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Title II — Assisting Small Businesses and Community Financial Institutions

H.R. 6321 · 116th Congress · Mar 23, 2020 · Lineage

II Assisting Small Businesses and Community Financial Institutions

201. Small Business Credit Facility

(a)
Establishment— The Board of Governors of the Federal Reserve System shall establish a credit facility to provide loans to small businesses during the COVID–19 emergency.
(b)
Definitions— In this section:
(1)
COVID–19 emergency— The term COVID–19 emergency means the period that begins upon the date of the enactment of this Act and ends on the date of the termination by the Federal Emergency Management Agency of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic.
(2)
Small business— The term small business means—
(A)
a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632));
(B)
a family farm;
(C)
an independent contractor; and
(D)
any other class of businesses to which the Board of Governors determines loans would promote full employment and price stability.

202. Small Business Financial Assistance Program

(a)
In general— The Secretary of the Treasury shall establish a Small Business Financial Assistance Program under which the Secretary shall provide loans and loan guarantees to small businesses.
(b)
Application— In making loans and loan guarantees under this section, the Secretary shall—
(1)
provide a simple application process for borrowers; and
(2)
establish clear and easy to understand underwriting standards for such loans.
(c)
Zero-Interest loans— Loans made by or guaranteed by the Secretary under this section shall be zero-interest loans, if the small business receiving such loan does not involuntarily terminate any employee of the small business during the COVID–19 emergency.
(d)
Advance—
(1)
In general— Upon request from an applicant for a loan under this section, the Secretary may provide to such applicant an advance, in cash, to such applicant.
(2)
Amount— An advance provided under paragraph (1) shall be in an amount equal to the revenue of the applicant for the period beginning January 1, 2020, and ending January 31, 2020.
(3)
Procedures—
(A)
Review— The Secretary shall have 1 week from the receipt of a request for an advance under paragraph (1) to conduct a risk assessment of the applicant to determine whether to approve or deny such request.
(B)
Approval— If the Secretary does not deny a request under subparagraph (A), the advance shall be directly deposited into the account identified by the applicant.
(C)
Remaining funds— Not later than 4 weeks after approving a request of an applicant under subparagraph (A), the Secretary shall disburse the remaining funds to such applicant.
(e)
Forgiveness— If small business that receives a loan or loan guarantee under this section demonstrates to the Secretary that the number of full-time employees of such small business on the date such small business submitted an application under this section is greater than or equal to the number of full-time employees of such small business on the date that is 1 year after the date of such submission, the Secretary shall forgive the remaining outstanding principal and interest on such loan or loan guarantee.
(f)
Funding— The Secretary shall use $50,000,000,000 from the Exchange Stabilization Fund, without further appropriation, to carry out this section.
(g)
Definitions— In this section:
(1)
COVID–19 emergency— The term COVID–19 emergency means the period that—
(A)
begins on the declaration of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic; and
(B)
ends on the termination by the Federal Emergency Management Agency of such emergency.
(2)
Small business— The term “small business” means—
(A)
a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632));
(B)
a family farm; and
(C)
an independent contractor.

