operation of the markets that develop for small business related securities and commercial mortgage related securities, including the types of entities (such as pension funds and insurance companies) that are significant purchasers of such securities, the extent to which such entities are sophisticated investors, the use of credit enhancements in obtaining investment-grade ratings, any conflicts of interest that arise in such markets, and any adverse effects of such markets on commercial real estate ventures, pension funds, or pension fund beneficiaries;
(3)
the extent to which the provisions of this subtitle with regard to margin requirements, the number of eligible investment rating categories, preemption of State law, and the treatment of such securities as government securities for the purpose of State investment limitations, affect the structure and operation of such markets; and
(4)
in view of the findings made pursuant to paragraphs (2) and (3), any additional suitability or disclosure requirements or other investor protections that should be required.
(b)

Reports.—
(1)

In general.—
The Board and the Commission shall submit to the Congress a report on the results of the study required by subsection (a) before the end of—
(A)
the 2-year period beginning on the date of enactment of this Act;
(B)
the 4-year period beginning on such date of enactment; and
(C)
the 6-year period beginning on such date of enactment.
(2)

Contents of report.—
Each report required under paragraph (1) shall contain or be accompanied by such recommendations for administrative or legislative action as the Board and the Commission consider appropriate and may include recommendations regarding the need to develop a system for reporting additional information concerning investments by the entities described in subsection (a)(2).
(c)

Definitions.—
As used in this section—
(1)
the term “Board” means the Board of Governors of the Federal Reserve System; and
(2)
the term “Commission” means the Securities and Exchange Commission.
SEC. 210.
[12 U.S.C. 3305 nt]

CONSISTENT USE OF FINANCIAL TERMINOLOGY.
Not later than 2 years after the date of enactment of this Act, the Financial Institutions Examination Council shall report to the Congress on its recommendations for the use of consistent financial terminology by depository institutions for small business loans or leases of personal property which are sold for the creation of small business related securities (as defined in section 3(a)(53)(A) of the Securities Exchange Act of 1934).
Subtitle B—

Small Business Capital Enhancement
SEC. 251.
[12 U.S.C. 4741]

FINDINGS AND PURPOSES.
(a)

Findings.—
The Congress finds that—
(1)
small business concerns are a vital part of the economy, accounting for the majority of new jobs, new products, and new services created in the United States;
(2)
adequate access to debt capital is a critical component for small business development, productivity, expansion, and success in the United States;
(3)
commercial banks are the most important suppliers of debt capital to small business concerns in the United States;
(4)
commercial banks and other depository institutions have various incentives to minimize their risk in financing small business concerns;
(5)
as a result of such incentives, many small business concerns with economically sound financing needs are unable to obtain access to needed debt capital;
(6)
the small business capital access programs implemented by certain States are a flexible and efficient tool to assist financial institutions in providing access to needed debt capital for many small business concerns in a manner consistent with safety and soundness regulations;
(7)
a small business capital access program would complement other programs which assist small business concerns in obtaining access to capital; and
(8)
Federal policy can stimulate and accelerate efforts by States to implement small business capital access programs by providing an incentive to States, while leaving the administration of such programs to each participating State.
(b)

Purposes.—
By encouraging States to implement administratively efficient capital access programs that encourage commercial banks and other depository institutions to provide access to debt capital for a broad portfolio of small business concerns, and thereby promote a more efficient and effective debt market, the purposes of this subtitle are—
(1)
to promote economic opportunity and growth;
(2)
to create jobs;
(3)
to promote economic efficiency;
(4)
to enhance productivity; and
(5)
to spur innovation.
SEC. 252.
[12 U.S.C. 4742]

DEFINITIONS.
For purposes of this subtitle—
(1)
the term “Fund” means the Community Development Financial Institutions Fund established under section 104;
(2)
the term “appropriate Federal banking agency”—
(A)
has the same meaning as in section 3 of the Federal Deposit Insurance Act; and
(B)
includes the National Credit Union Administration Board in the case of any credit union the deposits of which are insured in accordance with the Federal Credit Union Act;
(3)
the term “early loan” means a loan enrolled at a time when the aggregate covered amount of loans previously enrolled under the Program by a particular participating financial institution is less than $5,000,000;
(4)
the term “enrolled loan” means a loan made by a participating financial institution that is enrolled by a participating State in accordance with this subtitle;
(5)
the term “financial institution” means any federally chartered or State-chartered commercial bank, savings association, savings bank, or credit union;
(6)
the term “participating financial institution” means any financial institution that has entered into a participation agreement with a participating State in accordance with section 254;
(7)
the term “participating State” means any State that has been approved for participation in the Program in accordance with section 253;
(8)
the term “passive real estate ownership” means ownership of real estate for the purpose of deriving income from speculation, trade, or rental, except that such term shall not include—
(A)
the ownership of that portion of real estate being used or intended to be used for the operation of the business of the owner of the real estate (other than the business of passive ownership of real estate); or
(B)
the ownership of real estate for the purpose of construction or renovation, until the completion of the construction or renovation phase;
(9)
the term “Program” means the Small Business Capital Enhancement Program established under this subtitle;
(10)
the term “reserve fund” means a fund, established by a participating State, earmarked for a particular participating financial institution, for the purposes of—
(A)
depositing all required premium charges paid by the participating financial institution and by each borrower receiving a loan under the Program from a participating financial institution;
(B)
depositing contributions made by the participating State; and
(C)
covering losses on enrolled loans by disbursing accumulated funds; and
(11)
the term “State” means—
(A)
a State of the United States;
(B)
the District of Columbia;
(C)
any political subdivision of a State of the United States, which subdivision has a population in excess of the population of the least populated State of the United States; and
(D)
any other political subdivision of a State of the United States that the Fund determines has the capacity to participate in the program.
SEC. 253.
[12 U.S.C. 4743]

APPROVING STATES FOR PARTICIPATION.
(a)

Application.—
Any State may apply to the Fund for approval to be a participating State under the Program and to be eligible for reimbursement by the Fund pursuant to section 257.
(b)

Approval Criteria.—
The Fund shall approve a State to be a participating State, if—
(1)
a specific department or agency of the State has been designated to implement the Program;
(2)
all legal actions necessary to enable such designated department or agency to implement the Program have been accomplished;
(3)
funds in the amount of at least $1 for every 2 people residing in the State (as of the last decennial census for which data have been released) are available and have been legally committed to contributions by the State to reserve funds, with such funds being available without time limit and without requiring additional legal action, except that such requirements shall not be construed to limit the authority of the State to take action at a later time that results in the termination of its obligation to enroll loans and make contributions to reserve funds;
(4)
the State has prescribed a form of participation agreement to be entered into between it and each participating financial institution that is consistent with the requirements and purposes of this subtitle; and
(5)
the State and the Fund have executed a reimbursement agreement that conforms to the requirements of this subtitle.
(c)

Existing State Programs.—
(1)

In general.—
A State that is not a participating State, but that has its own capital access program providing portfolio insurance for business loans (based on a separate loss reserve fund for each financial institution), may apply at any time to the Fund to be approved to be a participating State. The Fund shall approve such State to be a participating State, and to be eligible for reimbursements by the Fund pursuant to section 257, if the State—
(A)
satisfies the requirements of subsections (a) and (b); and
(B)
certifies that each affected financial institution has satisfied the requirements of section 254.
(2)

Applicable terms of participation.—
(A)

Status of institutions.—
If a State is approved for participation under paragraph (1), each financial institution with a participation agreement in effect with the participating State shall immediately be considered a participating financial institution. Reimbursements may be made under section 237 in connection with all contributions made to the reserve fund by the State in connection with lending that occurs on or after the date on which the Fund approves the State for participation.
(B)

Effective date of participation.—
If an amended participation agreement that conforms with section 255 is required in order to secure participation approval by the Fund, contributions subject to reimbursement under section 257 shall include only those contributions made to a reserve fund with respect to loans enrolled on or after the date that an amended participation agreement between the participating State and the participating financial institution becomes effective.
(C)

Use of accumulated reserve funds.—
A State that is approved for participation in accordance with this subsection may continue to implement the program utilizing the reserve funds accumulated under the State program.
(d)

Prior Appropriations Requirement.—
The Fund shall not approve a State for participation in the Program until at least $50,000,000 has been appropriated to the Fund (subject to an appropriations Act), without fiscal year limitation, for the purpose of making reimbursements pursuant to section 257 and otherwise carrying out this subtitle.
(e)

Amendments to Agreements.—
If a State that has been approved to be a participating State wishes to amend its form of participation agreement and continue to be a participating State, such State shall submit such amendment for review by the Fund in accordance with subsection (b)(4). Any such amendment shall become effective only after it has been approved by the Fund.
SEC. 254.
[12 U.S.C. 4744]

PARTICIPATION AGREEMENTS.
(a)

In General.—
A participating State may enter into a participation agreement with any financial institution determined by the participating State, after consultation with the appropriate Federal banking agency, to have sufficient commercial lending experience and financial and managerial capacity to participate in the Program. The determination by the State shall not be reviewable by the Fund.
(b)

Participating Financial Institutions.—
Upon entering into the participation agreement with the participating State, the financial institution shall become a participating financial institution eligible to enroll loans under the Program.
SEC. 255.
[12 U.S.C. 4745]

TERMS OF PARTICIPATION AGREEMENTS.
(a)

In General.—
The participation agreement to be entered into by a participating State and a participating financial institution shall include all provisions required by this section, and shall not include any provisions inconsistent with the provisions of this section.
(b)

