[Congressional Record Volume 166, Number 163 (Monday, September 21, 2020)]
[House]
[Pages H4597-H4602]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1600
          ENSURING DIVERSITY IN COMMUNITY BANKING ACT OF 2019

  Mr. SHERMAN. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 5322) to establish or modify requirements relating to 
minority depository institutions, community development financial 
institutions, and impact banks, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5322

       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 ``Ensuring 
     Diversity in Community Banking Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Sense of Congress on funding the loan-loss reserve fund for 
              small dollar loans.
Sec. 3. Definitions.
Sec. 4. Inclusion of women's banks in the definition of minority 
              depository institution.
Sec. 5. Establishment of impact bank designation.
Sec. 6. Minority Depositories Advisory Committees.
Sec. 7. Federal deposits in minority depository institutions.
Sec. 8. Minority Bank Deposit Program.
Sec. 9. Diversity report and best practices.
Sec. 10. Investments in minority depository institutions and impact 
              banks.
Sec. 11. Report on covered mentor-protege programs.
Sec. 12. Custodial deposit program for covered minority depository 
              institutions and impact banks.
Sec. 13. Streamlined community development financial institution 
              applications and reporting.
Sec. 14. Task force on lending to small business concerns.
Sec. 15. Discretionary surplus funds.
Sec. 16. Determination of Budgetary Effects.

     SEC. 2. SENSE OF CONGRESS ON FUNDING THE LOAN-LOSS RESERVE 
                   FUND FOR SMALL DOLLAR LOANS.

       The sense of Congress is the following:
       (1) The Community Development Financial Institutions Fund 
     (the ``CDFI Fund'') is an agency of the Department of the 
     Treasury, and was established by the Riegle Community 
     Development and Regulatory Improvement Act of 1994. The 
     mission of the CDFI Fund is ``to expand economic opportunity 
     for underserved people and communities by supporting the 
     growth and capacity of a national network of community 
     development lenders, investors, and financial service 
     providers''. A community development financial institution (a 
     ``CDFI'') is a specialized financial institution serving low-
     income communities and a Community Development Entity (a 
     ``CDE'') is a domestic corporation or partnership that is an 
     intermediary vehicle for the provision of loans, investments, 
     or financial counseling in low-income communities. The CDFI 
     Fund certifies CDFIs and CDEs. Becoming a certified CDFI or 
     CDE allows organizations to participate in various CDFI Fund 
     programs as follows:
       (A) The Bank Enterprise Award Program, which provides FDIC-
     insured depository institutions awards for a demonstrated 
     increase in lending and investments in distressed communities 
     and CDFIs.
       (B) The CDFI Program, which provides Financial and 
     Technical Assistance awards to CDFIs to reinvest in the CDFI, 
     and to build the capacity of the CDFI, including financing 
     product development and loan loss reserves.
       (C) The Native American CDFI Assistance Program, which 
     provides CDFIs and sponsoring entities Financial and 
     Technical Assistance awards to increase lending and grow the 
     number of CDFIs owned by Native Americans to help build 
     capacity of such CDFIs.
       (D) The New Market Tax Credit Program, which provides tax 
     credits for making equity investments in CDEs that stimulate 
     capital investments in low-income communities.
       (E) The Capital Magnet Fund, which provides awards to CDFIs 
     and nonprofit affordable housing organizations to finance 
     affordable housing solutions and related economic development 
     activities.
       (F) The Bond Guarantee Program, a source of long-term, 
     patient capital for CDFIs to expand lending and investment 
     capacity for community and economic development purposes.
       (2) The Department of the Treasury is authorized to create 
     multi-year grant programs designed to encourage low-to-
     moderate income individuals to establish accounts at 
     federally insured banks, and to improve low-to-moderate 
     income individuals' access to such accounts on reasonable 
     terms.
       (3) Under this authority, grants to participants in CDFI 
     Fund programs may be used for loan-loss reserves and to 
     establish small-dollar loan programs by subsidizing related 
     losses. These grants also allow for the providing recipients 
     with the financial counseling and education necessary to 
     conduct transactions and manage their accounts. These loans 
     provide low-cost alternatives to payday loans and other 
     nontraditional forms of financing that often impose excessive 
     interest rates and fees on borrowers, and lead millions of 
     Americans to fall into debt traps. Small-dollar loans can 
     only be made pursuant to terms, conditions, and practices 
     that are reasonable for the individual consumer obtaining the 
     loan.
       (4) Program participation is restricted to eligible 
     institutions, which are limited to organizations listed in 
     section 501(c)(3) of the Internal Revenue Code and exempt 
     from tax under 501(a) of such Code, federally insured 
     depository institutions, community development financial 
     institutions and State, local, or Tribal government entities.
       (5) Since its founding, the CDFI Fund has awarded over 
     $3,300,000,000 to CDFIs and CDEs, allocated $54,000,000,000 
     in tax credits,