203. Loan and obligation payment relief for affected small businesses and non-profits

(a)
In general—
(1)
In general— During the COVID–19 emergency, a debt collector may not, with respect to a debt of a small business or non-profit (other than debt related to a federally related mortgage loan)—
(A)
capitalize unpaid interest;
(B)
apply a higher interest rate triggered by the nonpayment of a debt to the debt balance;
(C)
charge a fee triggered by the nonpayment of a debt;
(D)
sue or threaten to sue for nonpayment of a debt;
(E)
continue litigation to collect a debt that was initiated before the date of enactment of this section;
(F)
submit or cause to be submitted a confession of judgment to any court;
(G)
enforce a security interest through repossession, limitation of use, or foreclosure;
(H)
take or threaten to take any action to enforce collection, or any adverse action for nonpayment of a debt, or for nonappearance at any hearing relating to a debt;
(I)
commence or continue any action to cause or to seek to cause the collection of a debt, including pursuant to a court order issued before the end of the 120-day period following the end of the COVID–19 emergency, from wages, Federal benefits, or other amounts due to a small business or by way of garnishment, deduction, offset, or other seizure;
(J)
cause or non-profit seek to cause the collection of a debt, including pursuant to a court order issued before the end of the 120-day period following the end of the COVID–19 emergency, by levying on funds from a bank account or seizing any other assets of a small business or non-profit;
(K)
commence or continue an action to evict a small business or non-profit from real or personal property; or
(L)
disconnect or terminate service from utility service, including electricity, natural gas, telecommunications or broadband, water, or sewer.
(2)
Rule of construction— Nothing in this subsection may be construed to prohibit a small business or non-profit from voluntarily paying, in whole or in part, a debt.
(3)
Repayment period— After the expiration of the COVID–19 emergency, with respect to a debt described under paragraph (1), a debt collector—
(A)
may not add to the debt balance any interest or fee prohibited by paragraph (1);
(B)
shall, for credit with a defined term or payment period, extend the time period to repay the debt balance by 1 payment period for each payment that a small business or non-profit missed during the COVID–19 emergency, with the payments due in the same amounts and at the same intervals as the pre-existing payment schedule;
(C)
shall, for an open end credit plan (as defined under section 103 of the Truth in Lending Act) or other credit without a defined term, allow the small business or non-profit to repay the debt balance in a manner that does not exceed the amounts permitted by formulas under section 170(c) of the Truth in Lending Act and regulations promulgated thereunder; and
(D)
shall, when the small business or non-profit notifies the debt collector, offer reasonable and affordable repayment plans, loan modifications, refinancing, options with a reasonable time in which to repay the debt.
(4)
Communications in connection with the collection of a debt—
(A)
In general— During the COVID–19 emergency, without prior consent of a small business or non-profit given directly to a debt collector during the COVID–19 emergency, or the express permission of a court of competent jurisdiction, a debt collector may only communicate in writing in connection with the collection of any debt (other than debt related to a federally related mortgage loan).
(B)
Required disclosures—
(i)
In general— All written communications described under subparagraph (A) shall inform the small business or non-profit that the communication is for informational purposes and is not an attempt to collect a debt.
(ii)
Requirements— The disclosure required under clause (i) shall be made—
(I)
in type or lettering not smaller than 14-point bold type;
(II)
separate from any other disclosure;
(III)
in a manner designed to ensure that the recipient sees the disclosure clearly;
(IV)
in English and Spanish and in any additional languages in which the debt collector communicates, including the language in which the loan was negotiated, to the extent known by the debt collector; and
(V)
may be provided by first-class mail or electronically, if the borrower has otherwise consented to electronic communication with the debt collector and has not revoked such consent.
(iii)
Oral notification— Any oral notification shall be provided in the language the debt collector otherwise uses to communicate with the borrower.
(iv)