Establishment of Separate Reserve Funds.—
A separate reserve fund shall be established by the participating State for each participating financial institution. All funds credited to a reserve fund shall be the exclusive property of the participating State. Each reserve fund shall be an administrative account for the purposes of—
(1)
receiving all required premium charges to be paid by the borrower and participating financial institution and contributions by the participating State; and
(2)
disbursing funds, either to cover losses sustained by the participating financial institution in connection with loans made under the Program, or as contemplated by subsections (d) and (r).
(c)

Investment Authority.—
Subject to applicable State law, the participating State may invest, or cause to be invested, funds held in a reserve fund by establishing a deposit account at the participating financial institution in the name of the participating State. In the event that funds in the reserve fund are not deposited in such an account, such funds shall be invested in a form that the participating State determines is safe and liquid.
(d)

Earned Income and Interest.—
Interest or income earned on the funds credited to a reserve fund shall be deemed to be part of the reserve fund, except that a participating State may, as further specified in the participation agreement, provide authority for the participating State to withdraw some or all of such interest or income earned.
(e)

Loan Terms and Conditions.—
(1)

In general.—
A loan to be filed for enrollment under the Program may be made with such interest rate, fees, and other terms and conditions as agreed upon by the participating financial institution and the borrower, consistent with applicable law.
(2)

Lines of credit.—
If a loan to be filed for enrollment is in the form of a line of credit, the amount of the loan shall be considered to be the maximum amount that can be drawn by the borrower against the line of credit.
(f)

Enrollment Process.—
(1)

Filing.—
(A)

In general.—
A participating financial institution shall file each loan made under the Program for enrollment by completing and submitting to the participating State a form prescribed by the participating State.
(B)

Form.—
The form referred to in subparagraph (A) shall include a representation by the participating financial institution that it has complied with the participation agreement in enrolling the loan with the State.
(C)

Premium charges.—
Accompanying the completed form shall be the nonrefundable premium charges paid by the borrower and the participating financial institution, or evidence that such premium charges have been deposited into the deposit account containing the reserve fund, if applicable.
(D)

Submission.—
The participation agreement shall require that the items required by this subsection shall be submitted to the participating State by the participating financial institutions not later than 10 calendar days after a loan is made.
(2)

Enrollment by state.—
Upon receipt by the participating State of the filing submitted in accordance with paragraph (1), the participating State shall promptly enroll the loan and make a matching contribution to the reserve fund in accordance with subsection (j), unless the information submitted indicates that the participating financial institution has not complied with the participation agreement in enrolling the loan.
(g)

Coverage Amount.—
In filing a loan for enrollment under the Program, the participating financial institution may specify an amount to be covered under the Program that is less than the full amount of the loan.
(h)

Premium Charges.—
(1)

Minimum and maximum amounts.—
The premium charges payable to the reserve fund by the borrower and the participating financial institution shall be prescribed by the participating financial institution, within minimum and maximum limits set forth in the participation agreement. The participation agreement shall establish minimum and maximum limits whereby the sum of the premium charges paid in connection with a loan by the borrower and the participating financial institution is not less than 3 percent nor more than 7 percent of the amount of the loan covered under the Program.
(2)

Allocation of premium charges.—
The participation agreement shall specify terms for allocating premium charges between the borrower and the participating financial institution. However, if the participating financial institution is required to pay any of the premium charges, the participation agreement shall authorize the participating financial institution to recover from the borrower the cost of the payment of the participating financial institution, in any manner on which the participating financial institution and the borrower agree.
(i)

Restrictions.—
(1)

Actions prohibited.—
Except as provided in subsection (h) and paragraph (2) of this subsection, the participating State may not—
(A)
impose any restrictions or requirements, relating to the interest rate, fees, collateral, or other business terms and conditions of the loan; or
(B)
condition enrollment of a loan in the Program on the review by the State of the risk or creditworthiness of a loan.
(2)

Effect on other law.—
Nothing in this subtitle shall affect the applicability of any other law to the conduct by a participating financial institution of its business.
(j)

State Contributions.—
In enrolling a loan under the Program, the participating State shall contribute to the reserve fund an amount, as provided for in the participation agreement, which shall not be less than the sum of the amount of premium charges paid by the borrower and the participating financial institution.
(k)

Elements of Claims.—
(1)

Filing.—
If a participating financial institution charges off all or part of an enrolled loan, such participating financial institution may file a claim for reimbursement with the participating State by submitting a form that—
(A)
includes the representation by the participating financial institution that it is filing the claim in accordance with the terms of the applicable participation agreement; and
(B)
contains such other information as may be required by the participating State.
(2)

Timing.—
Any claim filed under paragraph (1) shall be filed contemporaneously with the action of the participating financial institution to charge off all or part of an enrolled loan. The participating financial institution shall determine when and how much to charge off on an enrolled loan, in a manner consistent with its usual method for making such determinations on business loans that are not enrolled loans under this subtitle.
(l)

Elements of Claims.—
A claim filed by a participating financial institution may include the amount of principal charged off, not to exceed the covered amount of the loan. Such claim may also include accrued interest and out-of-pocket expenses, if and to the extent provided for under the participation agreement.
(m)

Payment of Claims.—
(1)

In general.—
Except as provided in subsection (n) and paragraph (2) of this subsection, upon receipt of a claim filed in accordance with this section and the participation agreement, the participating State shall promptly pay to the participating financial institution, from funds in the reserve fund, the full amount of the claim as submitted.
(2)

Insufficient reserve funds.—
If there are insufficient funds in the reserve fund to cover the entire amount of a claim of a participating financial institution, the participating State shall pay to the participating financial institution an amount equal to the current balance in the reserve fund. If the enrolled loan for which the claim has been filed—
(A)
is not an early loan, such payment shall be deemed fully to satisfy the claim, and the participating financial institution shall have no other or further right to receive any amount from the reserve fund with respect to such claim; or
(B)
is an early loan, such payment shall not be deemed fully to satisfy the claim of the participating financial institution, and at such time as the remaining balance of the claim does not exceed 75 percent of the balance in the reserve fund, the participating State shall, upon the request of the participating financial institution, pay any remaining amount of the claim.
(n)

Denial of Claims.—
A participating State may deny a claim if a representation or warranty made by the participating financial institution to the participating State at the time that the loan was filed for enrollment or at the time that the claim was submitted was known by the participating financial institution to be false.
(o)

Subsequent Recovery of Claim Amount.—
If, subsequent to payment of a claim by the participating State, a participating financial institution recovers from a borrower any amount for which payment of the claim was made, the participating financial institution shall promptly pay to the participating State for deposit into the reserve fund the amount recovered, less any expenses incurred by the institution in collection of such amount.
(p)

Participation Agreement Terms.—
(1)

In general.—
In connection with the filing of a loan for enrollment in the Program, the participation agreement—
(A)
shall require the participating financial institution to obtain an assurance from each borrower that—
(i)
the proceeds of the loan will be used for a business purpose;
(ii)
the loan will not be used to finance passive real estate ownership; and
(iii)
the borrower is not—
(I)
an executive officer, director, or principal shareholder of the participating financial institution;
(II)
a member of the immediate family of an executive officer, director, or principal shareholder of the participating financial institution; or
(III)
a related interest of any such executive officer, director, principal shareholder, or member of the immediate family;
(B)
shall require the participating financial institution to provide assurances to the participating State that the loan has not been made in order to place under the protection of the Program prior debt that is not covered under the Program and that is or was owed by the borrower to the participating financial institution or to an affiliate of the participating financial institution;
(C)
may provide that if—
(i)
a participating financial institution makes a loan to a borrower that is a refinancing of a loan previously made to the borrower by the participating financial institution or an affiliate of the participating financial institution;
(ii)
such prior loan was not enrolled in the Program; and
(iii)
additional or new financing is extended by the participating financial institution as part of the refinancing,
the participating financial institution may file the loan for enrollment, with the amount to be covered under the Program not to exceed the amount of any additional or new financing; and
(D)
may include additional restrictions on the eligibility of loans or borrowers that are not inconsistent with the provisions and purposes of this subtitle.
(2)

Definitions.—
For purposes of this subsection, the terms “executive officer”, “director”, “principal shareholder”, “immediate family”, and “related interest” refer to the same relationship to a participating financial institution as the relationship described in part 215 of title 12 of the Code of Federal Regulations, or any successor to such part.
(q)

Termination Clause.—
In each participation agreement, the participating State shall reserve for itself the ability to terminate its obligation to enroll loans under the Program. Any such termination shall be prospective only, and shall not apply to amounts of loans enrolled under the Program prior to such termination.
(r)

Allowable Withdrawals From Fund.—
The participation agreement may provide that, if, for any consecutive period of not less than 24 months, the aggregate outstanding balance of all enrolled loans for a participating financial institution is continually less than the outstanding balance in the reserve fund for that participating financial institution, the participating State, in its discretion, may withdraw an amount from the reserve fund to bring the balance in the reserve fund down to the outstanding balance of all such enrolled loans.
(s)

Grandfathered Provision.—
(1)