[[Page H4598]]

     and $1,510,000,000 in bond guarantees. According to the CDFI 
     Fund, some programs attract as much as $10 in private capital 
     for every $1 invested by the CDFI Fund. The Administration 
     and the Congress should prioritize appropriation of funds for 
     the loan loss reserve fund and technical assistance programs 
     administered by the Community Development Financial 
     Institution Fund.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Community development financial institution.--The term 
     ``community development financial institution'' has the 
     meaning given under section 103 of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4702).
       (2) Minority depository institution.--The term ``minority 
     depository institution'' has the meaning given under section 
     308 of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1463 note), as amended by 
     this Act.

     SEC. 4. INCLUSION OF WOMEN'S BANKS IN THE DEFINITION OF 
                   MINORITY DEPOSITORY INSTITUTION.

       Section 308(b)(1) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) 
     is amended--
       (1) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively;
       (2) by striking ``means any'' and inserting the following: 
     ``means--
       ``(A) any''; and
       (3) in clause (iii) (as so redesignated), by striking the 
     period at the end and inserting ``; or''; and
       (4) by inserting at the end the following new subparagraph:
       ``(B) any bank described in clause (i), (ii), or (iii) of 
     section 19(b)(1)(A) of the Federal Reserve Act--
       ``(i) more than 50 percent of the outstanding shares of 
     which are held by 1 or more women; and
       ``(ii) the majority of the directors on the board of 
     directors of which are women.''.

     SEC. 5. ESTABLISHMENT OF IMPACT BANK DESIGNATION.

       (a) In General.--Each Federal banking agency shall 
     establish a program under which a depository institution with 
     total consolidated assets of less than $10,000,000,000 may 
     elect to be designated as an impact bank if the total dollar 
     value of the loans extended by such depository institution to 
     low-income borrowers is greater than or equal to 50 percent 
     of the assets of such bank.
       (b) Notification of Eligibility.--Based on data obtained 
     through examinations of depository institutions, the 
     appropriate Federal banking agency shall notify a depository 
     institution if the institution is eligible to be designated 
     as an impact bank.
       (c) Application.--Regardless of whether or not it has 
     received a notice of eligibility under subsection (b), a 
     depository institution may submit an application to the 
     appropriate Federal banking agency--
       (1) requesting to be designated as an impact bank; and
       (2) demonstrating that the depository institution meets the 
     applicable qualifications.
       (d) Limitation on Additional Data Requirements.--The 
     Federal banking agencies may only impose additional data 
     collection requirements on a depository institution under 
     this section if such data is--
       (1) necessary to process an application submitted by the 
     depository institution to be designated an impact bank; or
       (2) with respect to a depository institution that is 
     designated as an impact bank, necessary to ensure the 
     depository institution's ongoing qualifications to maintain 
     such designation.
       (e) Removal of Designation.--If the appropriate Federal 
     banking agency determines that a depository institution 
     designated as an impact bank no longer meets the criteria for 
     such designation, the appropriate Federal banking agency 
     shall rescind the designation and notify the depository 
     institution of such rescission.
       (f) Reconsideration of Designation; Appeals.--Under such 
     procedures as the Federal banking agencies may establish, a 
     depository institution may--
       (1) submit to the appropriate Federal banking agency a 
     request to reconsider a determination that such depository 
     institution no longer meets the criteria for the designation; 
     or
       (2) file an appeal of such determination.
       (g) Rulemaking.--Not later than 1 year after the date of 
     the enactment of this Act, the Federal banking agencies shall 
     jointly issue rules to carry out the requirements of this 
     section, including by providing a definition of a low-income 
     borrower.
       (h) Reports.--Each Federal banking agency shall submit an 
     annual report to the Congress containing a description of 
     actions taken to carry out this section.
       (i) Federal Deposit Insurance Act Definitions.--In this 
     section, the terms ``depository institution'', ``appropriate 
     Federal banking agency'', and ``Federal banking agency'' have 
     the meanings given such terms, respectively, in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813).

     SEC. 6. MINORITY DEPOSITORIES ADVISORY COMMITTEES.