Written translations— In providing written notifications in languages other than English in this Section, a debt collector may rely on written translations developed by the Bureau of Consumer Financial Protection.
(5)
Violations—
(A)
In general— Any person who violates this section shall be subject to civil liability in accordance with section 813 of the Fair Debt Collection Practices Act, as if the person is a debt collector for purposes of that section.
(B)
Predispute arbitration agreements— Notwithstanding any other provision of law, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a dispute brought under this section, including a dispute as to the applicability of this section, which shall be determined under Federal law.
(6)
Tolling— Except as provided in paragraph (7)(D), any applicable time limitations, including statutes of limitations, related to a debt under Federal or State law shall be tolled during the COVID–19 emergency.
(7)
Claims of affected creditors and debt collectors—
(A)
Valuation of property— With respect to any action asserting a taking under the Fifth Amendment of the Constitution of the United States as a result of this section or seeking a declaratory judgment regarding the constitutionality of this section, the value of the property alleged to have been taken without just compensation shall be evaluated—
(i)
with consideration of the likelihood of full and timely payment of the obligation without the actions taken pursuant to this section; and
(ii)
without consideration of any assistance provided directly or indirectly to the small business or non-profit from other Federal, State, and local government programs instituted or legislation enacted in response to the COVID–19 emergency.
(B)
Scope of just compensation— In an action described in subparagraph (A), any assistance or benefit provided directly or indirectly to the person from other Federal, State, and local government programs instituted in or legislation enacted response to the COVID–19 emergency, shall be deemed to be compensation for the property taken, even if such assistance or benefit is not specifically provided as compensation for property taken by this section.
(C)
Appeals— Any appeal from an action under this section shall be treated under section 158 of title 28, United States Code, as if it were an appeal in a case under title 11, United States Code.
(D)
Repose— Any action asserting a taking under the Fifth Amendment to the Constitution of the United States as a result of this section shall be brought within not later than 180 days after the end of the COVID–19 emergency.
(8)
Definitions— In this section:
(A)
COVID–19 emergency— The term COVID–19 emergency means the period that begins upon the date of the enactment of this Act and ends on the date of the termination by the Federal Emergency Management Agency of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID–19) pandemic.
(B)
Creditor— The term “creditor” means—
(i)
any person who offers or extends credit creating a debt or to whom a debt is owed or other obligation for payment;
(ii)
any lessor of real or personal property; or
(iii)
any provider of utility services.
(C)
Debt— The term “debt”—
(i)
means any obligation or alleged obligation—
(I)
for which the original agreement, or if there is no agreement, the original obligation to pay was created before or during the COVID–19 emergency, whether or not such obligation has been reduced to judgment; and
(II)
that arises out of a transaction with a small business or non-profit; and
(ii)
does not include a federally related mortgage loan.
(D)
Debt collector— The term “debt collector” means a creditor, and any person or entity that engages in the collection of debt, including the Federal Government and a State government, irrespective of whether the debt is allegedly owed to or assigned to that person or to the entity.
(E)
Federally related mortgage loan— The term federally related mortgage loan has the meaning given that term under section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).
(F)
Non-profit— The term non-profit means an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code.
(G)
Small business— The term small business has the meaning given the term small business concern under section 3 of the Small Business Act.
(b)
Credit facility for other purposes— The Board of Governors of the Federal Reserve System shall establish a facility that the Board of Governors shall use to make payments to holders of loans or obligations to compensate such holders for documented financial losses—
(1)
with respect to a loan or obligation made to an individual, small business, or non-profit; and
(2)
where such losses were caused by a suspension of payments required under Federal law in connection with the COVID–19 emergency.