Special treatment of premium charges.—
Notwithstanding subsection (b) or (d), the participation agreement, if explicitly authorized by a statute enacted by the State before the date of enactment of this Act, may allow a participating financial institution to treat the premium charges paid by the participating financial institution and the borrower into the reserve fund, and interest or income earned on funds in the reserve fund that are deemed to be attributable to such premium charges, as assets of the participating financial institution for accounting purposes, subject to withdrawal by the participating financial institution only—
(A)
for the payment of claims approved by the participating State in accordance with this section; and
(B)
upon the participating financial institution's withdrawal from authority to make new loans under the Program.
(2)

Payment of post-withdrawal claims.—
After any withdrawal of assets from the reserve fund pursuant to paragraph (1)(B), any future claims filed by the participating financial institution on loans remaining in its capital access program portfolio shall only be paid from funds remaining in the reserve fund to the extent that, in the aggregate, such claims exceed the sum of the amount of such withdrawn assets, and interest on that amount, imputed at the same rate as income would have accrued had the amount not been withdrawn.
(3)

Conditions for terminating special authority.—
If the Fund determines that the inclusion in a participation agreement of the provisions authorized by this subsection is resulting in the enrollment of loans under the Program that are likely to have been made without assistance provided under this subtitle, the Fund may notify the participating State that henceforth, the Fund will only make reimbursements to the State under section 257 with respect to a loan if the participation agreement between the participating State and each participating financial institution has been amended to conform with this section, without exercise of the special authority granted by this subsection.
SEC. 256.
[12 U.S.C. 4746]

REPORTS.
(a)

Reserve Funds Report.—
On or before the last day of each calendar quarter, a participating State shall submit to the Fund a report of contributions to reserve funds made by the participating State during the previous calendar quarter. If the participating State has made contributions to one or more reserve funds during the previous quarter, the report shall—
(1)
indicate the total amount of such contributions;
(2)
indicate the amount of contributions which is subject to reimbursement, which shall be equal to the total amount of contributions, unless one of the limitations contained in section 257 is applicable;
(3)
if one of the limitations in section 257 is applicable, provide documentation of the applicability of such limitation for each loan for which the limitation applies; and
(4)
include a certification by the participating State that—
(A)
the information provided in accordance with paragraphs (1), (2), and (3) is accurate;
(B)
funds in an amount meeting the minimum requirements of section 253(b)(3) continue to be available and legally committed to contributions by the State to reserve funds, less any amount that has been contributed by the State to reserve funds subsequent to the State being approved for participation in the Program;
(C)
there has been no unapproved amendment to any participation agreement or the form of participation agreements; and
(D)
the participating State is otherwise implementing the Program in accordance with this subtitle and regulations issued pursuant to section 259.
(b)

Annual Data.—
Not later than March 31 of each year, each participating State shall submit to the Fund annual data indicating the number of borrowers financed under the Program, the total amount of covered loans, and breakdowns by industry type, loan size, annual sales, and number of employees of the borrowers financed.
(c)

Form.—
The reports and data filed pursuant to subsections (a) and (b) shall be in such form as the Fund may require.
SEC. 257.
[12 U.S.C. 4747]

REIMBURSEMENT BY THE FUND.
(a)

Reimbursements.—
Not later than 30 calendar days after receiving a report filed in compliance with section 256, the Fund shall reimburse the participating State in an amount equal to 50 percent of the amount of contributions by the participating State to the reserve funds that are subject to reimbursement by the Fund pursuant to section 256 and this section. The Fund shall reimburse participating States, as it receives reports pursuant to section 256(a), until available funds are expended.
(b)

Size of Assisted Borrower.—
The Fund shall not provide any reimbursement to a participating State with respect to an enrolled loan made to a borrower that has 500 or more employees at the time that the loan is enrolled in the Program.
(c)

Three-Year Maximum.—
The amount of reimbursement to be provided by the Fund to a participating State over any 3-year period in connection with loans made to any single borrower or any group of borrowers among which a common enterprise exists shall not exceed $75,000. For purposes of this subsection, “common enterprise” shall have the same meaning as in part 32 of title 12 of the Code of Federal Regulations, or any successor to that part.
(d)

Loans Totaling Less Than $2,000,000.—
In connection with a loan in which the covered amount of the loan plus the covered amount of all previous loans enrolled by a participating financial institution does not exceed $2,000,000, the amount of reimbursement by the Fund to the participating State shall not exceed the lesser of—
(1)
75 percent of the sum of the premium charges paid to the reserve fund by the borrower and the participating financial institution; or
(2)
5.25 percent of the covered amount of the loan.
(e)

Loans Totaling More Than $2,000,000.—
In connection with a loan in which the sum of the covered amounts of all previous loans enrolled by the participating financial institution in the Program equals or exceeds $2,000,000, the amount of reimbursement to be provided by the Fund to the participating State shall not exceed the lesser of—
(1)
50 percent of the sum of the premium charges paid by the borrower and the participating financial institution; or
(2)
3.5 percent of the covered amount of the loan.
(f)

Other Amounts.—
In connection with the enrollment of a loan that will cause the aggregate covered amount of all enrolled loans to exceed $2,000,000, the amount of reimbursement by the Fund to the participating State shall be determined—
(1)
by applying subsection (d) to the portion of the loan, which when added to the aggregate covered amount of all previously enrolled loans equals $2,000,000; and
(2)
by applying subsection (e) to the balance of the loan.
SEC. 258.
[12 U.S.C. 4748]

REIMBURSEMENT TO THE FUND.
(a)

In General.—
If a participating State withdraws funds from a reserve fund pursuant to terms of the participation agreement permitted by subsection (d) or (r) of section 255, such participating State shall, not later than 15 calendar days after such withdrawal, submit to the Fund an amount computed by multiplying the amount withdrawn by the appropriate factor, as determined under subsection (b).
(b)

Factor.—
The appropriate factor shall be obtained by dividing the total amount of contributions that have been made by the participating State to all reserve funds which were subject to reimbursement—
(1)
by 2; and
(2)
by the total amount of contributions made by the participating State to all reserve funds, including if applicable, contributions that have been made by the State prior to becoming a participating State if the State continued its own capital access program in accordance with section 253(b).
(c)

Use of Reimbursements.—
The Fund may use funds reimbursed pursuant to this section to make reimbursements under section 257.
SEC. 259.
[12 U.S.C. 4749]

REGULATIONS.
The Fund shall promulgate appropriate regulations to implement this subtitle.
SEC. 260.
[12 U.S.C. 4750]

AUTHORIZATION OF APPROPRIATIONS.
(a)

Amount.—
There are authorized to be appropriated to the Fund $50,000,000 to carry out this subtitle.
(b)

Budgetary Treatment.—
The amount authorized to be appropriated under subsection (a) shall be subject to discretionary spending caps, as provided in section 601 of the Congressional Budget Act of 1974, and therefore shall reduce by an equal amount funds made available for other discretionary spending programs.
SEC. 261.
[12 U.S.C. 4741 nt]

EFFECTIVE DATE.
This subtitle shall become effective on January 6, 1996.
TITLE III—

PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT
SEC. 301.
[12 U.S.C. 4801]

INCORPORATED DEFINITIONS.
Unless otherwise specifically provided in this title, for purposes of this title—
(1)
the terms “appropriate Federal banking agency”, “Federal banking agencies”, “insured depository institution”, and “State bank supervisor” have the same meanings as in section 3 of the Federal Deposit Insurance Act; and
(2)
the term “insured credit union” has the same meaning as in section 101 of the Federal Credit Union Act.
SEC. 302.
[12 U.S.C. 4802]

ADMINISTRATIVE CONSIDERATION OF BURDEN WITH NEW REGULATIONS.
(a)

Agency Considerations.—
In determining the effective date and administrative compliance requirements for new regulations that impose additional reporting, disclosure, or other requirements on insured depository institutions, each Federal banking agency shall consider, consistent with the principles of safety and soundness and the public interest—
(1)
any administrative burdens that such regulations would place on depository institutions, including small depository institutions and customers of depository institutions; and
(2)
the benefits of such regulations.
(b)

Adequate Transition Period for New Regulations.—
(1)

In general.—
New regulations and amendments to regulations prescribed by a Federal banking agency which impose additional reporting, disclosures, or other new requirements on insured depository institutions shall take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form, unless—
(A)
the agency determines, for good cause published with the regulation, that the regulation should become effective before such time;
(B)
the regulation is issued by the Board of Governors of the Federal Reserve System in connection with the implementation of monetary policy; or
(C)
the regulation is required to take effect on a date other than the date determined under this paragraph pursuant to any other Act of Congress.
(2)

Early compliance.—
Any person who is subject to a regulation described in paragraph (1) may comply with the regulation before the effective date of the regulation.
SEC. 303.
[12 U.S.C. 4803]

STREAMLINING OF REGULATORY REQUIREMENTS.
(a)

Review of Regulations; Regulatory Uniformity.—
During the 2-year period beginning on the date of enactment of this Act, each Federal banking agency shall, consistent with the principles of safety and soundness, statutory law and policy, and the public interest—
(1)
conduct a review of the regulations and written policies of that agency to—
(A)
streamline and modify those regulations and policies in order to improve efficiency, reduce unnecessary costs, and eliminate unwarranted constraints on credit availability;
(B)
remove inconsistencies and outmoded and duplicative requirements; and
(C)
with respect to regulations prescribed pursuant to section 18(o) of the Federal Deposit Insurance Act, consider the impact that such standards have on the availability of credit for small business, residential, and agricultural purposes, and on low- and moderate-income communities;
(2)
review the extent to which existing regulations require insured depository institutions and insured credit unions to produce unnecessary internal written policies and eliminate such requirements, where appropriate;
(3)
work jointly with the other Federal banking agencies to make uniform all regulations and guidelines implementing common statutory or supervisory policies; and
(4)
submit a joint report to the Congress at the end of such 2-year period detailing the progress of the agencies in carrying out this subsection.
(b)

