Section 1 Short title
This Act may be cited as the “Promoting and Advancing Communities of Color Through Inclusive Lending Act”.
Promoting and Advancing Communities of Color Through Inclusive Lending Act
A BILL
To make reforms to provide support for minority depository institutions, community development financial institutions, and minority lending institutions to promote and advance communities of color through inclusive lending, and for other purposes.
Sec. 2 Strengthening diverse and mission-driven community financial institutions
Minority lending institution set-Aside in providing assistance—
In general— Section 108 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4707) is amended by adding at the end the following:
“(i) Minority lending institution set-Aside in providing assistance—Notwithstanding any other provision of law, in providing any assistance to community development financial institutions, the Fund shall reserve 40 percent of such assistance for minority lending institutions.”
Definitions— Section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702) is amended by adding at the end the following:
“(22) Minority lending institution—The term “minority lending institution” has the meaning given that term under section 523(c) of division N of the Consolidated Appropriations Act, 2021.”
Office of Minority Lending Institutions— Section 104 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703) is amended by adding at the end the following:
“(l) CDFI Office of Minority Lending Institutions—There is established within the Fund an Office of Minority Lending Institutions, which shall oversee assistance provided by the Fund to minority lending institutions.”
Reporting on minority lending institutions— Section 117 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4716) is amended by adding at the end the following:
“(g) Reporting on minority lending institutions—Each report required under subsection (a) shall include a description of the extent to which assistance from the Fund are provided to minority lending institutions.”
Submission of data relating to diversity by community development financial institutions— Section 104 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703), as amended by subsection (b), is further amended by adding at the end the following:
“(m) Submission of data relating to diversity
“(1) Definitions—In this subsection—
“(A) the term executive officer has the meaning given the term in section 230.501(f) of title 17, Code of Federal Regulations, as in effect on the date of enactment of this subsection; and
“(B) the term veteran has the meaning given the term in section 101 of title 38, United States Code.
“(2) Submission of disclosure—Each Fund applicant and recipient shall provide the following:
“(A) Data, based on voluntary self-identification, on the racial, ethnic, and gender composition of—
“(i) the board of directors of the institution;
“(ii) nominees for the board of directors of the institution; and
“(iii) the executive officers of the institution.
“(B) The status of any member of the board of directors of the institution, any nominee for the board of directors of the institution, or any executive officer of the institution, based on voluntary self-identification, as a veteran.
“(C) Whether the board of directors of the institution, or any committee of that board of directors, has, as of the date on which the institution makes a disclosure under this paragraph, adopted any policy, plan, or strategy to promote racial, ethnic, and gender diversity among—
“(i) the board of directors of the institution;
“(ii) nominees for the board of directors of the institution; or
“(iii) the executive officers of the institution.
“(3) Annual report—Not later than 18 months after the date of enactment of this subsection, and annually thereafter, the Fund shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and make publicly available on the website of the Fund, a report—
“(A) on the data and trends of the diversity information made available pursuant to paragraph (2); and
“(B) containing all administrative or legislative recommendations of the Fund to enhance the implementation of this title or to promote diversity and inclusion within community development financial institutions.”
Office of Diverse and Mission-Driven Community Financial Institutions—
Establishment— There is established within the Department of the Treasury the Office of Diverse and Mission-Driven Community Financial Institutions.
Leadership— The Office of Diverse and Mission-Driven Community Financial Institutions shall be led by a Deputy Assistant Secretary for Diverse and Mission-Driven Community Financial Institutions, who shall be appointed by the Secretary of the Treasury, in consultation with the Department of the Treasury’s Director of Office of Minority and Women Inclusion.
Functions— The Office of Diverse and Mission-Driven Community Financial Institutions, pursuant to the direction of the Secretary, shall have the authority—
to monitor and issue reports regarding—
community development financial institutions, minority depository institutions, and minority lending institutions; and
the role such institutions play in the financial system of the United States, including the impact they have on providing financial access to low- and moderate-income communities, communities of color, and other underserved communities;
to serve as a resource and Federal liaison for current and prospective community development financial institutions, minority depository institutions, and minority lending institutions engaging with the Department of the Treasury, the Community Development Financial Institutions Fund (“CDFI Fund”), other Federal Government agencies, including by providing contact information, resources, technical assistance, and other support for entities wishing—
to become certified as a community development financial institution, and maintain the certification;
to obtain a banking charter, deposit insurance, or otherwise carry on banking activities in a safe, sound, and responsible manner;
to obtain financial support through private sector deposits, investments, partnerships, and other means;
to expand their operations through internal growth and acquisitions;
to develop and upgrade their technology, cybersecurity resilience, compliance systems, data reporting systems, and their capacity to support their communities, including through partnerships with third-party companies;
to obtain grants, awards, investments and other financial support made available through the CDFI Fund, the Board of Governors of the Federal Reserve System, the Central Liquidity Facility, the Federal Home Loan Banks, and other Federal programs;
to participate as a financial intermediary with respect to various Federal and State programs and agencies, including the State Small Business Credit Initiative and programs of the Small Business Administration; and
to participate in Financial Agent Mentor-Protégé Program of the Department of the Treasury and other Federal programs designed to support private sector partnerships;
to provide resources to the public wishing to learn more about minority depository institutions, community development financial institutions, and minority lending institutions, including helping the Secretary implement the requirements under section 5, publishing reports issued by the Office on the website of the Department of the Treasury and providing hyperlinks to other relevant reports and materials from other Federal agencies;
to provide policy recommendations to the Secretary, the CDFI Fund, other relevant Federal agencies, and Congress on ways to further strengthen Federal support for community development financial institutions, minority depository institutions, and minority lending institutions;
to assist the Secretary in carrying out the Secretary’s responsibilities under section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) to preserve and promote minority depository institutions in consultation with the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, and the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation; and
to carry out other duties of the Secretary of the Treasury required by this Act and the amendments made by this Act, and to perform such other related duties and authorities as may be assigned by the Secretary.