       (a) Establishment.--Each covered regulator shall establish 
     an advisory committee to be called the ``Minority 
     Depositories Advisory Committee''.
       (b) Duties.--Each Minority Depositories Advisory Committee 
     shall provide advice to the respective covered regulator on 
     meeting the goals established by section 308 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 1463 note) to preserve the present number of 
     covered minority institutions, preserve the minority 
     character of minority-owned institutions in cases involving 
     mergers or acquisitions, provide technical assistance, and 
     encourage the creation of new covered minority institutions. 
     The scope of the work of each such Minority Depositories 
     Advisory Committee shall include an assessment of the current 
     condition of covered minority institutions, what regulatory 
     changes or other steps the respective agencies may be able to 
     take to fulfill the requirements of such section 308, and 
     other issues of concern to covered minority institutions.
       (c) Membership.--
       (1) In general.--Each Minority Depositories Advisory 
     Committee shall consist of no more than 10 members, who--
       (A) shall serve for one two-year term;
       (B) shall serve as a representative of a depository 
     institution or an insured credit union with respect to which 
     the respective covered regulator is the covered regulator of 
     such depository institution or insured credit union; and
       (C) shall not receive pay by reason of their service on the 
     advisory committee, but may receive travel or transportation 
     expenses in accordance with section 5703 of title 5, United 
     States Code.
       (2) Diversity.--To the extent practicable, each covered 
     regulator shall ensure that the members of the Minority 
     Depositories Advisory Committee of such agency reflect the 
     diversity of covered minority institutions.
       (d) Meetings.--
       (1) In general.--Each Minority Depositories Advisory 
     Committee shall meet not less frequently than twice each 
     year.
       (2) Notice and invitations.--Each Minority Depositories 
     Advisory Committee shall--
       (A) notify the Committee on Financial Services of the House 
     of Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate in advance of each meeting of the 
     Minority Depositories Advisory Committee; and
       (B) invite the attendance at each meeting of the Minority 
     Depositories Advisory Committee of--
       (i) one member of the majority party and one member of the 
     minority party of the Committee on Financial Services of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate; and
       (ii) one member of the majority party and one member of the 
     minority party of any relevant subcommittees of such 
     committees.
       (e) No Termination of Advisory Committees.--The termination 
     requirements under section 14 of the Federal Advisory 
     Committee Act (5 U.S.C. app.) shall not apply to a Minority 
     Depositories Advisory Committee established pursuant to this 
     section.
       (f) Definitions.--In this section:
       (1) Covered regulator.--The term ``covered regulator'' 
     means the Comptroller of the Currency, the Board of Governors 
     of the Federal Reserve System, the Federal Deposit Insurance 
     Corporation, and the National Credit Union Administration.
       (2) Covered minority institution.--The term ``covered 
     minority institution'' means a minority depository 
     institution (as defined in section 308(b) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 1463 note)).
       (3) Depository institution.--The term ``depository 
     institution'' has the meaning given under section 3 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813).
       (4) Insured credit union.--The term ``insured credit 
     union'' has the meaning given in section 101 of the Federal 
     Credit Union Act (12 U.S.C. 1752).
       (g) Technical Amendment.--Section 308(b) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 1463 note) is amended by adding at the end the 
     following new paragraph:
       ``(3) Depository institution.--The term `depository 
     institution' means an `insured depository institution' (as 
     defined in section 3 of the Federal Deposit Insurance Act (12 
     U.S.C. 1813)) and an insured credit union (as defined in 
     section 101 of the Federal Credit Union Act (12 U.S.C. 
     1752)).''.

     SEC. 7. FEDERAL DEPOSITS IN MINORITY DEPOSITORY INSTITUTIONS.

       (a) In General.--Section 308 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 
     note) is amended--
       (1) by adding at the end the following new subsection:
       ``(d) Federal Deposits.--The Secretary of the Treasury 
     shall ensure that deposits made by Federal agencies in 
     minority depository institutions and impact banks are 
     collateralized or insured, as determined by the Secretary. 
     Such deposits shall include reciprocal deposits as defined in 
     section 337.6(e)(2)(v) of title 12, Code of Federal 
     Regulations (as in effect on March 6, 2019).''; and
       (2) in subsection (b), as amended by section 6(g), by 
     adding at the end the following new paragraph:
       ``(4) Impact bank.--The term `impact bank' means a 
     depository institution designated by the appropriate Federal 
     banking agency pursuant to section 5 of the Ensuring 
     Diversity in Community Banking Act.''.
       (b) Technical Amendments.--Section 308 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 1463 note) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``section--'' and inserting ``section:''; and

[[Page H4599]]

       (2) in the paragraph heading for paragraph (1), by striking 
     ``financial'' and inserting ``depository''.

     SEC. 8. MINORITY BANK DEPOSIT PROGRAM.