Review of Disclosures.—
The Board of Governors of the Federal Reserve System, in consultation with the consumer advisory council to such Board, consumers, representatives of consumers, lenders, and other interested persons, shall—
(1)
review the regulations and written policies of the Board with respect to disclosures pursuant to the Truth in Lending Act with regard to variable-rate mortgages in order to simplify the disclosures, if necessary, and make the disclosures more meaningful and comprehensible to consumers;
(2)
implement any necessary regulatory changes, consistent with applicable law; and
(3)
not later than 2 years after completion of the review required by paragraph (1), submit a report to the Congress on the results of its actions taken in accordance with this subsection and any recommended legislative actions.
SEC. 304.
[12 U.S.C. 4804]

ELIMINATION OF DUPLICATIVE FILINGS.
The Federal banking agencies shall work jointly—
(1)
to eliminate, to the extent practicable, duplicative or otherwise unnecessary requests for information in connection with applications or notices to the agencies; and
(2)
to harmonize, to the extent practicable, any inconsistent publication and public notice requirements.
[Sections 305 and 306 amended other laws.]
SEC. 307.
[12 U.S.C. 4805]

CALL REPORT SIMPLIFICATION.
(a)

Modernization of Call Report Filing and Disclosure System.—
In order to reduce the administrative requirements pertaining to bank reports of condition, savings association financial reports, and bank holding company consolidated and parent-only financial statements, and to improve the timeliness of such reports and statements, the Federal banking agencies shall—
(1)
work jointly to develop a system under which—
(A)
insured depository institutions and their affiliates may file such reports and statements electronically; and
(B)
the Federal banking agencies may make such reports and statements available to the public electronically; and
(2)
not later than 1 year after the date of enactment of this Act, report to the Congress and make recommendations for legislation that would enhance efficiency for filers and users of such reports and statements.
(b)

Uniform Reports and Simplification of Instructions.—
The Federal banking agencies shall, consistent with the principles of safety and soundness, work jointly—
(1)
to adopt a single form for the filing of core information required to be submitted under Federal law to all such agencies in the reports and statements referred to in subsection (a); and
(2)
to simplify instructions accompanying such reports and statements and to provide an index to the instructions that is adequate to meet the needs of both filers and users.
(c)

Review of Call Report Schedule.—
Each Federal banking agency shall—
(1)
review the information required by schedules supplementing the core information referred to in subsection (b); and
(2)
eliminate requirements that are not warranted for reasons of safety and soundness or other public purposes.
[Section 308 amended other laws.]
SEC. 309.
[12 U.S.C. 4806]

REGULATORY APPEALS PROCESS, OMBUDSMAN, AND ALTERNATIVE DISPUTE RESOLUTION.
(a)

In General.—
Not later than 180 days after the date of enactment of this Act, each appropriate Federal banking agency and the National Credit Union Administration Board shall establish an independent intra-agency appellate process. The process shall be available to review material supervisory determinations made at insured depository institutions or at insured credit unions that the agency supervises.
(b)

Review Process.—
In establishing the independent appellate process under subsection (a), each agency shall ensure that—
(1)
any appeal of a material supervisory determination by an insured depository institution or insured credit union is heard and decided expeditiously; and
(2)
appropriate safeguards exist for protecting the appellant from retaliation by agency examiners.
(c)

Comment Period.—
Not later than 90 days after the date of enactment of this Act, each appropriate Federal banking agency and the National Credit Union Administration Board shall provide public notice and opportunity for comment on proposed guidelines for the establishment of an appellate process under this section.
(d)

Agency Ombudsman.—
(1)

Establishment required.—
Not later than 180 days after the date of enactment of this Act, each Federal banking agency and the National Credit Union Administration Board shall appoint an ombudsman.
(2)

Duties of ombudsman.—
The ombudsman appointed in accordance with paragraph (1) for any agency shall—
(A)
act as a liaison between the agency and any affected person with respect to any problem such party may have in dealing with the agency resulting from the regulatory activities of the agency; and
(B)
assure that safeguards exist to encourage complainants to come forward and preserve confidentiality.
(e)

Alternative Dispute Resolution Pilot Program.—
(1)

In general.—
Not later than 18 months after the date of enactment of this Act, each Federal banking agency and the National Credit Union Administration Board shall develop and implement a pilot program for using alternative means of dispute resolution of issues in controversy (hereafter in this section referred to as the “alternative dispute resolution program”) that is consistent with the requirements of subchapter IV of chapter 5 of title 5, United States Code, if the parties to the dispute, including the agency, agree to such proceeding.
(2)

Standards.—
An alternative dispute resolution pilot program developed under paragraph (1) shall—
(A)
be fair to all interested parties to a dispute;
(B)
resolve disputes expeditiously; and
(C)
be less costly than traditional means of dispute resolution, including litigation.
(3)

Independent evaluation.—
Not later than 18 months after the date on which a pilot program is implemented under paragraph (1), the Administrative Conference of the United States shall submit to the Congress a report containing—
(A)
an evaluation of that pilot program;
(B)
the extent to which the pilot programs meet the standards established under paragraph (2);
(C)
the extent to which parties to disputes were offered alternative means of dispute resolution and the frequency with which the parties, including the agencies, accepted or declined to use such means; and
(D)
any recommendations of the Conference to improve the alternative dispute resolution procedures of the Federal banking agencies and the National Credit Union Administration Board.
(4)

Implementation of program.—
At any time after completion of the evaluation under paragraph (3)(A), any Federal banking agency and the National Credit Union Administration Board may implement an alternative dispute resolution program throughout the agency, taking into account the results of that evaluation.
(5)

Coordination with existing agency adr programs.—
(A)

Evaluation required.—
If any Federal banking agency or the National Credit Union Administration maintains an alternative dispute resolution program as of the date of enactment of this Act under any other provision of law, the Administrative Conference of the United States shall include such program in the evaluation conducted under paragraph (3)(A).
(B)

Multiple adr programs.—
No provision of this section shall be construed as precluding any Federal banking agency or the National Credit Union Administration Board from establishing more than 1 alternative means of dispute resolution.
(f)

Definitions.—
For purposes of this section, the following definitions shall apply:
(1)

Material supervisory determinations.—
The term “material supervisory determinations”—
(A)
includes determinations relating to—
(i)
examination ratings;
(ii)
the adequacy of loan loss reserve provisions; and
(iii)
loan classifications on loans that are significant to an institution; and
(B)
does not include a determination by a Federal banking agency or the National Credit Union Administration Board to appoint a conservator or receiver for an insured depository institution or a liquidating agent for an insured credit union, as the case may be, or a decision to take action pursuant to section 38 of the Federal Deposit Insurance Act or section 212 of the Federal Credit Union Act, as appropriate.
(2)

Independent appellate process.—
The term “independent appellate process” means a review by an agency official who does not directly or indirectly report to the agency official who made the material supervisory determination under review.
(3)

Alternative means of dispute resolution.—
The term “alternative means of dispute resolution” has the meaning given to such term in section 571 of title 5, United States Code.
(4)

Issues in controversy.—
The term “issues in controversy” means—
(A)
any final agency decision involving any claim against an insured depository institution or insured credit union for which the agency has been appointed conservator or receiver or for which a liquidating agent has been appointed, as the case may be;
(B)
any final action taken by an agency in the agency's capacity as conservator or receiver for an insured depository institution or by the liquidating agent appointed for an insured credit union; and
(C)
any other issue for which the appropriate Federal banking agency or the National Credit Union Administration Board determines that alternative means of dispute resolution would be appropriate.
(g)

Effect on Other Authority.—
Nothing in this section shall affect the authority of an appropriate Federal banking agency or the National Credit Union Administration Board to take enforcement or supervisory action.
[Sections 310 through 327 amended other laws.]
SEC. 328.
[12 U.S.C. 4801 nt]

STUDY AND REPORT ON CAPITAL STANDARDS AND THEIR IMPACT ON THE ECONOMY.
(a)

In General.—
The Secretary of the Treasury, in consultation with the Federal banking agencies, shall conduct a study of the effect that the implementation of risk-based capital standards for depository institutions, including the Basle international capital standards, is having on—
(1)
the safety and soundness of insured depository institutions;
(2)
the availability of credit, particularly to individuals and small businesses; and
(3)
economic growth.
(b)

Report.—
(1)

In general.—
Before the end of the 1-year period beginning on the date of enactment of this Act, the Secretary of the Treasury shall submit a report to the Congress on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a).
(2)

Recommendations.—
The report shall contain any recommendations with respect to capital standards that the Secretary of the Treasury may determine to be appropriate.
SEC. 329.
[12 U.S.C. 4801 nt]

STUDY ON THE IMPACT OF THE PAYMENT OF INTEREST ON RESERVES.
(a)

Federal Reserve Study.—
Not later than 180 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System, in consultation with the Federal Deposit Insurance Corporation and the National Credit Union Administration Board, shall conduct a study and report to the Congress on—
(1)
the necessity, for monetary policy purposes, of continuing to require insured depository institutions to maintain sterile reserves;
(2)
the appropriateness of paying a market rate of interest to insured depository institutions on sterile reserves or, in the alternative, providing for payment of such interest into the appropriate deposit insurance fund;
(3)
the monetary impact that the failure to pay interest on sterile reserves has had on insured depository institutions, including an estimate of the total dollar amount of interest and the potential income lost by insured depository institutions; and
(4)
the impact that the failure to pay interest on sterile reserves has had on the ability of the banking industry to compete with nonbanking providers of financial services and with foreign banks.
(b)

