[Congressional Record (Bound Edition), Volume 152 (2006), Part 15]
[House]
[Pages 20172-20174]
[From the U.S. Government Publishing Office, www.gpo.gov]




       COMMUNITY DEVELOPMENT INVESTMENT ENHANCEMENTS ACT OF 2006

  Mr. McHENRY. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 6062) to enhance community development investments by 
financial institutions, and for other purposes.
  The Clerk read as follows:

                               H.R. 6062

       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 ``Community Development 
     Investment Enhancements Act of 2006''.

     SEC. 2. ENHANCING THE AUTHORITY FOR NATIONAL BANKS TO MAKE 
                   COMMUNITY DEVELOPMENT INVESTMENTS.

       (a) National Banks.--The last sentence in the paragraph 
     designated as the ``Eleventh.'' of section 5136 of the 
     Revised Statutes of the United States (12 U.S.C. 24) is 
     amended--
       (1) by striking ``10 percent'' each place such term appears 
     and inserting ``15 percent''; and
       (2) by adding at the end the following new sentence: ``The 
     preceding standards and limitations apply to each investment 
     under this paragraph made by a national bank directly and by 
     its subsidiaries.''.
       (b) State Member Banks.--The last sentence of the 23rd 
     undesignated paragraph of section 9 of the Federal Reserve 
     Act (12 U.S.C. 338a) is amended--
       (1) by striking ``10 percent'' each place such term appears 
     and inserting ``15 percent''; and
       (2) by adding at the end the following new sentence: ``The 
     preceding standards and limitations apply to each investment 
     under this paragraph made by a State member bank directly and 
     by its subsidiaries.''.

     SEC. 3. INVESTMENTS BY FEDERAL SAVINGS ASSOCIATIONS 
                   AUTHORIZED TO PROMOTE THE PUBLIC WELFARE.

       (a) In General.--Section 5(c)(3) of the Home Owners' Loan 
     Act (12 U.S.C. 1464(c)) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Direct investments to promote the public welfare.--
       ``(i) In general.--A Federal savings association may make 
     investments designed primarily to promote the public welfare, 
     including the welfare of low- and moderate-income communities 
     or families through the provision of housing, services, and 
     jobs.
       ``(ii) Direct investments or acquisition of interest in 
     other companies.--Investments under clause (i) may be made 
     directly or by purchasing interests in an entity primarily 
     engaged in making such investments.
       ``(iii) Prohibition on unlimited liability.--No investment 
     may be made under this subparagraph which would subject a 
     Federal savings association to unlimited liability to any 
     person.
       ``(iv) Single investment limitation to be established by 
     director.--Subject to clauses (v) and (vi), the Director 
     shall establish, by order or regulation, limits on--

       ``(I) the amount any savings association may invest in any 
     1 project; and
       ``(II) the aggregate amount of investment of any savings 
     association under this subparagraph.

       ``(v) Flexible aggregate investment limitation.--The 
     aggregate amount of investments of any savings association 
     under this subparagraph may not exceed an amount equal to the 
     sum of 5 percent of the savings association's capital stock 
     actually paid in and unimpaired and 5 percent of the savings 
     association's unimpaired surplus, unless--

       ``(I) the Director determines that the savings association 
     is adequately capitalized; and
       ``(II) the Director determines, by order, that the 
     aggregate amount of investments in a higher amount than the 
     limit under this clause will pose no significant risk to the 
     affected deposit insurance fund.

       ``(vi) Maximum aggregate investment limitation.--
     Notwithstanding clause (v), the aggregate amount of 
     investments of any savings association under this 
     subparagraph may not exceed an amount equal to the sum of 15 
     percent of the savings association's capital stock actually 
     paid in and unimpaired and 15 percent of the savings 
     association's unimpaired surplus.
       ``(vii) Investments not subject to other limitation on 
     quality of investments.--No obligation a Federal savings 
     association acquires or retains under this subparagraph shall 
     be taken into account for purposes of the limitation 
     contained in section 28(d) of the Federal Deposit Insurance 
     Act on the acquisition and retention of any corporate debt 
     security not of investment grade.
       ``(viii) Applicability of standards to each investment.--
     The standards and limitations of this subparagraph shall 
     apply to each investment under this subparagraph made by a 
     savings association directly and by its subsidiaries.''.
       (b) Technical and Conforming Amendments.--Section 
     5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C. 
     1464(c)(3)(A)) is amended to read as follows:
       ``(A) [Repealed]''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. McHenry) and the gentleman from Massachusetts (Mr. 
Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina.


