[Congressional Record Volume 168, Number 124 (Tuesday, July 26, 2022)]
[House]
[Pages H7150-H7152]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         PROMOTING NEW AND DIVERSE DEPOSITORY INSTITUTIONS ACT

  Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 4590) to require the Federal banking regulators to jointly 
conduct a study and develop a strategic plan to address challenges 
faced by proposed depository institutions seeking de novo depository 
institution charters; and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4590

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Promoting New and Diverse 
     Depository Institutions Act''.

[[Page H7151]]

  


     SEC. 2. STUDY AND STRATEGIC PLAN.

       (a) In General.--The Federal banking regulators shall 
     jointly--
       (1) conduct a study about the challenges faced by proposed 
     depository institutions, including proposed minority 
     depository institutions, seeking de novo depository 
     institution charters; and
       (2) submit to the Committee on Financial Services of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and publish 
     publically, not later than 18 months after the date of the 
     enactment of this section--
       (A) an analysis based on the study conducted pursuant to 
     paragraph (1);
       (B) any findings from the study conducted pursuant to 
     paragraph (1); and
       (C) any legislative recommendations that the Federal 
     banking regulators developed based on the study conducted 
     pursuant to paragraph (1).
       (b) Strategic Plan.--
       (1) In general.--Not later than 18 months after the date of 
     the enactment of this section, the Federal banking regulators 
     shall jointly submit to the Committee on Financial Services 
     of the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and publish 
     publically a strategic plan based on the study conducted 
     pursuant to subsection (a) and designed to help proposed 
     depository institutions (including proposed minority 
     depository institutions) successfully apply for de novo 
     depository institution charters in a manner that promotes 
     increased availability of banking and financial services, 
     safety and soundness, consumer protection, community 
     reinvestment, financial stability, and a level playing field.
       (2) Contents of strategic plan.--The strategic plan 
     described in paragraph (1) shall--
       (A) promote the chartering of de novo depository 
     institutions, including--
       (i) proposed minority depository institutions; and
       (ii) proposed depository institutions that could be 
     certified as community development financial institutions; 
     and
       (B) describe actions the Federal banking regulators may 
     take that would increase the number of depository 
     institutions located in geographic areas where consumers lack 
     access to a branch of a depository institution.
       (c) Public Involvement.--When conducting the study and 
     developing the strategic plan required by this Act, the 
     Federal banking regulators shall invite comments and other 
     feedback from the public to inform the study and strategic 
     plan.
       (d) Definitions.--In this Act:
       (1) Depository institution.--The term ``depository 
     institution'' has the meaning given in section 3 of the 
     Federal Deposit Insurance Act, and includes a ``Federal 
     credit union'' and a ``State credit union'' as such terms are 
     defined, respectively, under section 101 of the Federal 
     Credit Union Act.
       (2) Community development financial institution.--The term 
     ``community development financial institution'' has the 
     meaning given in section 103 of the Riegle Community 
     Development and Regulatory Improvement Act of 1994.
       (3) Federal banking regulators.--The term ``Federal banking 
     regulators'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Federal 
     Deposit Insurance Corporation, the National Credit Union 
     Administration, and the Director of the Bureau of Consumer 
     Financial Protection.
       (4) Minority depository institution.--The term ``minority 
     depository institution'' has the meaning given in section 
     308(b) of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989.
       (e) Reduction.--
       (1) 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 
     $5,000,000.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on September 30, 2022.