       (a) In General.--Section 1204 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note) is amended to read as follows:

     ``SEC. 1204. EXPANSION OF USE OF MINORITY DEPOSITORY 
                   INSTITUTIONS.

       ``(a) Minority Bank Deposit Program.--
       ``(1) Establishment.--There is established a program to be 
     known as the `Minority Bank Deposit Program' to expand the 
     use of minority depository institutions.
       ``(2) Administration.--The Secretary of the Treasury, 
     acting through the Fiscal Service, shall--
       ``(A) on application by a depository institution or credit 
     union, certify whether such depository institution or credit 
     union is a minority depository institution;
       ``(B) maintain and publish a list of all depository 
     institutions and credit unions that have been certified 
     pursuant to subparagraph (A); and
       ``(C) periodically distribute the list described in 
     subparagraph (B) to--
       ``(i) all Federal departments and agencies;
       ``(ii) interested State and local governments; and
       ``(iii) interested private sector companies.
       ``(3) Inclusion of certain entities on list.--A depository 
     institution or credit union that, on the date of the 
     enactment of this section, has a current certification from 
     the Secretary of the Treasury stating that such depository 
     institution or credit union is a minority depository 
     institution shall be included on the list described under 
     paragraph (2)(B).
       ``(b) Expanded Use Among Federal Departments and 
     Agencies.--
       ``(1) In general.--Not later than 1 year after the 
     establishment of the program described in subsection (a), the 
     head of each Federal department or agency shall develop and 
     implement standards and procedures to prioritize, to the 
     maximum extent possible as permitted by law and consistent 
     with principles of sound financial management, the use of 
     minority depository institutions to hold the deposits of each 
     such department or agency.
       ``(2) Report to congress.--Not later than 2 years after the 
     establishment of the program described in subsection (a), and 
     annually thereafter, the head of each Federal department or 
     agency shall submit to Congress a report on the actions taken 
     to increase the use of minority depository institutions to 
     hold the deposits of each such department or agency.
       ``(c) Definitions.--For purposes of this section:
       ``(1) Credit union.--The term `credit union' has the 
     meaning given the term `insured credit union' in section 101 
     of the Federal Credit Union Act (12 U.S.C. 1752).
       ``(2) Depository institution.--The term `depository 
     institution' has the meaning given in section 3 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813).
       ``(3) Minority depository institution.--The term `minority 
     depository institution' has the meaning given that term under 
     section 308 of this Act.''.
       (b) Conforming Amendments.--The following provisions are 
     amended by striking ``1204(c)(3)'' and inserting ``1204(c)'':
       (1) Section 808(b)(3) of the Community Reinvestment Act of 
     1977 (12 U.S.C. 2907(b)(3)).
       (2) Section 40(g)(1)(B) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1831q(g)(1)(B)).
       (3) Section 704B(h)(4) of the Equal Credit Opportunity Act 
     (15 U.S.C. 1691c-2(h)(4)).

     SEC. 9. DIVERSITY REPORT AND BEST PRACTICES.

       (a) Annual Report.--Each covered regulator shall submit to 
     Congress an annual report on diversity including the 
     following:
       (1) Data, based on voluntary self-identification, on the 
     racial, ethnic, and gender composition of the examiners of 
     each covered regulator, disaggregated by length of time 
     served as an examiner.
       (2) The status of any examiners of covered regulators, 
     based on voluntary self-identification, as a veteran.
       (3) Whether any covered regulator, as of the date on which 
     the report required under this section is submitted, has 
     adopted a policy, plan, or strategy to promote racial, 
     ethnic, and gender diversity among examiners of the covered 
     regulator.
       (4) Whether any special training is developed and provided 
     for examiners related specifically to working with depository 
     institutions and credit unions that serve communities that 
     are predominantly minorities, low income, or rural, and the 
     key focus of such training.
       (b) Best Practices.--Each Office of Minority and Women 
     Inclusion of a covered regulator shall develop, provide to 
     the head of the covered regulator, and make publicly 
     available best practices--
       (1) for increasing the diversity of candidates applying for 
     examiner positions, including through outreach efforts to 
     recruit diverse candidate to apply for entry-level examiner 
     positions; and
       (2) for retaining and providing fair consideration for 
     promotions within the examiner staff for purposes of 
     achieving diversity among examiners.
       (c) Covered Regulator Defined.--In this section, the term 
     ``covered regulator'' means the Comptroller of the Currency, 
     the Board of Governors of the Federal Reserve System, the 
     Federal Deposit Insurance Corporation, and the National 
     Credit Union Administration.