                             General Leave

  Mr. McHENRY. Madam Speaker, I ask unanimous consent that all Members 
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 North Carolina?
  There was no objection.
  Mr. McHENRY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, today the House will consider H.R. 6062, the Community 
Development Investment Enhancements Act of 2006.
  I first want to commend Chairman Oxley and Ranking Member Frank for 
their leadership on the Financial Services Committee for introducing 
this legislation.
  It is comprised of two major provisions from H.R. 3505, the Financial 
Services Regulatory Relief Act of 2005, which the House passed last 
March by a vote of 415-2. H.R. 3505 provides comprehensive regulatory 
relief to the financial services industry and its regulators. Those two 
sections were not included in the Senate-passed regulatory relief bill, 
S. 2856.
  H.R. 6062 increases the authority of banks and, for the first time, 
gives authority to thrifts to invest in projects that benefit low- and 
moderate-income communities throughout the Nation. Existing authority 
for banks has already resulted in banks making more than $16 billion 
worth of investments since the law was enacted in 1992. Those 
investments provide housing, community services, as well as jobs, and 
many of them help banks meet their obligations under the Community 
Reinvestment Act.
  The amount of investments that any one bank can make is limited to 5 
percent of its capital and surplus, unless the Comptroller of the 
Currency determines that a higher amount will pose no significant risk 
to the deposit insurance fund and the bank is adequately capitalized.
  However, in no case may OCC permit a bank's aggregate investments to 
exceed 10 percent. Some banks are approaching the limit. This bill 
raises the ceiling to 15 percent for banks. Currently, Federal thrift 
institutions have no such authority, but H.R. 6062 grants thrifts, 
overseen by the Office of Thrift Supervision, the same authority as 
banks.
  Madam Speaker, I urge my colleagues to support passage of 6062.
  Madam Speaker, I retain the balance of my time.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself 2 minutes.
  The gentleman from North Carolina has more than adequately explained 
it. I do just want to comment on the procedure.
  A version of this is included in the earlier bill we passed today 
providing regulatory relief. We have two versions. This is the way it 
should be. What we did earlier is what the Senate will accept. So it 
was important for us to show what it should be. The Senate will go 
apparently part of the way. There have been negotiations and 
conversations. There were things in there, like including thrifts, that 
the Senate was not willing to accept; but there will be another 
legislative session.
  It seems to me the better part of wisdom and better part of public 
policy is to take what we can now, and that is what we have done. I 
think this will

[[Page 20173]]

prove to be a good thing and that it will help us make the case for, in 
fact, doing everything that we wanted to do.
  I just at this point, Madam Speaker, include into the Record letters 
in support of the original bill, but also obviously in favor of the 
other version that we did because that is all we could get through on 
the other side from the Office of Thrift Supervision and the 
Comptroller of the Currency.

                                     Office of Thrift Supervision,


                                   Department of the Treasury,

                               Washington, DC, September 25, 2006.
     Hon. Barney Frank
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Congressman Frank: I want to thank you for your work 
     on H.R. 6062, the ``Community Development Investment 
     Enhancements Act of 2006,'' and offer my support for your 
     bill. Originally included as Sections 202 and 112 of H.R. 
     3505, the ``Financial Services Regulatory Relief Act of 
     2005,'' which passed the full House of Representatives, this 
     legislation is especially important to supporting important 
     community development programs.
       In particular, your bill increases the ability of federal 
     thrifts to make investments primarily designed to promote the 
     public welfare of low- and moderate-income communities and 
     families through the provision of housing, services, and 
     jobs. H.R. 6062 accomplishes this by raising the limits on 
     the ability of federal thrifts to invest in entities 
     primarily engaged in making these public welfare investments.
       While we are encouraged that the original Regulatory Relief 
     Act, H.R. 3505, may be enacted in the next few weeks, we 
     strongly support passage of H.R. 6062 as a freestanding bill 
     if it is not included in the broader package. Just as it is 
     important to reduce burdens on financial institutions in 
     order to remove unnecessary regulatory obstacles that hinder 
     profitability, innovation, and competition in our financial 
     services industry, it is equally important to remove barriers 
     to the growth and stability of low- and moderate-income 
     communities.
       Thank you for your leadership and continued interest is 
     this issue. We applaud your efforts and urge swift action on 
     H.R. 6062. If you have any questions, please do not hesitate 
     to contact me or Kevin Petrasic, Managing Director of 
     External Affairs, at 202-906-6452.
           Respectfully yours,
                                                    John M. Reich,
     Director.
                                  ____