Budgetary Impact Study.—
Not later than 180 days after the date of enactment of this Act, the Director of the Office of Management and Budget and the Director of the Congressional Budget Office, in consultation with the Committees on the Budget of the Senate and the House of Representatives, shall jointly conduct a study and report to the Congress on the budgetary impact of—
(1)
paying a market rate of interest to insured depository institutions on sterile reserves; and
(2)
paying such interest into the respective deposit insurance funds.
SEC. 330.
[12 U.S.C. 4801 nt]

STUDY AND REPORT ON THE CONSUMER CREDIT SYSTEM.
(a)

Study.—
The Secretary of the Treasury, in consultation with the Board of Governors of the Federal Reserve System, the Administrator of the Small Business Administration, the Secretary of Housing and Urban Development, and the other Federal banking agencies, shall conduct a study of the process, including any Federal laws, by which credit is made available for consumers and small businesses in order to identify procedures, including any Federal laws, which have the effect of—
(1)
reducing the amount of credit available for such purposes or the number of persons eligible for such credit;
(2)
increasing the level of consumer inconvenience, cost, and time delays in connection with the extension of consumer and small business credit without corresponding benefit with respect to the protection of consumers or small businesses or the safety and soundness of insured depository institutions; and
(3)
increasing costs and burdens on insured depository institutions, insured credit unions, and other lenders without corresponding benefit with respect to the protection of consumers or small business concerns or to the safety and soundness of insured institutions.
(b)

Report.—
(1)

In general.—
Not later than 1 year after the date of enactment of this Act, the Secretary of the Treasury shall submit a report to the Congress on the findings and conclusions of the Secretary with respect to the study conducted under subsection (a).
(2)

Recommendations.—
The report required by paragraph (1) shall contain any recommendations for administrative action or statutory changes that the Secretary of the Treasury may determine to be appropriate.
(c)

Public Participation.—
In conducting the study required by subsection (a), comments shall be solicited from consumers, representatives of consumers, insured depository institutions, insured credit unions, other lenders, and other interested parties.
[Sections 331 and 332 amended other laws.]
SEC. 333.
[12 U.S.C. 4801 nt]

STUDY ON CHECK-RELATED FRAUD.
(a)

Study.—
The Board of Governors of the Federal Reserve System (hereafter in this section referred to as the “Board”) shall conduct a study on the advisability of extending the 1-business-day period specified in section 603(b)(1) of the Expedited Funds Availability Act, regarding availability of funds deposited by local checks, to 2 business days.
(b)

Considerations.—
In conducting the study under subsection (a), the Board shall consider—
(1)
whether there is a pattern of significant increases in check-related losses at depository institutions attributable to the provisions of the Expedited Funds Availability Act; and
(2)
whether extension of the time period referred to in subsection (a) is necessary to diminish the volume of any such check-related losses.
(c)

Report to the Congress.—
Not later than 2 years after the date of enactment of this Act, the Board shall submit a report to the Congress concerning the results of the study conducted under this section and including any recommendations for legislative action.
[Sections 334 through 340 amended other laws.]
SEC. 341.
[12 U.S.C. 4801 nt]

FEASIBILITY STUDY OF DATA BANK.
(a)

In General.—
Not later than 18 months after the date of enactment of this Act, the Federal Financial Institutions Examination Council shall—
(1)
study the feasibility, including the costs and benefits to insured depository institutions, of establishing and maintaining a data bank for reports submitted by any depository institution to a Federal banking agency; and
(2)
report the results of such study to the Congress.
(b)

Additional Factors.—
The study required under subsection (a) shall consider the feasibility of—
(1)
permitting depository institutions to file reports directly with the data bank; and
(2)
permitting Federal banking agencies, State bank supervisors, and the public to obtain access to any appropriate report on file with the data bank which such agency or supervisor or the public is otherwise authorized to receive.
SEC. 342.
[12 U.S.C. 4801 nt]

TIMELY COMPLETION OF CRA REVIEW.
The comprehensive regulatory review of the Community Reinvestment Act of 1977 that, as of the date of enactment of this Act, is being conducted by the Federal banking agencies, shall be completed at the earliest practicable time.
SEC. 343.
[12 U.S.C. 4807]

TIME LIMIT ON AGENCY CONSIDERATION OF COMPLETED APPLICATIONS.
(a)

In General.—
Each Federal banking agency shall take final action on any application to the agency before the end of the 1-year period beginning on the date on which a completed application is received by the agency.
(b)

Waiver by Applicant Authorized.—
Any person submitting an application to a Federal banking agency may waive the applicability of subsection (a) with respect to such application at any time.
SEC. 344.
[12 U.S.C. 4801 nt]

WAIVER OF RIGHT OF RESCISSION FOR CERTAIN REFINANCING TRANSACTIONS.
Not later than 6 months after the date of enactment of this Act, the Board of Governors of the Federal Reserve System, in consultation with the consumer advisory council to such Board, consumers, representatives of consumers, lenders, and other interested parties, shall submit recommendations to the Congress regarding whether a waiver or modification, at the option of a consumer, of the right of rescission under section 125 of the Truth in Lending Act with respect to transactions which constitute a refinancing or consolidation (with no new advances) of the principal balance then due, and any accrued and unpaid finance charges of an existing extension of credit by a different creditor secured by an interest in the same property, would benefit consumers.
[Sections 345 through 349 amended other laws.]
SEC. 350.
[12 U.S.C. 4808]

REVISING REGULATORY REQUIREMENTS FOR TRANSFERS OF ALL TYPES OF ASSETS WITH RECOURSE.
(a)

Review and Revision of Regulations.—
(1)

In general.—
During the 180-day period beginning on the date of enactment of this Act, each appropriate Federal banking agency shall, consistent with the principles of safety and soundness and the public interest—
(A)
review the agency's regulations and written policies relating to transfers of assets with recourse by insured depository institutions; and
(B)
in consultation with the other Federal banking agencies, promulgate regulations that better reflect the exposure of an insured depository institution to credit risk from transfers of assets with recourse.
(2)

Regulations required.—
Before the end of the 180-day period beginning on the date of enactment of this Act, each appropriate Federal banking agency shall prescribe the regulations developed pursuant to paragraph (1)(B).
(b)

Regulations Required.—
(1)

In general.—
After the end of the 180-day period beginning on the date of enactment of this Act, the amount of risk-based capital required to be maintained, under regulations prescribed by the appropriate Federal banking agency, by any insured depository institution with respect to assets transferred with recourse by such institution may not exceed the maximum amount of recourse for which such institution is contractually liable under the recourse agreement.
(2)

Exception for safety and soundness.—
The appropriate Federal banking agency may require any insured depository institution to maintain risk-based capital in an amount greater than the amount determined under paragraph (1), if the agency determines, by regulation or order, that such higher amount is necessary for safety and soundness reasons.
(c)

Coordination With Section 208(b).—
This section shall not be construed as superseding the applicability of section 208(b).
(d)

Definitions.—
For purposes of this section, the terms “appropriate Federal banking agency”, “Federal banking agency”, and “insured depository institution” have the same meanings as in section 3 of the Federal Deposit Insurance Act.
TITLE IV—

MONEY LAUNDERING
SEC. 401.

SHORT TITLE.
This title may be cited as the “Money Laundering Suppression Act of 1994”.
* * * * * * *
[Sections 402 and 403 amended other laws.]
SEC. 404.
[31 U.S.C. 5318 nt]

IMPROVEMENT OF IDENTIFICATION OF MONEY LAUNDERING SCHEMES.
(a)

Enhanced Training, Examinations, and Referrals by Banking Agencies.—
Before the end of the 6-month period beginning on the date of enactment of this Act, each appropriate Federal banking agency shall, in consultation with the Secretary of the Treasury and other appropriate law enforcement agencies—
(1)
review and enhance training and examination procedures to improve the identification of money laundering schemes involving depository institutions; and
(2)
review and enhance procedures for referring cases to any appropriate law enforcement agency.
(b)

Improved Reporting of Criminal Schemes by Law Enforcement Agencies.—
The Secretary of the Treasury and each appropriate law enforcement agency shall provide, on a regular basis, information regarding money laundering schemes and activities involving depository institutions to each appropriate Federal banking agency in order to enhance each agency's ability to examine for and identify money laundering activity.
(c)

Report to Congress.—
The Financial Institutions Examination Council shall submit a report on the progress made in carrying out subsection (a) and the usefulness of information received pursuant to subsection (b) to the Congress by the end of the 1-year period beginning on the date of enactment of this Act.
(d)

Definition.—
For purposes of this section, the term “appropriate Federal banking agency” has the same meaning as in section 3 of the Federal Deposit Insurance Act.
[Sections 405 and 406 amended other laws.]
SEC. 407.
[31 U.S.C. 5311 nt]

UNIFORM STATE LICENSING AND REGULATION OF CHECK CASHING, CURRENCY EXCHANGE, AND MONEY TRANSMITTING BUSINESSES.
(a)