     SEC. 10. INVESTMENTS IN MINORITY DEPOSITORY INSTITUTIONS AND 
                   IMPACT BANKS.

       (a) Control for Certain Institutions.--Section 7(j)(8)(B) 
     of the Federal Deposit Insurance Act (12 U.S.C. 
     1817(j)(8)(B)) is amended to read as follows:
       ``(B) `control' means the power, directly or indirectly--
       ``(i) to direct the management or policies of an insured 
     depository institution; or
       ``(ii)(I) with respect to an insured depository 
     institution, of a person to vote 25 per centum or more of any 
     class of voting securities of such institution; or
       ``(II) with respect to an insured depository institution 
     that is an impact bank (as designated pursuant to section 5 
     of the Ensuring Diversity in Community Banking Act) or a 
     minority depository institution (as defined in section 308(b) 
     of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989), of an individual to vote 30 percent 
     or more of any class of voting securities of such an impact 
     bank or a minority depository institution.''.
       (b) Rulemaking.--The Federal banking agencies (as defined 
     in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
     1813)) shall jointly issue rules for de novo minority 
     depository institutions and de novo impact banks (as 
     designated pursuant to section 5) to allow 3 years to meet 
     the capital requirements otherwise applicable to minority 
     depository institutions and impact banks.
       (c) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Federal banking agencies shall 
     jointly submit to Congress a report on--
       (1) the principal causes for the low number of de novo 
     minority depository institutions during the 10-year period 
     preceding the date of the report;
       (2) the main challenges to the creation of de novo minority 
     depository institutions and de novo impact banks; and
       (3) regulatory and legislative considerations to promote 
     the establishment of de novo minority depository institutions 
     and de novo impact banks.

     SEC. 11. REPORT ON COVERED MENTOR-PROTEGE PROGRAMS.

       (a) Report.--Not later than 6 months after the date of the 
     enactment of this Act and annually thereafter, the Secretary 
     of the Treasury shall submit to Congress a report on 
     participants in a covered mentor-protege program, including--
       (1) an analysis of outcomes of such program;
       (2) the number of minority depository institutions that are 
     eligible to participate in such program but do not have large 
     financial institution mentors; and
       (3) recommendations for how to match such minority 
     depository institutions with large financial institution 
     mentors.
       (b) Definitions.--In this section:
       (1) Covered mentor-protege program.--The term ``covered 
     mentor-protege program'' means a mentor-protege program 
     established by the Secretary of the Treasury pursuant to 
     section 45 of the Small Business Act (15 U.S.C. 657r).
       (2) Large financial institution.--The term ``large 
     financial institution'' means any entity--
       (A) regulated by the Comptroller of the Currency, the Board 
     of Governors of the Federal Reserve System, the Federal 
     Deposit Insurance Corporation, or the National Credit Union 
     Administration; and
       (B) that has total consolidated assets greater than or 
     equal to $50,000,000,000.

     SEC. 12. CUSTODIAL DEPOSIT PROGRAM FOR COVERED MINORITY 
                   DEPOSITORY INSTITUTIONS AND IMPACT BANKS.

       (a) In General.--Not later than one year after the date of 
     the enactment of this Act, the Secretary of the Treasury 
     shall issue rules establishing a custodial deposit program 
     under which a covered bank may receive deposits from a 
     qualifying account.
       (b) Requirements.--In issuing rules under subsection (a), 
     the Secretary of the Treasury shall--
       (1) consult with the Federal banking agencies;
       (2) ensure each covered bank participating in the program 
     established under this section--
       (A) has appropriate policies relating to management of 
     assets, including measures to ensure the safety and soundness 
     of each such covered bank; and
       (B) is compliant with applicable law; and
       (3) ensure, to the extent practicable that the rules do not 
     conflict with goals described in section 308(a) of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 1463 note).
       (c) Limitations.--
       (1) Deposits.--With respect to the funds of an individual 
     qualifying account, an entity may not deposit an amount 
     greater than the insured amount in a single covered bank.
       (2) Total deposits.--The total amount of funds deposited in 
     a covered bank under the custodial deposit program described 
     under this section may not exceed the lesser of--
       (A) 10 percent of the average amount of deposits held by 
     such covered bank in the previous quarter; or
       (B) $100,000,000 (as adjusted for inflation).
       (d) Report.--Each quarter, the Secretary of the Treasury 
     shall submit to Congress a report on the implementation of 
     the program established under this section including 
     information identifying participating covered

