[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
INTRODUCTION OF THE NATIVE AMERICAN FINANCIAL SERVICES ORGANIZATION ACT 
                                OF 1994

                                 ______


                          HON. BILL RICHARDSON

                             of new mexico

                    in the house of representatives

                        Friday, October 7, 1994

  Mr. RICHARDSON. Mr. Speaker, today Representative Furse and I are 
introducing the Native American Financial Services Organization Act of 
1994. This bill has been drafted by the Department of Housing and Urban 
Development and we are introducing it at the request of Secretary Henry 
Cisneros.
  Attached is a summary of the bill which I am hoping we will act on in 
the 104th Congress:


      Native American Financial Services Organization Act of 1994

       Based upon the findings of the Commission on American 
     Indian, Alaska Native and Native Hawaiian Housing, the Native 
     American Financial Services Organization Act of 1994 is an 
     attempt to address the need for private financing of home 
     ownership and economic development on and near reservation 
     lands.
       While most federally-sponsored housing and related programs 
     target low- and moderate-income recipients, the housing that 
     would be developed as a result of financing through the 
     proposed legislation would be directed more toward moderate 
     to middle income Native Americans.
       This legislation would establish a limited government 
     chartered corporation to be known as the Native American 
     Financial Services Organization (``NAFSO''). A Federal grant 
     would capitalize the federally-chartered, for-profit NAFSO, 
     whose charter would cease to exist upon a designated date, at 
     which time it would become a private corporation. It is 
     anticipated that tribal contributions would assist the NAFSO 
     in becoming self-sufficient over time.
       The governance of the NAFSO would be vested in a Board of 
     Directors that would be representative of the Native American 
     community. Shares would be equitably distributed among 
     federally-recognized tribes; the Board could elect to 
     distribute additional shares on an investment basis. Several 
     members of the initial Board would be appointed by the 
     President. The Board would have to establish an Advisory 
     Council, consisting of representatives from each of the 12 
     districts established by the BIA, as well as Hawaii.
       It is the purpose of this Act--First, to help serve the 
     mortgage and other lending needs of Native Americans by 
     providing technical assistance to establish and organize 
     Native American community lending institutions that would be 
     called Native American Financial Institutions (NAFIs); NAFIs 
     would be any type of financial institution, including 
     community banks, credit unions and savings banks, and 
     therefore could provide a wide range of financial services;
       Second, to develop and provide financial expertise and 
     technical assistance to NAFIs, including methods of 
     underwriting, securing, servicing, packaging, and selling 
     mortgage and small commercial and consumer loans;
       Third, to develop and provide specialized technical 
     assistance on how to overcome barriers to primary mortgage 
     lending on Native American lands, including issues related to 
     trust, lands, discrimination, and inapplicability of standard 
     underwriting criteria;
       Fourth, to assist in providing mortgage underwriting 
     assistance (but not originate loans) under contract to NAFIs;
       Fifth, to work with Fannie Mae and Freddie Mac, and other 
     participants in the secondary market for residential 
     mortgages in identifying and eliminating barriers to purchase 
     of Native American loans.
       The act would provide new purchase goals for the 
     Government-sponsored housing enterprises, Fannie Mae and 
     Freddie Mac. The consequence of failure to meet a combined 
     goal would be the NAFSO could then purchase and deal in 
     residential mortgage loans originated by NAFIs.
       This legislation would authorize to be appropriated a total 
     of $30 million to establish and operate the NAFSO. Funding 
     would be made available from the CDFI fund, however, this $30 
     million is in addition to the $328 million previously 
     authorized for the CDFI fund. NAFIs are not eligible for 
     additional funding under CDFI if the NAFI elects to receive 
     funding under this Act. The Secretary of Housing and Urban 
     Development would be authorized to provide up to $10 million 
     for the funding of a cooperative agreement for technical 
     assistance and other services to be provided by the NAFSO to 
     NAFIs. In addition, there would be authorized, without fiscal 
     year limitation, $20 million to provide financial assistance 
     through the NAFSO to NAFIs.
       The Office of Federal Housing Enterprise Oversight would 
     regulate matters pertaining to the safety and soundness of 
     the NAFSO and the Department of Housing and Urban Development 
     would have general regulatory authority.

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