Uniform Laws and Enforcement.—
For purposes of preventing money laundering and protecting the payment system from fraud and abuse, it is the sense of the Congress that the several States should—
(1)
establish uniform laws for licensing and regulating businesses which—
(A)
provide check cashing, currency exchange, or money transmitting or remittance services, or issue or redeem money orders, travelers' checks, and other similar instruments; and
(B)
are not depository institutions (as defined in section 5313(g) of title 31, United States Code); and
(2)
provide sufficient resources to the appropriate State agency to enforce such laws and regulations prescribed pursuant to such laws.
(b)

Model Statute.—
It is the sense of the Congress that the several States should develop, through the auspices of the National Conference of Commissioners on Uniform State Laws, the American Law Institute, or such other forum as the States may determine to be appropriate, a model statute to carry out the goals described in subsection (a) which would include the following:
(1)

Licensing requirements.—
A requirement that any business described in subsection (a)(1) be licensed and regulated by an appropriate State agency in order to engage in any such activity within the State.
(2)

Licensing standards.—
A requirement that—
(A)
in order for any business described in subsection (a)(1) to be licensed in the State, the appropriate State agency shall review and approve—
(i)
the business record and the capital adequacy of the business seeking the license; and
(ii)
the competence, experience, integrity, and financial ability of any individual who—
(I)
is a director, officer, or supervisory employee of such business; or
(II)
owns or controls such business; and
(B)
any record, on the part of any business seeking the license or any person referred to in subparagraph (A)(ii), of—
(i)
any criminal activity;
(ii)
any fraud or other act of personal dishonesty;
(iii)
any act, omission, or practice which constitutes a breach of a fiduciary duty; or
(iv)
any suspension or removal, by any agency or department of the United States or any State, from participation in the conduct of any federally or State licensed or regulated business,
may be grounds for the denial of any such license by the appropriate State agency.
(3)

Reporting requirements.—
A requirement that any business described in subsection (a)(1)—
(A)
disclose to the appropriate State agency the fees charged to consumers for services described in subsection (a)(1)(A); and
(B)
conspicuously disclose to the public, at each location of such business, the fees charged to consumers for such services.
(4)

Procedures to ensure compliance with federal cash transaction reporting requirements.—
A civil or criminal penalty for operating any business referred to in paragraph (1) without establishing and complying with appropriate procedures to ensure compliance with subchapter II of chapter 53 of title 31, United States Code (relating to records and reports on monetary instruments transactions).
(5)

Criminal penalties for operation of business without a license.—
A criminal penalty for operating any business referred to in paragraph (1) without a license within the State after the end of an appropriate transition period beginning on the date of enactment of such model statute by the State.
(c)

Study Required.—
The Secretary of the Treasury shall conduct a study of—
(1)
the progress made by the several States in developing and enacting a model statute which—
(A)
meets the requirements of subsection (b); and
(B)
furthers the goals of—
(i)
preventing money laundering by businesses which are required to be licensed under any such statute; and
(ii)
protecting the payment system, including the receipt, payment, collection, and clearing of checks, from fraud and abuse by such businesses; and
(2)
the adequacy of—
(A)
the activity of the several States in enforcing the requirements of such statute; and
(B)
the resources made available to the appropriate State agencies for such enforcement activity.
(d)

Report Required.—
Not later than the end of the 3-year period beginning on the date of enactment of this Act and not later than the end of each of the first two 1-year periods beginning after the end of such 3-year period, the Secretary of the Treasury shall submit a report to the Congress containing the findings and recommendations of the Secretary in connection with the study under subsection (c), together with such recommendations for legislative and administrative action as the Secretary may determine to be appropriate.
(e)

Recommendations in Cases of Inadequate Regulation and Enforcement by States.—
If the Secretary of the Treasury determines that any State has been unable to—
(1)
enact a statute which meets the requirements described in subsection (b);
(2)
undertake adequate activity to enforce such statute; or
(3)
make adequate resources available to the appropriate State agency for such enforcement activity,
the report submitted pursuant to subsection (d) shall contain recommendations of the Secretary which are designed to facilitate the enactment and enforcement by the State of such a statute.
(f)

Federal Funding Study.—
(1)

Study required.—
The Secretary of the Treasury shall conduct a study to identify possible available sources of Federal funding to cover costs which will be incurred by the States in carrying out the purposes of this section.
(2)

Report.—
The Secretary of the Treasury shall submit a report to the Congress on the study conducted pursuant to paragraph (1) not later than the end of the 18-month period beginning on the date of enactment of this Act.
SEC. 408.

REGISTRATION OF MONEY TRANSMITTING BUSINESSES TO PROMOTE EFFECTIVE LAW ENFORCEMENT.
(a)
[31 U.S.C. 5330 nt]

Findings and Purposes.—
(1)

Findings.—
The Congress hereby finds the following:
(A)
Money transmitting businesses are subject to the recordkeeping and reporting requirements of subchapter II of chapter 53 of title 31, United States Code.
(B)
Money transmitting businesses are largely unregulated businesses and are frequently used in sophisticated schemes to—
(i)
transfer large amounts of money which are the proceeds of unlawful enterprises; and
(ii)
evade the requirements of such subchapter II, the Internal Revenue Code of 1986, and other laws of the United States.
(C)
Information on the identity of money transmitting businesses and the names of the persons who own or control, or are officers or employees of, a money transmitting business would have a high degree of usefulness in criminal, tax, or regulatory investigations and proceedings.
(2)

Purpose.—
It is the purpose of this section to establish a registration requirement for businesses engaged in providing check cashing, currency exchange, or money transmitting or remittance services, or issuing or redeeming money orders, travelers' checks, and other similar instruments to assist the Secretary of the Treasury, the Attorney General, and other supervisory and law enforcement agencies to effectively enforce the criminal, tax, and regulatory laws and prevent such money transmitting businesses from engaging in illegal activities.
[Subsections (b), (c), and (d) amended other laws.]
[Sections 409 through 411 amended other laws.]
SEC. 412.

GAO STUDY OF CASHIERS' CHECKS.
(a)

Study Required.—
The Comptroller General of the United States shall conduct a study to—
(1)
determine the extent to which the practice of issuing of cashiers' checks by financial institutions is vulnerable to money laundering schemes;
(2)
determine the extent to which additional recordkeeping requirements should be imposed on financial institutions which issue cashiers' checks; and
(3)
analyze such other factors relating to the use and regulation of cashiers' checks as the Comptroller General determines to be appropriate.
(b)

Report Required.—
Before the end of the 6-month period beginning on the date of enactment of this Act, the Comptroller General shall submit a report to the Congress containing—
(1)
the findings and conclusions of the Comptroller General in connection with the study conducted pursuant to subsection (a); and
(2)
such recommendations for legislative and administrative action as the Comptroller General may determine to be appropriate.
[Section 413 amended other laws.]
[Title V consists of the National Flood Insurance Reform Act of 1994.]
TITLE V—

NATIONAL FLOOD INSURANCE REFORM
SEC. 501.
[42 U.S.C. 4001 note]

SHORT TITLE.
This title may be cited as the “National Flood Insurance Reform Act of 1994”.

Subtitle A—

Definitions
* * * * * * *
Subtitle E—

Task Forces
SEC. 561.
[42 U.S.C. 4011 note]

FLOOD INSURANCE INTERAGENCY TASK FORCE.
(a)

Establishment.—
There is hereby established an interagency task force to be known as the Flood Insurance Task Force (in this section referred to as the “Task Force”).
(b)

Membership.—
(1)

In general.—
The Task Force shall be composed of 10 members, who shall be the designees of—
(A)
the Federal Insurance Administrator;
(B)
the Federal Housing Commissioner;
(C)
the Secretary of Veterans Affairs;
(D)
the Administrator of the Farmers Home Administration;
(E)
the Administrator of the Small Business Administration;
(F)
the Chairman of the Board of Directors of the Farm Credit Administration;
(G)
a designee of the Financial Institutions Examination Council;
(H)
the Director of the Office of Federal Housing Enterprise Oversight;
(I)
the chairman of the Board of Directors of the Federal Home Loan Mortgage Corporation; and
(J)
the chairman of the Board of Directors of the Federal National Mortgage Association.
(2)

Qualifications.—
Members of the Task Force shall be designated for membership on the Task Force by reason of demonstrated knowledge and competence regarding the national flood insurance program.
(c)

Duties.—
The Task Force shall carry out the following duties:
(1)

Recommendations of standardized enforcement procedures.—
Make recommendations to the head of each Federal agency and enterprise referred to under subsection (b)(1) regarding establishment or adoption of standardized enforcement procedures among such agencies and corporations responsible for enforcing compliance with the requirements under the national flood insurance program to ensure fullest possible compliance with such requirements.
(2)

Study of compliance assistance.—
Conduct a study of the extent to which Federal agencies and the secondary mortgage market can provide assistance in ensuring compliance with the requirements under the national flood insurance program and submit to the Congress a report describing the study and any conclusions.
(3)

Study of compliance model.—
Conduct a study of the extent to which existing programs of Federal agencies and corporations for compliance with the requirements under the national flood insurance program can serve as a model for other Federal agencies responsible for enforcing compliance, and submit to the Congress a report describing the study and any conclusions.
(4)

Recommendations for enforcement and compliance procedures.—
Develop recommendations regarding enforcement and compliance procedures, based on the studies and findings of the Task Force, and publish such recommendations.
(5)