[[Page H4600]]

     banks and the total amount of deposits received by covered 
     banks under the program.
       (e) Definitions.--In this section:
       (1) Covered bank.--The term ``covered bank'' means--
       (A) a minority depository institution that is well 
     capitalized, as defined by the appropriate Federal banking 
     agency; or
       (B) a depository institution designated pursuant to section 
     5 of the Ensuring Diversity in Community Banking Act that is 
     well capitalized, as defined by the appropriate Federal 
     banking agency.
       (2) Insured amount.--The term ``insured amount'' means the 
     amount that is the greater of--
       (A) the standard maximum deposit insurance amount (as 
     defined in section 11(a)(1)(E) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(a)(1)(E))); or
       (B) such higher amount negotiated between the Secretary of 
     the Treasury and the Federal Deposit Insurance Corporation 
     under which the Corporation will insure all deposits of such 
     higher amount.
       (3) Federal banking agencies.--The terms ``appropriate 
     Federal banking agency'' and ``Federal banking agencies'' 
     have the meaning given those terms, respectively, under 
     section 3 of the Federal Deposit Insurance Act.
       (4) Qualifying account.--The term ``qualifying account'' 
     means any account established in the Department of the 
     Treasury that--
       (A) is controlled by the Secretary; and
       (B) is expected to maintain a balance greater than 
     $200,000,000 for the following 24-month period.

     SEC. 13. STREAMLINED COMMUNITY DEVELOPMENT FINANCIAL 
                   INSTITUTION APPLICATIONS AND REPORTING.

       (a) Application Processes.--Not later than 12 months after 
     the date of the enactment of this Act and with respect to any 
     person having assets under $3,000,000,000 that submits an 
     application for deposit insurance with the Federal Deposit 
     Insurance Corporation that could also become a community 
     development financial institution, the Federal Deposit 
     Insurance Corporation, in consultation with the Administrator 
     of the Community Development Financial Institutions Fund, 
     shall--
       (1) develop systems and procedures to record necessary 
     information to allow the Administrator to conduct preliminary 
     analysis for such person to also become a community 
     development financial institution; and
       (2) develop procedures to streamline the application and 
     annual certification processes and to reduce costs for such 
     person to become, and maintain certification as, a community 
     development financial institution.
       (b) Implementation Report.--Not later than 18 months after 
     the date of the enactment of this Act, the Federal Deposit 
     Insurance Corporation shall submit to Congress a report 
     describing the systems and procedures required under 
     subsection (a).
       (c) Annual Report.--
       (1) In general.--Section 17(a)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1827(a)(1)) is amended--
       (A) in subparagraph (E), by striking ``and'' at the end;
       (B) by redesignating subparagraph (F) as subparagraph (G);
       (C) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) applicants for deposit insurance that could also 
     become a community development financial institution (as 
     defined in section 103 of the Riegle Community Development 
     and Regulatory Improvement Act of 1994), a minority 
     depository institution (as defined in section 308 of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989), or an impact bank (as designated pursuant to 
     section 5 of the Ensuring Diversity in Community Banking 
     Act); and''.
       (2) Application.--The amendment made by this subsection 
     shall apply with respect to the first report to be submitted 
     after the date that is 2 years after the date of the 
     enactment of this Act.

     SEC. 14. TASK FORCE ON LENDING TO SMALL BUSINESS CONCERNS.

       (a) In General.--Not later than 6 months after the date of 
     the enactment of this Act, the Administrator of the Small 
     Business Administration shall establish a task force to 
     examine methods for improving relationships between the Small 
     Business Administration and community development financial 
     institutions, minority depository institutions, and Impact 
     Banks to increase the volume of loans provided by such 
     institutions to small business concerns (as defined under 
     section 3 of the Small Business Act (15 U.S.C. 632)).
       (b) Report to Congress.--Not later than 18 months after the 
     establishment of the task force described in subsection (a), 
     the Administrator of the Small Business Administration shall 
     submit to Congress a report on the findings of such task 
     force.

     SEC. 15. DISCRETIONARY SURPLUS FUNDS.

       (a) In General.--Subparagraph (A) of section 7(a)(3) of the 
     Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by 
     reducing the dollar figure described in such subparagraph by 
     $1,400,000,000.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on September 30, 2030.

     SEC. 16. DETERMINATION OF BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the House Budget Committee, provided that such 
     statement has been submitted prior to the vote on passage.