204. Reauthorization of the State Small Business Credit Initiative Act of 2010

The State Small Business Credit Initiative Act of 2010 (15 U.S.C. 5701 et seq.) is amended—
(1)
by striking “2009 allocation” each place such term appears and inserting “2019 allocation”;
(2)
by striking “2010 allocation” each place such term appears and inserting “2020 allocation”;
(3)
by striking “date of enactment of this Act” each place it appears and inserting “date of the enactment of the Small Business Support and Access to Capital Act of 2020”;
(4)
by striking “date of the enactment of this Act” each place it appears and inserting “date of the enactment of the Small Business Support and Access to Capital Act of 2020”;
(5)
in section 3003(b)(2)—
(A)
in the section heading, by striking “2009 allocation formula” and inserting striking “2019 allocation formula”;
(B)
by striking “2008 State employment decline” each place such term appears and inserting “2018 State employment decline”;
(C)
in subparagraph (A), by striking “2009 allocation” and inserting “2019 allocation”; and
(D)
in subparagraph (C)—
(i)
in the subparagraph heading, by striking “2008 State employment decline defined” and inserting “2018 State employment decline defined”;
(ii)
in clause (i), by striking “December 2007” and inserting “December 2017”; and
(iii)
in clause (ii), by striking “December 2008” and inserting “December 2018”;
(6)
in section 3003(b)(3)—
(A)
in the section heading, by striking “2010 allocation formula” and inserting striking “2020 allocation formula”;
(B)
by striking “2009 unemployment number” each place such term appears and inserting “2019 unemployment number”; and
(C)
in subparagraph (C)—
(i)
in the subparagraph heading, by striking “2009 unemployment number defined” and inserting “2019 unemployment number defined”; and
(ii)
by striking “December 2009” and inserting “December 2019”;
(7)
in section 3005(e), by striking “to the Secretary a report” and inserting “to the Secretary and Congress a report”;
(8)
in section 3007—
(A)
in subsection (a)(1), by striking “to the Secretary a report ” and inserting “to the Secretary and Congress a report”; and
(B)
in subsection (b)—
(i)
by striking “March 31, 2011” and inserting “March 31, 2021”; and
(ii)
by striking “to the Secretary” and inserting “to the Secretary and Congress”; and
(9)
in section 3009—
(A)
in subsection (b), by striking “$1,500,000,000” and inserting “$10,000,000,000”; and
(B)
in subsection (c), by adding at the end the following new sentence: “At the end of such period, any amounts that remain unexpended or unobligated shall be transferred to the Community Development Financial Institutions Fund established under section 104(a) of the Riegle Community Development and Regulatory Improvement Act of 1994.”.