Study of determination fees.—
Conduct a study of—
(A)
the reasonableness of fees charged pursuant to 102(h) of the Flood Disaster Protection Act of 1973 for costs of determining whether the property securing a loan is located in an area having special flood hazards; and
(B)
whether the fees charged pursuant to such section by lenders and servicers are greater than the amounts paid by such lenders and servicers to persons actually conducting such determinations and the extent to which the fees exceed such amounts.
(d)

Noncompensation.—
Members of the Task Force shall receive no additional pay by reason of their service on the Task Force.
(e)

Chairperson.—
The members of the Task Force shall elect one member as chairperson of the Task Force.
(f)

Meetings and Action.—
The Task Force shall meet at the call of the chairman or a majority of the members of the Task Force and may take action by a vote of the majority of the members. The Federal Insurance Administrator shall coordinate and call the initial meeting of the Task Force.
(g)

Officers.—
The chairperson of the Task Force may appoint any officers to carry out the duties of the Task Force under subsection (c).
(h)

Staff of Federal Agencies.—
Upon request of the chairperson of the Task Force, the head of any of the Federal agencies and entities referred to under subsection (b)(1) may detail, on a nonreimbursable basis, any of the personnel of such agency to the Task Force to assist the Task Force in carrying out its duties under this section.
(i)

Powers.—
In carrying out this section, the Task Force may hold hearings, sit and act at times and places, take testimony, receive evidence and assistance, provide information, and conduct research as the Task Force considers appropriate.
(j)

Termination.—
The Task Force shall terminate upon the expiration of the 24-month period beginning upon the designation of the last member to be designated under subsection (b)(1).
SEC. 562.
[42 U.S.C. 4102 note]

TASK FORCE ON NATURAL AND BENEFICIAL FUNCTIONS OF THE FLOODPLAIN.
(a)

Establishment.—
There is hereby established an interagency task force to be known as the Task Force on Natural and Beneficial Functions of the Floodplain (in this section referred to as the “Task Force”).
(b)

Membership.—
The Task Force shall be composed of 5 members, who shall be the designees of—
(1)
the Under Secretary of Commerce for Oceans and Atmosphere;
(2)
the Director of the United States Fish and Wildlife Service;
(3)
the Administrator of the Environmental Protection Agency;
(4)
the Secretary of the Army, acting through the Chief of Engineers; and
(5)
the Director of the Federal Emergency Management Agency.
(c)

Duties.—
The Task Force shall—
(1)
conduct a study to—
(A)
identify the natural and beneficial functions of the floodplain that reduce flood-related losses; and
(B)
develop recommendations on how to reduce flood losses by protecting the natural and beneficial functions of the floodplain; and
(2)
make the information and recommendations under subparagraphs (A) and (B) publicly available.
(d)

Noncompensation.—
Members of the Task Force shall receive no additional pay by reason of their service on the Task Force.
(e)

Chairperson.—
The members of the Task Force shall elect one member as chairperson of the Task Force.
(f)

Meetings and Action.—
The Task Force shall meet at the call of the chairperson or a majority of the members of the Task Force and may take action by a vote of the majority of the members. The Federal Insurance Administrator shall coordinate and call the initial meeting of the Task Force.
(g)

Officers.—
The chairperson of the Task Force may appoint any officers to carry out the duties of the Task Force under subsection (c).
(h)

Staff of Federal Agencies.—
Upon request of the chairperson of the Task Force, the head of any of the Federal agencies and entities referred to under subsection (b) may detail, on a nonreimbursable basis, any of the personnel of such agency to the Task Force to assist the Task Force in carrying out its duties under this section.
(i)

Powers.—
In carrying out this section, the Task Force may hold hearings, sit and act at times and places, take testimony, receive evidence and assistance, provide information, and conduct research as the Task Force considers appropriate.
(j)

Termination.—
The Task Force shall terminate upon the expiration of the 24-month period beginning upon the designation of the last member to be designated under subsection (b).
Subtitle F—

Miscellaneous Provisions
* * * * * * *
SEC. 576.
[42 U.S.C. 4101 note]

TECHNICAL MAPPING ADVISORY COUNCIL.
(a)

Establishment.—
There is established a council to be known as the Technical Mapping Advisory Council (in this section referred to as the “Council”).
(b)

Membership.—
(1)

In general.—
The Council shall consist of the Director of the Federal Emergency Management Agency (in this section referred to as the “Director”), or the Director's designee, and 10 additional members to be appointed by the Director or the designee of the Director, who shall be—
(A)
the Under Secretary of Commerce for Oceans and Atmosphere (or his or her designee);
(B)
a member of recognized surveying and mapping professional associations and organizations;
(C)
a member of recognized professional engineering associations and organizations;
(D)
a member of recognized professional associations or organizations representing flood hazard determination firms;
(E)
a representative of the United States Geologic Survey;
(F)
a representative of State geologic survey programs;
(G)
a representative of State national flood insurance coordination offices;
(H)
a representative of a regulated lending institution;
(I)
a representative of the Federal Home Loan Mortgage Corporation; and
(J)
a representative of the Federal National Mortgage Association.
(2)

Qualifications.—
Members of the Council shall be appointed based on their demonstrated knowledge and competence regarding surveying, cartography, remote sensing, geographic information systems, or the technical aspects of preparing and using flood insurance rate maps.
(c)

Duties.—
The Council shall—
(1)
make recommendations to the Director on how to improve in a cost-effective manner the accuracy, general quality, ease of use, and distribution and dissemination of flood insurance rate maps;
(2)
recommend to the Director mapping standards and guidelines for flood insurance rate maps; and
(3)
submit an annual report to the Director that contains—
(A)
a description of the activities of the Council;
(B)
an evaluation of the status and performance of flood insurance rate maps and mapping activities to revise and update flood insurance rate maps, as established pursuant to the amendment made by section 6757; and
^7
Probably intended to refer to section 575.
(C)
a summary of recommendations made by the Council to the Director.
(d)

Chairperson.—
The members of the Council shall elect 1 member to serve as the chairperson of the Council (in this section referred to as the “Chairperson”).
(e)

Coordination.—
To ensure that the Council's recommendations are consistent to the maximum extent practicable with national digital spatial data collection and management standards, the Chairperson shall consult with the Chairperson of the Federal Geographic Data Committee (established pursuant to OMB Circular A–16).
(f)

Compensation.—
Members of the Council shall receive no additional compensation by reason of their service on the Council.
(g)

Meetings and Actions.—
(1)

In general.—
The Council shall meet not less than twice each year at the request of the Chairperson or a majority of its members and may take action by a vote of the majority of the members.
(2)

Initial meeting.—
The Director, or a person designated by the Director, shall request and coordinate the initial meeting of the Council.
(h)

Officers.—
The Chairperson may appoint officers to assist in carrying out the duties of the Council under subsection (c).
(i)

Staff of FEMA.—
Upon the request of the Chairperson, the Director may detail, on a nonreimbursable basis, personnel of the Federal Emergency Management Agency to assist the Council in carrying out its duties.
(j)

Powers.—
In carrying out this section, the Council may hold hearings, receive evidence and assistance, provide information, and conduct research as it considers appropriate.
(k)

Termination.—
The Council shall terminate 5 years after the date on which all members of the Council have been appointed under subsection (b)(1).
SEC. 577.
[42 U.S.C. 4001 note]

EVALUATION OF EROSION HAZARDS.
(a)

Report Requirement.—
The Director of the Federal Emergency Management Agency (in this section referred to as the “Director”) shall submit a report under this section to the Congress that—
(1)
lists all communities that are likely to be identified as having erosion hazard areas;
(2)
estimates the amount of flood insurance claims under the national flood insurance program that are attributable to erosion;
(3)
states the amount of flood insurance claims under such program that are attributable to claims under section 1306(c) of the National Flood Insurance Act of 1968;
(4)
assesses the full economic impact of erosion on the National Flood Insurance Fund; and
(5)
determines the costs and benefits of expenditures necessary from the National Flood Insurance Fund to complete mapping of erosion hazard areas.
(b)

Estimate of Flood Claims.—
In developing the estimate under subsection (a)(2)—
(1)
the Director may map a statistically valid and representative number of communities with erosion hazard areas throughout the United States, including coastal, Great Lakes, and, if technologically feasible, riverine areas; and
(2)
the Director shall take into consideration the efforts of State and local governments to assess, measure, and reduce erosion hazards.
(c)

Economic Impact.—
(1)

In general.—
The assessment under subsection (a)(4) shall assess the economic impact of—
(A)
erosion on communities listed pursuant to subsection (a)(1);
(B)
the denial of flood insurance for all structures in communities listed pursuant to subsection (a)(1);
(C)
the denial of flood insurance for structures that are newly constructed in whole in communities listed pursuant to subsection (a)(1);
(D)
the establishment of (i) actuarial rates for existing structures in communities listed pursuant to subsection (a)(1), and (ii) actuarial rates for such structures in connection with the denial of flood insurance as described in subparagraph (C);
(E)
the establishment of actuarial rates for structures newly constructed in whole in erosion hazard areas in communities listed pursuant to subsection (a)(1);
(F)
the denial of flood insurance pursuant to existing requirements for coverage under the national flood insurance program;
(G)
erosion hazard assessment, measurement, and management activities undertaken by State and local governments, including building restrictions, beach nourishment, construction of sea walls and levees, and other activities that reduce the risk of damage due to erosion; and
(H)
the mapping and identifying of communities (or subdivisions thereof) having erosion hazard areas.
(2)