                              Administrator of National Banks,

                               Washington, DC, September 18, 2006.
     Hon. Barney Frank,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Congressman Frank: Thank you for joining with 
     Financial Services Committee Chairman Michael G. Oxley to 
     introduce H.R. 6062, which would increase the authority of 
     banks and thrifts of all charter types to invest in projects 
     which benefit low- and moderate-income communities. I have 
     previously indicated my strong support for provisions like 
     those in H.R. 6062, and I strongly support this legislation 
     as well.
       Changes in national bank investment authority provided by 
     H.R. 6062 have the potential to support as much as $30 
     billion in aggregate private investment to help revitalize 
     local communities across the nation. The legislation offers a 
     unique opportunity to boost community redevelopment through 
     private sector investments. Commitments by national banks 
     under existing authority have a proven track record of 
     success with over $16 billion of investments in community 
     development in every state in the nation--without the use of 
     any taxpayer funds. A list of examples of such investments by 
     national banks is enclosed.
       Increasing allowable investments by banks and thrifts from 
     10% of capital and surplus to 15% will enhance the flow of 
     funds for critically needed community development initiatives 
     that benefit our nation's economically disadvantaged 
     communities and families. I urge prompt passage of H.R. 6062.
           Sincerely,
                                                    John C. Dugan,
                                      Comptroller of the Currency.
       Enclosure.

   Examples of Bank Investments Made Under the National Bank Public 
          Welfare Investment Authority (12 USC 24 (Eleventh))