205. Funding of the Initiative to Build Growth Equity Funds for Minority Businesses

(a)
Grant— The Minority Business Development Agency shall provide a grant of $3,000,000,000 to fully implement the Initiative to Build Growth Equity Funds for Minority Businesses (the “Initiative”; award number MB19OBD8020113), including to use such amounts as capital for the Equity Funds.
(b)
Administrative expenses— Of the amounts provided under subsection (a), the grant recipient may use not more than 2.25 percent of such amount for administrative expenses, of which—
(1)
not more than 1.5 percent per annum may be used for fees to be paid to investment managers for fund investment activities, including deal sourcing, due diligence, investment monitoring, and investment reporting; and
(2)
not more than 0.75 percent per annum may be used for fund administration activities by the grant recipient, including fund manager evaluation, selection, monitoring, and overall fund program management.
(c)
Treatment of interest— Notwithstanding any other provision of law, with the approval of the Minority Business Development Agency, grant funds made available under subsection (a) may be deposited in interest-bearing accounts pending disbursement, and any interest which accrues may be retained without returning such interest to the Treasury of the United States and interest earned may be obligated and expended for the purposes for which the grant was made available without further appropriation.
(d)
Reporting and audit requirements—
(1)
Reporting by recipient— The grant recipient under this section shall issue a report to the Minority Business Development Agency every 6 months detailing the use of grant funds received under this section and any other information that the Minority Business Development Agency may require.
(2)
Annual report to Congress— The Minority Business Development Agency shall issue an annual report to the Congress containing the information received under paragraph (1) and an analysis of the implementation of the Initiative.
(3)
GAO audit— The Comptroller General of the United States shall, every 2 years, carry out an audit of the Initiative and issue a report to the Congress and the Minority Business Development Agency containing the results of such audit.
(4)
Fund managers— Fund managers shall annually report on their fund management activities, including—
(A)
fund performance;
(B)
impacts of capital investments by industry and geography;
(C)
racial, ethnic, and gender demographics of minority businesses receiving capital from the Initiative; and
(D)
any other ancillary and economic benefits of capital investments from the Initiative.
(e)
Funding— There is authorized to be appropriated to the Minority Business Development Agency $3,000,000,000 to make the grant described under subsection (a).

206. Community Development Financial Institutions Fund supplemental appropriation authorization

There is authorized to be appropriated $1,000,000,000 for fiscal year 2020, for providing financial assistance and technical assistance under subparagraphs (A) and (B) of section 108(a)(1) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4707(a)(1)), except that subsections (d) and (e) of such section 108 shall not apply to the provision of such assistance.

207. Minority depository institution

(a)
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 non-profit 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, 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, as included in the version of the “Financial Services and General Government Appropriations Act, 2020” (H.R. 3351) that passed the House of Representatives on June 26, 2019.
(b)
Definitions— In this section:
(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.
(c)
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:

“(A) any”

(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.”