     SEC. 3. 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. Pursuant to the rule, the gentlewoman from 
California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each 
will control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. WATERS. Madam 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 
gentlewoman from California?
  There was no objection.
  Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I support H.R. 4590, the Promoting New and Diverse 
Depository Institutions Act, sponsored by Representative Jake 
Auchincloss, the vice chair of the Financial Services Committee.
  Since the 1980s, we have seen steady consolidation in the number of 
U.S. depository institutions from having roughly 33,000 banks and 
credit unions in 1980 to less than 10,000 today. Over the last decade, 
we have also seen a reduction of 3,300 branches by the four largest 
banks leaving behind banking deserts where residents lack access to a 
nearby branch for basic banking services.
  I have also been troubled by the recent decline of roughly one-third 
of all minority depository institutions, also known as MDIs, and more 
than half of Black-owned banks since the 2008 financial crisis.
  In December 2020, I was pleased to work with Ranking Member McHenry 
and Senators Brown, Crapo, and Warner to reach a bipartisan deal to 
provide $12 billion in capital investments and grants to shore up and 
strengthen existing MDIs as well as community development financial 
institutions, better known as CDFIs.
  But I am still concerned that very few depository institutions, 
especially MDIs, have been newly chartered in recent years while 
banking deserts continue to grow. This bill would help address this 
concern by requiring regulators to study this problem, request feedback 
from the public, and develop a strategic plan so they can take steps to 
encourage the creation of new banks and credit unions, including MDIs 
and CDFIs.
  H.R. 4590 also requires regulators to share with Congress any 
legislative recommendations to further promote the creation of new 
depository institutions, again, including MDIs and CDFIs.
  So I thank Vice Chair Auchincloss for his work on this bill which 
received bipartisan support in our committee.
  Madam Speaker, I urge my colleagues to support H.R. 4590, and I 
reserve the balance of my time.

                              {time}  2120

  Mr. HILL. Madam Speaker, I yield myself such time as I may consume.
  Since the Dodd-Frank Act was enacted, the number of community 
financial institutions has steadily declined. Republicans know this 
trend is due to increased regulatory and compliance burdens banks and 
credit unions face that inhibit their ability to survive, let alone, 
thrive. Republicans have consistently pushed for regulatory rightsizing 
including tailoring regulation, not imposing one-size-fits-all 
requirements.
  H.R. 4950 directs the banking agencies to study ways to promote the 
establishment of new banks and credit unions, including community 
development financial institutions, CDFIs, and minority financial 
institutions.
  This bill requires the banking agencies to report to this body, the 
Congress, on challenges faced by proposed depository institutions and 
to develop a strategic plan to promote establishment of new financial 
institutions.
  The banking agencies will provide the Congress with recommendations 
on how best to propose financial institutions and help them navigate 
that regulatory process.
  H.R. 4950 is a first step toward identifying and addressing the 
challenges posed to the chartering of new banks and credit unions.
  The fact is, Madam Speaker, encouraging the establishment of de novo 
financial institutions will help fill the needs left by bank 
consolidations and bank closures over the past decade. This will 
increase banking options and competition to better serve families, 
small businesses, and our local communities. The loss of local banks 
and credit unions has disproportionately affected rural communities.
  Republicans support efforts to better understand the challenges that 
prospective de novo depository institutions face and identifying the 
solutions to promote a greater number of new charters.
  I urge my colleagues to support this bill, and I reserve the balance 
of my time.
  Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from

[[Page H7152]]

Massachusetts (Mr. Auchincloss), who is also the vice chair of the 
Financial Services Committee.
  Mr. AUCHINCLOSS. Madam Speaker, I will begin by thanking the 
Chairwoman of the Financial Services Committee for her support of this 
legislation and for her career-long support for financial access and 
inclusion; and, also, my colleague from Arkansas' support to make this 
a bipartisan initiative.
  Madam Speaker, our economy has not always worked for all communities 
equally. This is evident in the glaring wealth disparities for American 
families emphasized in the 2019 survey of Consumer Finances Federal 
Reserve Report.
  One way to address these issues is to ensure access to diverse and 
affordable financial services that can help individuals save money and 
help small businesses raise capital. That is why I urge my colleagues 
to vote for my bill, the Promoting New and Diverse Depository 
Institutions Act.
  Over the last several decades, there has been consolidation among 
banks and credit unions. This has effectively limited the products 
available to consumers and artificially driven up costs while closing 
banking branches for people who already did not have many choices.
  My bipartisan bill is the first step to increasing the supply of 
banking services by directing banking regulators to work together to 
address the challenges that new depository institutions, including MDIs 
and CDFIs, face when applying for a charter.
  Starting and maintaining a new bank or credit union is hard work. It 
is the banking regulators' responsibility to measure and mitigate the 
challenges that new banks face.
  MDIs and CDFIs play a unique and vital role in our financial system 
and often have a close relationship with their consumers. By investing 
in and supporting MDIs and CDFIs, Congress can foster economic 
opportunities for people who otherwise are unable to access affordable 
banking services in a system that is already restricted and 
restrictive.
  My bill will help new banks, and in so doing, it will expand access 
to affordable services for unbanked communities. I believe this bill is 
a necessary step toward advancing economic equality in our country, and 
I ask your help to ensure that all Americans have access to affordable 
banking services regardless of their address.
  Mr. HILL. Madam Speaker, let me thank my friend from Massachusetts 
for his passion on this. I spent the better part of half of my career 
in community banking, and I know the consolidation, how it has 
impacted, particularly, rural counties that no longer have a banking 
office.
  And I also know how the regulatory burden has raised the immense 
costs of trying to form a new de novo banking corporation. It is just 
putting it out of reach of many, many groups of civic leaders, 
entrepreneurs, local people and, certainly, those trying to form a 
minority depository institution, or a CDFI.
  So I commend my friend from Massachusetts for his work on this bill. 
It does have bipartisan support. I urge my colleagues to support it.
  In conclusion, Madam Speaker, I include in the Record a letter to the 
Speaker and the minority leader, in addition to the chair and ranking 
member of the House Financial Services Committee from the Independent 
Community Bankers of America expressing their full support of H.R. 
4590.