  The SPEAKER pro tempore (Mr. Beyer). Pursuant to the rule, the 
gentleman from California (Mr. Sherman) and the gentleman from South 
Carolina (Mr. Timmons) each will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. SHERMAN. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  I rise in strong support of H.R. 5322, the Ensuring Diversity in 
Community Banking Act of 2019. I would like to thank Mr. Meeks, the 
chairman of the Consumer Protection and Financial Institutions 
Subcommittee for his leadership on this important issue.
  For over 22 years I have worked and watched Mr. Meeks as he has 
devoted prodigious quantities of his time and his considerable talents 
to the matters of the Financial Services Committee, and H.R. 5322 
reflects that kind of skill and effort.
  The Financial Services Committee under the chairmanship of Ms. Waters 
and Chairman Meeks of the subcommittee have prioritized examining the 
important role of minority depository institutions, MDIs, and the role 
they play in our financial system, and we have worked on developing 
policies to support their efforts.
  Over the course of a series of hearings in this Congress, the 
committee has engaged with bank and credit union CEOs, with consumer 
groups, with experts and regulators all about how Congress can help or 
reverse the decline in our Nation's minority depository institutions, 
MDIs, particularly Black-owned banks.
  This is important because the data shows that MDIs serve the credit 
needs of low-income areas and serve them well and that these areas have 
a high percentage of the unbanked and underbanked.
  Unfortunately, these institutions have shrunk in numbers in recent 
years. The number peaked in 2008 at 215 MDI banks. Now that number is 
at just 143 MDI banks as of the second quarter of 2020, representing 
less than 3 percent of all FDIC-insured institutions.
  In 2008 we had 41 Black-owned banks, and today we have 18. This calls 
for congressional action.
  Furthermore, during this pandemic, low-income and minority 
communities have been hit the hardest. MDIs along with community 
development financial institutions, CDFIs, have delivered relief to 
these low-income communities during this pandemic. After Chairwoman 
Waters and the other members of this committee fought hard to ensure 
that MDIs and CDFIs could participate in the Paycheck Protection 
Program, MDIs and CDFIs were able to provide some $16 billion of loans 
to over 220,000 small businesses and minority-owned businesses across 
the country.
  But Congress must do more to support these institutions. Toward that 
end, H.R. 5322 provides a series of reforms that will preserve, grow, 
and encourage the chartering of new MDIs, as well as promote the 
effective engagement between MDIs and prudential regulators.
  This bill will encourage investments in MDIs, in part by 
strengthening a minority bank deposit program so that Treasury deposits 
Federal funds, funds which it manages in MDIs, thus providing MDIs with 
more funds that they can then lend.
  Furthermore, the bill encourages more partnerships between MDIs and 
large banks through the Department of Treasury's mentor-protege 
program, which should promote information sharing and more investments 
in MDIs.
  The bill also creates a new category of small banks called ``impact 
banks'' that provide most of their lending to

[[Page H4601]]