(d)
Establishment of impact bank designation—
(1)
In general— Each appropriate 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 50 percent or more of the loans extended by such covered bank are extended to low-income borrowers.
(2)
Designation— Based on data obtained through examinations, an appropriate Federal banking agency shall submit a notification to a depository institution stating that the depository institution qualifies for designation as an impact bank.
(3)
Application— A depository institution that does not receive a notification described in paragraph (2) may submit an application to the appropriate Federal banking agency demonstrating that the depository institution qualifies for designation as an impact bank.
(4)
Additional data or oversight— A depository institution is not required to submit additional data to an appropriate Federal banking agency or be subject to additional oversight from such an agency if such data or oversight is related specifically and solely for consideration for a designation as an impact bank.
(5)
Removal of designation— If an 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.
(6)
Reconsideration of designation; appeals— A depository institution may—
(A)
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
(B)
file an appeal in accordance with procedures established by the appropriate Federal banking agency.
(7)
Rulemaking— Not later than 1 year after the date of the enactment of this Act, the appropriate Federal banking agencies shall jointly issue rules to carry out the requirements of this subsection, including by providing a definition of a low-income borrower.
(8)
Federal Deposit Insurance Act definitions— In this subsection, the terms depository institution and appropriate Federal banking agency have the meanings given such terms, respectively, in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(e)
Minority Depository Institutions Advisory Committees—
(1)
Establishment— Each covered regulator shall establish an advisory committee to be called the “Minority Depository Institutions Advisory Committee”.
(2)
Duties— Each Minority Depository Institutions 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 Depository Institutions 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 minority depository institutions.
(3)
Membership—
(A)
In general— Each Minority Depository Institutions Advisory Committee shall consist of no more than 10 members, who—
(i)
shall serve for one two-year term;
(ii)
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
(iii)
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.
(B)
Diversity— To the extent practicable, each covered regulator shall ensure that the members of Minority Depository Institutions Advisory Committee of such agency reflect the diversity of depository institutions.
(4)
Meetings—
(A)
In general— Each Minority Depository Institutions Advisory Committee shall meet not less frequently than twice each year.
(B)
Invitations— Each Minority Depository Institutions Advisory Committee shall invite the attendance at each meeting of the Minority Depository Institutions 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.
(5)
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 Depository Institutions Advisory Committee established pursuant to this subsection.
(6)
Definitions— In this subsection:
(A)
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.
(B)
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)) or a minority credit union (as defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended by this Act).
(C)
Depository institution— The term depository institution has the meaning given under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(D)
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).
(7)
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)).”

(f)
Federal deposits in minority depository institutions—
(1)
In general— Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended—
(A)
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 fully collateralized or fully 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).”

(B)
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 an appropriate Federal banking agency pursuant to section 5 of the Ensuring Diversity in Community Banking Act of 2020.”

(2)
Technical amendments— Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended—
(A)
in the matter preceding paragraph (1), by striking “section—” and inserting “section:”; and
(B)
in the paragraph heading for paragraph (1), by striking “financial” and inserting “depository”.
(g)
Minority Bank Deposit Program—
(1)
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:

“1204. Expansion of use of minority banks and minority credit unions

“(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 banks and minority credit unions.

“(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 bank or minority credit union;

“(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 bank or minority credit union 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 ensure, to the maximum extent possible as permitted by law, the use of minority banks and minority credit unions to serve the financial needs 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 banks and minority credit unions to serve the financial needs 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 the term insured depository institution in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).

“(3) Minority—The term minority means any Black American, Native American, Hispanic American, or Asian American.

“(4) Minority bank—The term minority bank means a minority depository institution as defined in section 308 of this Act.

“(5) Minority credit union—The term minority credit union means any credit union for which more than 50 percent of the membership (including board members) of such credit union are minority individuals, as determined by the National Credit Union Administration pursuant to section 308 of this Act.”

(2)
Conforming Amendments— The following provisions are amended by striking “1204(c)(3)” and inserting “1204(c)”:
(A)
Section 808(b)(3) of the Community Reinvestment Act of 1977 (12 U.S.C. 2907(b)(3)).
(B)
Section 40(g)(1)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1831q(g)(1)(B)).
(C)
Section 704B(h)(4) of the Equal Credit Opportunity Act (15 U.S.C. 1691c–2(h)(4)).
(h)
Diversity report and best practices—
(1)
Annual report— Each covered regulator shall submit to Congress an annual report on diversity including the following:
(A)
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.
(B)
The status of any examiners of covered regulators, based on voluntary self-identification, as a veteran.
(C)
Whether any covered regulator, as of the date on which the report required under this subsection is submitted, has adopted a policy, plan, or strategy to promote racial, ethnic, and gender diversity among examiners of the covered regulator.
(D)
Whether any special training is developed and provided for examiners related specifically to working with banks that serve communities that are predominantly minorities, low income, or rural, and the key focus of such training.
(2)
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—
(A)
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
(B)
for retaining and providing fair consideration for promotions within the examiner staff for purposes of achieving diversity among examiners.
(3)
Covered regulator defined— In this subsection, 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.
(i)
Investments in minority depository institutions and impact banks—
(1)
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 of 2020) 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 of more of any class of voting securities of such an impact bank or a minority depository institution.”