Scope.—
In assessing the economic impact of the activities under subparagraphs (A) through (H) of paragraph (1), the assessment under subsection (a)(4) shall address such impact on all significant economic factors, including the impact on—
(A)
the value of residential and commercial properties in communities with erosion hazards;
(B)
community tax revenues due to potential changes in property values or commercial activity;
(C)
employment, including the potential loss or gain of existing and new jobs in the community;
(D)
existing businesses and future economic development;
(E)
the estimated cost of Federal and State disaster assistance to flood victims; and
(F)
the mapping and identifying of communities (or subdivisions thereof) having erosion hazard areas.
(3)

Preparation.—
The assessment required under subsection (a)(4) shall be conducted by a private independent entity selected by the Director. The private entity shall consult with a statistically valid and representative number of communities listed pursuant to subsection (a)(1) in conducting the assessment.
(d)

Costs and Benefits of Mapping.—
The determination under subsection (a)(5) shall—
(1)
determine the costs and benefits of mapping erosion hazard areas, based upon the Director's estimate of the actual and prospective amount of flood insurance claims attributable to erosion;
(2)
if the Director determines that the savings to the National Flood Insurance Fund will exceed the cost of mapping erosion hazard areas, further assess whether using flood insurance premiums for costs of mapping erosion hazard areas is cost-beneficial compared to alternative uses of such amounts, including—
(A)
funding the mitigation assistance program under section 1366 of the National Flood Insurance Act of 1968 (as added by section 553 of this Act);
(B)
funding the program under section 1304(b) of the National Flood Insurance Act of 1968 (as added by section 555(a) of this Act) that provides additional coverage under the national flood insurance program for compliance with land use and control measures; and
(C)
reviewing, revising, and updating flood insurance rate maps under subsections (e) and (f) of section 1360 of the National Flood Insurance Act of 1968 (as added by the amendment made by section 575 of this Act);
(3)
if the Director determines under subsection (b)(1) that mapping of riverine areas for erosion hazard areas is technologically feasible, determine the costs and benefits of conducting the mapping of erosion hazards in riverine areas
(A)
separately from the mapping of other erosion hazard areas, and
(B)
together with the mapping of other such areas;
(4)
if the Director determines that the savings to the National Flood Insurance Fund will exceed the cost of mapping erosion hazard areas in riverine areas, assess whether using flood insurance premiums for costs of mapping erosion hazard areas in riverine areas is cost-beneficial compared to alternative uses of such amounts, including the uses under subparagraphs (A) through (C) of paragraph (2); and
(5)
determine the costs and benefits of mapping erosion, other than those directly related to the financial condition of the National Flood Insurance Program, and the costs of not mapping erosion.
(e)

Definition.—
For purposes of this section, the term “erosion hazard area” means, based on erosion rate information and other historical data available, an area where erosion or avulsion is likely to result in damage to or loss of buildings and infrastructure within a 60-year period.
(f)

Consultation.—
In preparing the report under this section, the Director shall consult with—
(1)
representatives from State coastal zone management programs approved under section 306 of the Coastal Zone Management Act of 1972;
(2)
the Administrator of the National Oceanic and Atmospheric Administration; and
(3)
any other persons, officials, or entities that the Director considers appropriate.
(g)

Submission.—
The Director shall submit the report to the Congress as soon as practicable, but not later than 2 years after the date of enactment of this Act.8
^8
The date of enactment was September 23, 1994.
(h)

Availability of National Flood Insurance Fund.—
Section 1310(a) of the National Flood Insurance Act of 1968 (42 U.S.C. 4017(a)) is amended * * *
SEC. 578.
[42 U.S.C. 4014 note]

STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY BASED PREMIUM RATES FOR PRE-FIRM STRUCTURES.
(a)

Study.—
The Director of the Federal Emergency Management Agency (in this section referred to as the “Director”) shall conduct a study of the economic effects that would result from increasing premium rates for flood insurance coverage made available under the national flood insurance program for pre-FIRM structures to the full actuarial risk based premium rate determined under section 1307(a)(1) of the National Flood Insurance Act of 1968 for the area in which the property is located. In conducting the study, the Director shall—
(1)
determine each area that would be subject to such increased premium rates; and
(2)
for each such area, determine—
(A)
the amount by which premium rates would be increased;
(B)
the number and types of properties affected and the number and types of properties covered by flood insurance under this title likely to cancel such insurance if the rate increases were made;
(C)
the effects that the increased premium rates would have on land values and property taxes; and
(D)
any other effects that the increased premium rates would have on the economy and homeowners.
(b)

Definition of Pre-FIRM Structure.—
For purposes of subsection (a), the term “pre-FIRM structure” means a structure that was not constructed or substantially improved after the later of—
(1)
December 31, 1974; or
(2)
the effective date of the initial rate map published by the Director under section 1360(a)(2) of the National Flood Insurance Act of 1968 for the area in which such structure is located.
(c)

Report.—
The Director shall submit a report to the Congress describing and explaining the findings of the study conducted under this section. The report shall be submitted not later than 12 months after the date of enactment of this Act.9
^9
The date of enactment was September 23, 1994.
SEC. 579.

EFFECTIVE DATES OF POLICIES.
(a)

30-Day Delay.—
Section 1306 of the National Flood Insurance Act of 1968 (42 U.S.C. 4013), as amended by the preceding provisions of this title, is further amended * * *
(b)

Study.—
The Director of the Federal Emergency Management Agency shall conduct a study to determine the appropriateness of existing requirements regarding the effective date and time of coverage under flood insurance contracts obtained through the national flood insurance program. In conducting the study, the Director shall determine whether any delay between the time of purchase of flood insurance coverage and the time of initial effectiveness of the coverage should differ for various classes of properties (based upon the type of property, location of the property, or any other factors related to the property) or for various circumstances under which such insurance was purchased. Not later than the expiration of the 6-month period beginning on the date of enactment of this Act,10 the Director shall submit to the Congress a report on the results of the study.
^{10}
The date of enactment was September 23, 1994.
* * * * * * *
SEC. 582.
[42 U.S.C. 5154a]

PROHIBITED FLOOD DISASTER ASSISTANCE.
(a)

General Prohibition.—
Notwithstanding any other provision of law, no Federal disaster relief assistance made available in a flood disaster area may be used to make a payment (including any loan assistance payment) to a person for repair, replacement, or restoration for damage to any personal, residential, or commercial property if that person at any time has received flood disaster assistance that was conditional on the person first having obtained flood insurance under applicable Federal law and subsequently having failed to obtain and maintain flood insurance as required under applicable Federal law on such property.
(b)

Transfer of Property.—
(1)

Duty to notify.—
In the event of the transfer of any property described in paragraph (3), the transferor shall, not later than the date on which such transfer occurs, notify the transferee in writing of the requirements to—
(A)
obtain flood insurance in accordance with applicable Federal law with respect to such property, if the property is not so insured as of the date on which the property is transferred; and
(B)
maintain flood insurance in accordance with applicable Federal law with respect to such property.
Such written notification shall be contained in documents evidencing the transfer of ownership of the property.
(2)

Failure to notify.—
If a transferor described in paragraph (1) fails to make a notification in accordance with such paragraph and, subsequent to the transfer of the property—
(A)
the transferee fails to obtain or maintain flood insurance in accordance with applicable Federal law with respect to the property,
(B)
the property is damaged by a flood disaster, and
(C)
Federal disaster relief assistance is provided for the repair, replacement, or restoration of the property as a result of such damage,
the transferor shall be required to reimburse the Federal Government in an amount equal to the amount of the Federal disaster relief assistance provided with respect to the property.
(3)

Property described.—
For purposes of paragraph (1), a property is described in this paragraph if it is personal, commercial, or residential property for which Federal disaster relief assistance made available in a flood disaster area has been provided, prior to the date on which the property is transferred, for repair, replacement, or restoration of the property, if such assistance was conditioned upon obtaining flood insurance in accordance with applicable Federal law with respect to such property.
(c)

Amendment to the Flood Disaster Protection Act of 1973.—
Section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(a)) is amended * * *
(d)

Definition.—
For purposes of this section, the term “flood disaster area” means an area with respect to which—
(1)
the Secretary of Agriculture finds, or has found, to have been substantially affected by a natural disaster in the United States pursuant to section 321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)); or
(2)
the President declares, or has declared, the existence of a major disaster or emergency pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), as a result of flood conditions existing in or affecting that area.
(e)

Effective Date.—
This section and the amendments made by this section shall apply to disasters declared after the date of enactment of this Act.11
^{11}
September 23, 1994.
SEC. 583.
[42 U.S.C. 4001 note]

REGULATIONS.
The Director of the Federal Emergency Management Agency and any appropriate Federal agency may each issue any regulations necessary to carry out the applicable provisions of this title and the applicable amendments made by this title.
SEC. 584.
[42 U.S.C. 4001 note]

RELATION TO STATE AND LOCAL LAWS.
This title and the amendments made by this title may not be construed to preempt, annul, alter, amend, or exempt any person from compliance with any law, ordinance, or regulation of any State or local government with respect to land use, management, or control.

TITLE VI—

GENERAL PROVISIONS
[Section 601 expresses the sense of the Senate with regard to oversight hearings on all matters relating to the Madison Guaranty Savings and Loan Association (“MGS&L”), Whitewater Development Corporation and Capital Management Services Inc. (“CMS”).] [Section 602 consist of technical amendments to other laws.]