       Birmingham Community Development Corporation (Birmingham, 
     Alabama) is a certified Community Development Financial 
     Institution that makes loans to and investments in 
     disadvantaged businesses.
       Loussac-Sogn Apartments (Anchorage, Alaska) are operated by 
     the Anchorage Neighborhood Housing Services (a member of 
     NeighborWorks America) and provide single-room occupancy 
     (SRO) housing and support services for low-income 
     individuals.
       Arizona MultiBank Community Development Corporation 
     (Phoenix, Arizona) provides financial and technical 
     assistance for affordable housing, small business 
     development, and economic development in Arizona.
       Little Rock Housing Redevelopment built Madison Heights III 
     in Little Rock, Arkansas--a 60 unit mixed income affordable 
     housing project using Low Income Housing Tax Credits. The 
     National Equity Fund, an affiliate of Local Initiatives 
     Support Corporation, syndicated the tax credits through the 
     National Equity Fund 2003.
       Bay Area Smart Growth Fund (San Francisco, California) is a 
     commercial real estate equity fund created to invest in 46 
     low- and moderate-income neighborhoods in the greater San 
     Francisco Bay Area. The fund invests in retail, commercial, 
     and industrial development as well as multi- and single-
     family housing.
       Funding Partners for Housing Solutions (Denver, Colorado) 
     is a certified Community Development Financial Institution 
     which helps to provide gap financing for affordable housing 
     development projects serving low- and moderate-income 
     individuals in Colorado.
       Community Development Trust financed the Park City 
     Residential Care Home which provides affordable assisted 
     living to 50 low- to moderate-income senior citizens. 
     Development of the facility involved the rehabilitation of an 
     historic building located on the west side of Bridgeport, 
     Connecticut.
       Delaware Community Investment Corporation (DCIC) is a 
     multibank community development corporation that provides 
     permanent financing and investment equity for affordable 
     rental housing and commercial facilities. In addition, DCIC 
     provides bridge loans and site acquisition loans for 
     enterprises that provide services to underserved communities.
       CF New Markets Advisors (Washington, DC) is a commercial 
     real estate investment fund using New Markets Tax Credits 
     that will provide debt and equity financing to support the 
     development of urban retail, office, industrial, mixed-use, 
     for-sale housing, and community facility projects.
       Black Business Investment Fund is a non-profit CDFI 
     operating in eight Florida cities that specializes in aiding 
     minority business owners in building their management 
     capacity and in accessing capital.
       Omni Community Development Corporation (Atlanta, GA) 
     acquires and rehabilitates residential properties in low- and 
     moderate-income areas.
       Hale Makana o' Waiale Apartments (Maui, Hawaii)--CRA Fund 
     Advisors purchased municipal bonds financing this rental 
     property that will serve families earning less than 50 
     percent of area median income.
       Tri-County Community Development Corporation (Beardstown, 
     Illinois) is a multi-bank community development corporation 
     that provides equity and debt financing to small businesses.
       Great Lakes Capital Fund invests in Low Income Housing Tax 
     Credit funded affordable housing projects in Indiana, 
     Michigan, and Wisconsin. Building upon its initial support 
     from the Enterprise Foundation and the Enterprise Social 
     Investment Corporation, the Capital Fund has developed a wide 
     array of technical and financial services including: 
     community and project planning, predevelopment financing, 
     construction and permanent loans, youth leadership programs, 
     and equity investments.
       Floyd County Progressive Growth Limited Partnership 
     (Charles City, Iowa) developed a commercial industrial park 
     in a state-sponsored Enterprise Zone to attract manufacturing 
     facilities to this rural community.
       Goodland Energy Center (Goodland, Kansas) consists of 
     ethanol and biodiesel refineries located in a declining 
     population area that has been plagued by drought and suffered 
     the loss of railroad service and the closing of a sugar beet 
     processing plant. These refineries will employ 65 people and 
     create an additional 35 transportation and service-related 
     jobs. The projects have the added benefit of increasing 
     demand for locally grown corn, milo, and canola.
       Houma-Terrebonne Community Development Corporation 
     (Louisiana) is a multibank CDC formed to build or 
     rehabilitate homes that will be sold to low- and moderate-
     income families.
       Coastal Ventures (Wiscasset, Maine) is a financing arm of 
     Coastal Enterprises--a CDFI that provides support in the 
     development of job-creating small businesses, natural 
     resource industries, community facilities, and affordable 
     housing.
       Lexington Terrace Townhomes (Baltimore, Maryland) were 
     built on the site of a 670-unit public housing project These 
     203 affordable rental townhomes utilize Low Income Housing 
     Tax Credits and are helping to revitalize this West Baltimore 
     community.
       Parren J. Mitchell Business Center (Baltimore, Maryland) is 
     a commercial office facility in a low-income community co-
     owned and co-developed by a neighborhood-based community 
     development corporation (CDC) and a national bank-owned CDC.
       Massachusetts Housing Investment Corporation (Boston, 
     Massachusetts) provides a broad array of debt and equity 
     financing products to nonprofit and for-profit sponsors of 
     affordable housing and commercial real estate developments 
     located in low-income communities.
       Minnesota Investment Network Corporation is a Community 
     Development Financial Institution organized as a community 
     development venture capital fund to provide equity capital 
     and expertise to companies located in Minnesota.

[[Page 20174]]