(2)
Rulemaking— The appropriate Federal banking agency (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.
(3)
Report— Not later than 1 year after the date of the enactment of this Act, the appropriate Federal banking agencies shall jointly submit to Congress a report on—
(A)
the principal causes for the low number of de novo minority depository institutions during the 10-year period preceding the date of the report;
(B)
the main challenges to the creation of de novo minority depository institutions and de novo impact banks; and
(C)
regulatory and legislative considerations to promote the establishment of de novo minority depository institutions and de novo impact banks.
(j)
Requirement To mentor minority depository institutions or community development financial institutions To serve as a depositary or financial agent—
(1)
In general— Before a large financial institution may be employed as a financial agent of the Department of the Treasury or perform any reasonable duties as depositary of public moneys of the Department of the Treasury, the large financial institution shall demonstrate participation as a mentor in a covered mentor-protege program to a protege firm that is a minority depository institution or a community development financial institution.
(2)
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 an analysis of outcomes of such program.
(3)
Procedures— The Secretary of the Treasury shall publish procedures for compliance with the requirements of this subsection for large financial institutions.
(4)
Definitions— In this subsection:
(A)
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).
(B)
Large financial institution— The term large financial institution means any entity—
(i)
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
(ii)
that has total consolidated assets greater than or equal to $50,000,000,000.
(k)
Custodial deposit program for covered minority depository institutions and impact banks—
(1)
Establishment— The Secretary of the Treasury shall establish a custodial deposit program (in this subsection referred to as the “Program”) under which a covered bank shall receive monthly deposits from a qualifying account.
(2)
Application— A covered bank shall submit to the Secretary an application to participate in the Program at such time, in such manner, and containing such information as the Secretary may determine.
(3)
Program operations—
(A)
Designation of custodial entities— The Secretary shall designate eligible custodial entities to make monthly deposits with covered banks selected for participation in the Program on behalf of a qualifying account.
(B)
Custodial accounts—
(i)
In general— The Secretary shall establish a custodial deposit account for each qualifying account with the eligible custodial entity designated to make deposits with covered banks for each such qualifying account.
(ii)
Amount— The Secretary shall deposit a total amount not greater than 5 percent of a qualifying account into any custodial deposit accounts established under subparagraph (A).
(iii)
Deposits with Program participants—
(I)
Monthly deposits— Each month, each eligible custodial entity designated by the Secretary shall deposit an amount not greater than the insured amount, in the aggregate, from each custodial deposit account, in a single covered bank.
(II)
Limitation— With respect to the funds of an individual qualifying account, the eligible custodial entity may not deposit an amount greater than the insured amount in a single covered bank.
(III)
Insured amount defined— In this clause, the term insured amount means the amount that is the greater of—
(aa)
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
(bb)
such higher amount negotiated between the Secretary and the Corporation under which the Corporation will insure all deposits of such higher amount.
(iv)
Limitations— The total amount of funds deposited under the Program in a covered bank may not exceed the lesser of—
(I)
10 percent of the average amount of deposits held by such covered bank in the previous quarter; or
(II)
$100,000,000.
(C)
Interest—
(i)
In general— Each eligible custodial entity designated by the Secretary shall—
(I)
collect interest from each covered bank in which such custodial entity deposits funds pursuant to subparagraph (B); and
(II)
disburse such interest to the Secretary each month.
(ii)
Interest rate— The rate of any interest collected under this subparagraph may not exceed 50 percent of the discount window primary credit interest rate most recently published on the Federal Reserve Statistical Release on selected interest rates (daily or weekly), commonly referred to as the H.15 release (commonly known as the “Federal funds rate”).
(D)
Statements— Each eligible custodial entity designated by the Secretary shall submit to the Secretary monthly statements that include the total amount of funds deposited with, and interest rate received from, each covered bank by the eligible custodial entity on behalf of qualifying entities.
(E)
Records— The Secretary shall issue a quarterly report to Congress and make publicly available a record identifying all covered banks participating in the Program and amounts deposited under the Program in covered banks.
(4)
Requirements relating to deposits— Deposits made with covered banks under this subsection may not—
(A)
be considered by the Corporation to be funds obtained, directly or indirectly, by or through any deposit broker for deposit into 1 or more deposit accounts (as described under section 29 of the Federal Deposit Insurance Act (12 U.S.C. 1831f)); or
(B)
be subject to insurance fees from the Corporation that are greater than insurance fees for typical demand deposits not obtained, directly or indirectly, by or through any deposit broker (commonly known as “core deposits”).
(5)
Modifications—
(A)
In general— The Secretary shall provide a 3-month period for public notice and comment before making any material change to the operation of the Program.
(B)
Exception— The requirements of subparagraph (A) shall not apply if the Secretary makes a material change to the Program to comply with safety and soundness standards or other law.
(6)
Termination—
(A)
By covered bank— A covered bank selected for participation in the Program pursuant to paragraph (3) may terminate participation in the Program by providing the Secretary a notification 60 days prior to termination.
(B)
By Secretary— The Secretary may terminate the participation of a covered bank in the Program if the Secretary determines the covered bank—
(i)
violated any terms of participation in the Program;
(ii)
failed to comply with Federal bank secrecy laws, as documented in writing by the primary regulator of the covered bank;
(iii)
failed to remain well capitalized; or
(iv)
failed comply with safety and soundness standards, as documented in writing by the primary regulator of the covered bank.
(7)
Definitions— In this subsection:
(A)
Corporation— The term Corporation means the Federal Deposit Insurance Corporation.
(B)
Covered bank— The term covered bank means—
(i)
a minority depository institution that is regulated by the Corporation or the National Credit Union Administration that is well capitalized (as defined in section 38(b) of the Federal Deposit Insurance Act (12 U.S.C. 1831o(b))); or
(ii)
a depository institution designated pursuant to section 5 of the Ensuring Diversity in Community Banking Act of 2020 that is well capitalized (as defined in section 38(b) of the Federal Deposit Insurance Act (12 U.S.C. 1831o(b))).
(C)
Eligible custodial entity— The term eligible custodial entity means—
(i)
an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813));
(ii)
an insured credit union (as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752)); or
(iii)
or a well capitalized State-chartered trust company,
(D)
Federal bank secrecy laws— The term Federal bank secrecy laws means—
(i)
section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
(ii)
section 123 of Public Law 91–508; and
(iii)
subchapter II of chapter 53 of title 31, United States Code.
(E)
Qualifying account— The term qualifying account means any account established in the Department of the Treasury that—
(i)
is controlled by the Secretary; and
(ii)
is expected to maintain a balance greater than $200,000,000 for the following calendar month.
(F)
Secretary— The term Secretary means the Secretary of the Treasury.
(G)
Well capitalized— The term well capitalized has the meaning given in section 38 of the Federal Deposit Insurance Act (12 U.S.C. 1831o).
(l)
Streamlined community development financial institution applications and reporting—
(1)
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—
(A)
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
(B)
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 that serves low- and moderate-income neighborhoods (as defined under the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.)).
(2)
Report on implementation— 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 paragraph (1).
(3)
Annual report—
(A)
In general— Section 17(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1827(a)(1)) is amended—
(i)
in subparagraph (E), by striking “and” at the end;
(ii)
by redesignating subparagraph (F) as subparagraph (G); and
(iii)
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 of 2020); and”