                                             Independent Community


                                           Bankers of America,

                                                    July 26, 2022.
     Re Support for the Promoting New and Diverse Depository 
         Institutions Act (H.R. 4590).

     Hon. Nancy Pelosi,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Maxine Waters,
     Chairwoman, Committee on Financial Services,
     House of Representatives,
     Washington, DC.
     Hon. Kevin McCarthy,
     Minority Leader,
     House of Representatives,
     Washington, DC.
     Hon. Patrick McHenry,
     Ranking Republican, Committee on Financial Services,
     House of Representatives,
     Washington, DC.
       Dear Speaker Pelosi, Minority Leader McCarthy, Chairwoman 
     Waters, and Ranking Member McHenry:
       On behalf of community banks across the country, with 
     nearly 50,000 locations, I write to thank you for scheduling 
     floor consideration of the Promoting New and Diverse 
     Depository Institutions Act (H.R. 4590), sponsored by Rep. 
     Jake Auchincloss, and to express our support for this 
     legislation. ICBA urges all Members of the House to vote YES 
     on H.R. 4590.
       The Promoting New and Diverse Depository Institutions Act 
     requires the Federal banking regulators to conduct a joint 
     study to assess the challenges faced by proposed depository 
     institutions, including proposed minority depository 
     institutions (MDIs), seeking de novo depository institution 
     charters and to provide legislative recommendations to help 
     these proposed institutions successfully obtain charters. 
     There has been a dearth of de novo charters in the past 
     decade. An infusion of new charters is needed to offset 
     consolidation in the banking sector and create a competitive 
     landscape that will benefit consumers and small businesses 
     alike. Notably, new community bank charters, including new 
     MDI charters, are needed to provide access to capital and 
     banking services that play a pivotal role in reaching 
     unbanked populations and underserved communities across the 
     nation.
       Concrete, actionable proposals are needed to turn the tide 
     of stagnant de novo bank formation. ICBA supports an array of 
     measures, such as phasing in capital standards for de novo 
     banks over a period of three years and allowing for greater 
     flexibility to modify the de novo business plan as conditions 
     warrant. Start-up capital is often the greatest impediment to 
     forming a new bank, and these provisions, among others, would 
     help spur the creation of de novo charters, including MDIs.
       Thank you for your consideration. ICBA looks forward to 
     working with you to advance H.R. 4590 into law.
           Sincerely,
                                             Rebeca Romero Rainey,
                                                  President & CEO.

  Mr. HILL. Madam Speaker, I yield back the balance of my time.
  Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
  H.R. 4590 is supported by a wide range of stakeholders, including 
California & Nevada Credit Union Leagues, Community Development Bankers 
Association, Inclusiv, Independent Community Bankers Association, and 
many others.
  I urge my colleagues to support this bill, and I yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Waters) that the House suspend the 
rules and pass the bill, H.R. 4590, 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.

                          ____________________