       Southeast Mississippi Community Investment Corporation is a 
     nonprofit organization dedicated to job creation, business 
     creation, and expansion and support of non-traditional 
     business loan seekers, as well as the expansion of job 
     opportunities for low- and moderate-income individuals.
       Nevada Business League Community Development Corporation 
     (Vernon County, Missouri) invested in the renovation of a 
     commercial building in an industrial park as part of a 
     government sponsored economic development initiative.
       Equity Fund of Nebraska provides equity for affordable 
     housing projects located in the State of Nebraska using the 
     Low Income Housing Tax Credit. The fund is a subsidiary of 
     the Midwest Housing Equity Group--non-profit corporation 
     which raises money to invest in affordable housing throughout 
     the states of Nebraska, Iowa, Oklahoma, and Kansas.
       Community Loan Fund of New Jersey provides financing for 
     community services and businesses, including child care, 
     health care, educational facilities, and social enterprises.
       Ammonoosuc Green Limited Partnership (Littleton, New 
     Hampshire) is an affordable housing project using Low Income 
     Housing Tax Credits. This project was sponsored by the 
     nonprofit group, Affordable Housing Education and Development 
     (a member of NeighborWorks' America) and is part 
     of this rural community's downtown revitalization initiative.
       ACCION New Mexico is a small business micro-loan program 
     which provides financing to small businesses, particularly 
     minority-owned small businesses and businesses located in 
     economically disadvantaged areas.
       Rural Housing Action Corporation built Stanton Meadows 
     Townhomes--a 24-unit affordable housing development in Seneca 
     Falls, New York. The project utilized Low Income Housing Tax 
     Credits which were syndicated by the National Equity Fund, an 
     affiliate of Local Initiatives Support Corporation.
       Community Affordable Housing Equity Corporation finances 
     the development of affordable multifamily rental housing 
     using Low-Income Housing Tax Credits in the states of North 
     Carolina, South Carolina, West Virginia, Tennessee, Kentucky, 
     Maryland, and Virginia.
       Raymond James Native American Tax Credit Fund invests in 
     Low Income Housing Tax Credit-funded affordable housing 
     projects located on or near Native American reservations, 
     sponsored by Native American tribes or their affiliates. 
     (Lapwai, Idaho (Nez Perce); Browning, Montana (Blackfeet 
     Nation); Belcourt, North Dakota (Turtle Mountain); Wagner, 
     South Dakota (Yankton-Sioux Tribe); Keshena, Wisconsin 
     (Menominee Indian Tribe of Wisconsin); Riverton, Wyoming 
     (Northern Arapaho Tribe of the Wind River Indian 
     Reservation); Bellingham, Washington (Lummi Nation); various 
     locations in Oklahoma (Cherokee Nation)).
       Longwood Plaza Shopping Center (Cleveland, Ohio) is in a 
     low-income community and was renovated by a nonprofit 
     community development corporation using New Markets Tax 
     Credits.
       Oregon Equity Fund provides equity for affordable housing 
     projects located in the State of Oregon using the Low Income 
     Housing Tax Credit.
       The Reinvestment Fund (Philadelphia, Pennsylvania) provides 
     financing primarily to community organizations for affordable 
     housing development, community facilities, and working 
     capital.
       Omni Development Corporation built Waterview Apartments--a 
     100-unit affordable housing project for senior citizens in 
     Woonsocket, Rhode Island. The project utilized Low Income 
     Housing Tax Credits which were syndicated by the National 
     Equity Fund, an affiliate of Local Initiatives Support 
     Corporation.
       The Texas Mezzanine Fund is a statewide community 
     development financial institution that provides financing for 
     businesses located in distressed areas, minority-owned 
     businesses, and small businesses that create jobs for low and 
     moderate-income people.
       Utah Microenterprise Loan Fund is a non-profit, multibank 
     community development financial institution which provides 
     financing and management support to entrepreneurs in start-up 
     and existing firms that do not have access to traditional 
     funding sources--in particular, those who are socially and 
     economically disadvantaged.
       Depot Square Revitalization (Barre, Vermont) used Historic 
     Rehabilitation Tax Credits to renovate a commercial facility 
     on the historic town square in Barre, Vermont. This 
     investment was part of a city-driven initiative to rejuvenate 
     its downtown area.

  Madam Speaker, I yield back the balance of my time.
  Ms. WATERS. Madam Speaker, I rise in support of H.R. 6062, ``the 
Community Development Enhancements Act of 2006.'' I want to thank Mr. 
Frank for sponsoring this bill, and our distinguished Chairman Mr. 
Oxley, who is an original sponsor of the bill. The bill will enhance 
the community development investments made by financial institutions.
  The bill has two major provisions. One provision would increase the 
amount of investments that a financial institution can make for 
community development from 10 percent to 15 percent. This increase in 
the amount that banks can invest in such activities will enable the 
banks to invest more of its resources in investments that will directly 
benefit communities and low and moderate income persons.
  Another provision directs portions of the investments made by the 
financial institutions to promote the public welfare. Citing the actual 
legislation, the financial institutions ``may make investments designed 
primarily to promote the public welfare, including the welfare of low 
and moderate income communities and families through housing, services 
and jobs.''
  The changes mandated by this bill send a clear message to financial 
institutions that the needs of low and moderate income communities and 
families are important. More often than not, these groups are 
overlooked or their needs underestimated. In addition, the bill enables 
our financial institutions to look at investments on an investment by 
investment basis rather than in the aggregate.
  Madam Speaker, I urge my colleagues to support H.R. 6062, because it 
will strengthen investment in low and moderate income communities 
across this Nation. Financial institutions must continue to play a role 
in strengthening and stabilizing our communities and this bill will 
facilitate both.
  Mr. McHENRY. Madam Speaker, I urge my colleagues to support this 
important piece of legislation, and I yield back the balance of my 
time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. McHenry) that the House suspend the 
rules and pass the bill, H.R. 6062.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________