(B)
Application— The amendment made by this paragraph 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.
(m)
Task force on lending to small business concerns—
(1)
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 bank (as designated pursuant to section 5 of the Ensuring Diversity in Community Banking Act of 2020) 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)).
(2)
Report to Congress— Not later than 18 months after the establishment of the task force described in paragraph (1), the Administrator of the Small Business Administration shall submit to Congress a report on the findings of such task force.
(n)
Assistance to minority depository institutions and impact banks— The Secretary of the Treasury shall establish a program to provide assistance to a minority depository institution or an impact bank (as designated pursuant to section 5 of the Ensuring Diversity in Community Banking Act of 2020) to support growth and development of such minority depository institutions and impact banks, including by providing assistance with obtaining or converting a charter, bylaw amendments, field-of-membership expansion requests, and online training and resources.

208. Loans to MDIs and CDFIs

(a)
In general— During the COVID–19 emergency period, the Board of Governors of the Federal Reserve System shall provide zero-interest loans to minority depository institutions and community development financial institutions to help mitigate the economic impact of COVID–19 in low-income, underserved communities.
(b)
Asset limitation— Subsection (a) shall only apply to minority depository institutions and community development financial institutions with less than $1,000,000,000 in assets.
(c)
Interest To resume 18 months after pandemic— Notwithstanding subsection (a), the Board of Governors shall charge interest on loans made pursuant to subsection (a) after the end of the 18-month period beginning at the end of the COVID–19 emergency period, at a rate to be determined by the Board of Governors based on the interest amount charged under the discount window lending programs.
(d)
COVID–19 pandemic defined— In this section, the term “COVID–19 emergency period” means the period that begins upon the date of the enactment of this Act and ends upon the date of the termination by the Federal Emergency Management Administration of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID-19) pandemic.

209. Insurance of transaction accounts

(a)
Banks and savings associations—
(1)
Amendments— Section 11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is amended—
(A)
in subparagraph (B)—
(i)
by striking “The net amount” and inserting the following:

“(i) In general—Subject to clause (ii), the net amount”

(ii)
by adding at the end the following new clauses:

“(ii) Authorization for insurance for transaction accounts—Notwithstanding clause (i), the Corporation may fully insure the net amount that any depositor at an insured depository institution maintains in a transaction account. Such amount shall not be taken into account when computing the net amount due to such depositor under clause (i).

“(iii) Transaction account defined—For purposes of this subparagraph, the term “transaction account” has the meaning given that term under section 19 of the Federal Reserve Act (12 U.S.C. 461).”

(B)
in subparagraph (C), by striking “subparagraph (B)” and inserting “subparagraph (B)(i)”.
(2)
Prospective repeal— Effective January 1, 2022, section 11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), as amended by paragraph (1), is amended—
(A)
in subparagraph (B)—
(i)
by striking “deposit.—” and all that follows through “clause (ii), the net amount” and insert “deposit.—The net amount”; and
(ii)
by striking clauses (ii) and (iii); and
(B)
in subparagraph (C), by striking “subparagraph (B)(i)” and inserting “subparagraph (B)”.
(b)
Credit unions—
(1)
Amendments— Section 207(k)(1) of the Federal Credit Union Act (12 U.S.C. 1787(k)(1)) is amended—
(A)
in subparagraph (A)—
(i)
by striking “Subject to the provisions of paragraph (2), the net amount” and inserting the following:

“(i) Net amount of insurance payable—Subject to clause (ii) and the provisions of paragraph (2), the net amount”

(ii)
by adding at the end the following new clauses:

“(ii) Authorization for insurance for transaction accounts—Notwithstanding clause (i), the Board may fully insure the net amount that any member or depositor at an insured credit union maintains in a transaction account. Such amount shall not be taken into account when computing the net amount due to such member or depositor under clause (i).

“(iii) Transaction account defined—For purposes of this subparagraph, the term “transaction account” has the meaning given that term under section 19 of the Federal Reserve Act (12 U.S.C. 461).”

(B)
in subparagraph (B), by striking “subparagraph (A)” and inserting “subparagraph (A)(i)”.
(2)
Prospective repeal— Effective January 1, 2022, section 207(k)(1) of the Federal Credit Union Act (12 U.S.C. 1787(k)(1)), as amended by paragraph (1), is amended—
(A)
in subparagraph (A)—
(i)
by striking “(i) Net amount of insurance payable.—” and all that follows through “paragraph (2), the net amount” and inserting “Subject to the provisions of paragraph (2), the net amount”; and
(ii)
by striking clauses (ii) and (iii); and
(B)
in subparagraph (B), by striking “subparagraph (A)(i)” and inserting “subparagraph (A)”.
(c)
COVID–19 emergency defined— In this section, the term “COVID–19 emergency” means the period that begins upon the date of the enactment of this Act and ends upon the date of the termination by the Federal Emergency Management Agency of the emergency declared on March 13, 2020, by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 4121 et seq.) relating to the Coronavirus Disease 2019 (COVID-19) pandemic.