low-income borrowers and would also benefit from some of the bill's 
provisions to ensure that we can do all we can to support low-income 
and minority communities.
  We also appreciate the collaboration demonstrated by ranking member 
of the full committee Mr. McHenry and other committee Republicans, as 
this bill was voted out of the committee in December by a unanimous 
vote of 52-0.
  This bill has broad support, including from the National Bankers 
Association, the Independent Community Bankers of America, the American 
Bankers Association, the Credit Union National Association, and the 
National Association of Federally-Insured Credit Unions.
  Mr. Speaker, I urge Members to support H.R. 5322, and I reserve the 
balance of my time.
  Mr. TIMMONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I thank the gentleman from New York for introducing this 
bill. He has worked in good faith with Republican Members over the past 
year to reach a bipartisan solution on this important issue.
  The Financial Services Committee has held several hearings over the 
past year on the state of minority depository institutions, or MDIs, 
and community development financial institutions, or CDFIs.
  Both MDIs and CDFIs provide critical services and support to their 
communities. Unfortunately, the number of these institutions has been 
declining at an alarming rate.
  Burdensome regulations and a lack of access to capital have caused 
many of these MDIs to either consolidate or be forced to shut their 
doors for good. It is simply too hard for these smaller institutions to 
remain viable in the current environment.
  The bill we are considering today promotes policies and establishes 
programs to support MDIs and CDFIs and the customers and communities 
they serve.
  Importantly, the bill seeks to promote engagement in the Department 
of the Treasury's mentor-protege program to encourage collaboration 
between MDIs and institutions that act as financial agents for the 
Federal Government.
  The bill also directs each of the Federal banking regulators to 
establish MDI advisory councils to ensure MDI voices are heard without 
weakening or duplicating current efforts.
  The bill also allows banks to be designated as an impact bank. This 
allows any bank that serves a majority of low-income borrowers to be 
considered as an option to hold government deposits. This program will 
bolster the ability of banks to serve their communities.
  Finally, the bill streamlines the application reporting requirements 
to become and remain a CDFI.
  I appreciate the gentleman from New York for his willingness to work 
with committee Republicans so that we can bring a strong bipartisan 
bill to the floor that supports communities in need.
  Mr. Speaker, I urge my colleagues to support this bill, and I reserve 
the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York (Mr. Meeks), the author of this legislation.
  Mr. MEEKS. Mr. Speaker, I thank the gentleman for yielding. Let me 
just say how proud I am that the House is taking up my bill today, the 
Ensuring Diversity in Community Banking Act.
  I am especially grateful for the support from Financial Services 
Chairwoman Maxine Waters and for her guidance and for working with me 
to make sure that we progress and move this bill.
  I am likewise eternally grateful to Ranking Member McHenry, who 
worked with us very closely to make sure that this bill had true, 
strong bipartisan support. As a result, it passed the House Financial 
Services Committee unanimously. Without that partnership, this would 
not have happened.
  So, I thank both the chair and the ranking member, and all the 
members of this committee, for doing this. This bill passed in 
committee unanimously and has gained the support of consumer advocacy 
groups, civil rights organizations, and the financial services 
industry. We tried to bring everybody together on this, and we did come 
up with a consensus bill.
  Communities of color have borne a disproportionate burden of the 
COVID pandemic, as measured by the infection and mortality rates, as 
well as jobs lost and wealth destroyed. This pandemic and the economic 
crisis it triggered devastated communities that had yet to fully 
recover from the financial crisis of 2008.
  Minority banks, credit unions, and community development financial 
institutions have remained the bright spot during this pandemic, given 
their focus of providing financial services to communities of color and 
low- and moderate-income communities. However, despite their success 
serving these communities, minority depository institutions have been 
disappearing at an alarming rate, leading to expanding banking deserts 
and a growing share of the population vulnerable to payday lenders and 
other predatory financial institutions.
  To address this, this bill does the following:
  Number one, minority depository institutions are smaller than their 
peers, pose no credible systemic risk, and focus overwhelmingly on 
underbanked communities of color, investing in homeownership and small 
business lending, helping to close the wealth gap. My bill makes it 
easier for MDIs that are also community development organizations to 
raise capital from private investors and directs the Federal Government 
to deposit funds that are fully insured with these institutions which 
can on-lend the money in communities that need it.
  Number two, the bill calls on regulators to take greater ownership of 
their own failings in the area of diversity by auditing the diversity 
of the bank examiner corps, publishing the data, and considering how 
their own lack of diversity and lack of special training harms their 
effectiveness.
  Number three, the bill establishes a new impact bank designation for 
those institutions that lend primarily to low-income communities and 
provides these banks access to the deposits programs established by 
this bill.
  Number four, the bill also calls on the Congress to continue 
supporting the CDFI Fund of the Treasury Department.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. SHERMAN. Mr. Speaker, I yield an additional 1 minute to the 
gentleman from New York.
  Mr. MEEKS. Mr. Speaker, the CDFI Fund leverages limited government 
funding to crowd-in significant private sector capital and foster 
innovation, investments, and market-oriented solutions to tackle some 
of our Nation's most persistent challenges in poverty alleviation. This 
program has earned strong bipartisan support historically and proven 
itself immensely valuable during this pandemic.
  Let me also say that what this does is it also helps our small 
businesses in the communities and helps create wealth in communities 
where it is not. With the homeownership aspect, it encourages 
individuals to buy, to own the home and to rent the car because the 
home becomes an appreciating asset and the car the depreciating asset. 
It brings us all together so we can enjoy what has become the American 
Dream.

  Let me close by once again thanking my colleagues for their 
bipartisan support for this important legislation. I thank all of my 
colleagues for working together to make this a better place, and I urge 
all of my colleagues to vote in support of this bill.
  Mr. TIMMONS. Mr. Speaker, I urge my colleagues to support H.R. 5322, 
and I yield back the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself the balance of my time.
  MDIs face several challenges, including the ability to raise capital 
despite overall strong financial performance. They face challenges 
experienced as a result of servicing communities that are often first 
and hardest hit by economic downcycles. This decline is contributing to 
a growing incidence of banking deserts in minority communities.
  This bill will help turn this dangerous tide so that individuals in 
more ZIP Codes will have access to safe banking.
  I again thank Mr. Meeks for authoring this legislation and for all of 
his dedication to the Financial Services Committee. I also thank 
Chairwoman

[[Page H4602]]

Waters and Ranking Member McHenry and the other members of the 
committee.
  Mr. Speaker, I urge Members to support H.R. 5322, and I yield back 
the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Sherman) that the House suspend the 
rules and pass the bill, H.R. 5322, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________