Strengthening Federal efforts and interagency coordination To promote diverse and mission-Driven community financial institutions—
Senior officials designated— The Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation, and the Director of the Bureau of Consumer Financial Protection shall each, in consultation with their respective Director of Office of Minority and Women Inclusion, designate a senior official to be their respective agency’s officer responsible for promoting minority depository institutions, community development financial institutions, and minority lending institutions, including to fulfill obligations under section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) to preserve and promote minority depository institutions.
Interagency Working Group— The Deputy Assistant Secretary for Diverse and Mission-Driven Community Financial Institutions shall regularly convene meetings, no less than once a quarter, of an interagency working group to be known as the “Interagency Working Group to Promote Diverse and Mission-Driven Community Financial Institutions”, which shall consist of the senior officials designated by their respective agencies under paragraph (1), along with the Director of the Community Development Financial Institutions Fund and such other government officials as the Deputy Assistant Secretary may choose to invite, to examine and discuss the state of minority depository institutions, community development financial institutions, and minority lending institutions, and actions the relevant agencies can take to preserve, promote, and strengthen these institutions.
Annual report to Congress— Not later than 1 year after the date of the enactment of this subsection, and annually thereafter, the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation, and the Director of the Bureau of Consumer Financial Protection shall submit a joint report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate regarding the work that has been done the prior year to preserve, promote, and strengthen community development financial institutions, minority depository institutions, and minority lending institutions, along with any policy recommendations on actions various government agencies and Congress should take to preserve, promote, and strengthen community development financial institutions, minority depository institutions, and minority lending institutions.
Sec. 3 Capital investments, grants, and technology support for MDIs and CDFIs
Authorization of appropriation— There is authorized to be appropriated to the Emergency Capital Investment Fund $4,000,000,000.
Conforming amendments To allow for additional purchases of capital— Section 104A of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703a) is amended—
in subsection (c), by striking paragraph (2); and
in subsection (e), by striking paragraph (2).
Use of funds for CDFI financial and technical assistance— Section 104A of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703a) is amended by adding at the end the following:
“(p) Use of funds for CDFI financial and technical assistance—The Secretary may transfer amounts in the Emergency Capital Investment Fund to the Fund for the purpose of providing financial and technical assistance grants to community development financial institutions certified by the Secretary.”
Technology grants for MDIs and CDFIs— Section 104A of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703a), as amended by subsection (c), is further amended by adding at the end the following:
“(q) Technology grants for MDIs and CDFIs
“(1) Study and report on certain technology challenges
“(A) Study—The Secretary shall carry out a study on the technology challenges impacting minority depository institutions and community development financial institutions with respect to—
“(i) internal technology capabilities and capacity of the institutions to process loan applications and otherwise serve current and potential customers through the internet, mobile phone applications, and other tools;
“(ii) technology capabilities and capacity of the institutions, provided in partnership with third-party companies, to process loan applications and otherwise serve current and potential customers through the internet, mobile phone applications, and other tools;
“(iii) cybersecurity; and
“(iv) challenges and solutions related to algorithmic bias in the deployment of technology.
“(B) Report—Not later than 1 year after the date of the enactment of this subsection, the Secretary shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate that includes the results of the study required under subparagraph (A).
“(2) Technology grant program
“(A) Program authorized—The Secretary shall carry out a technology grant program to make grants to minority depository institutions and community development financial institutions to address technology challenges impacting such institutions.
“(B) Application—To be eligible to be awarded a grant under this paragraph, a minority depository institution or community development financial institution shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.
“(C) Use of funds—A minority depository institution or community development financial institution that is awarded a grant under this paragraph may use the grant funds to—
“(i) enhance or adopt technologies that—
“(I) shorten loan approval processes;
“(II) improve customer experience;
“(III) provide additional services to customers;
“(IV) facilitate compliance with applicable laws, regulations, and program requirements, including testing to ensure that the use of technology does not result in discrimination, and helping to satisfy data reporting requirements; and
“(V) help ensure privacy of customer records and cybersecurity resilience; or
“(ii) carry out such other activities as the Secretary determines appropriate.
“(3) Funding—The Secretary may use amounts in the Emergency Capital Investment Fund to make grants under paragraph (2), but not to exceed $250,000,000 in the aggregate.”
Pilot program for establishing de novo CDFIs and MDIs— Section 104A of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703a), as amended by subsections (c) and (d), is further amended by adding at the end the following:
“(r) Pilot program for establishing de novo CDFIs and MDIs
“(1) In general—The Secretary of the Treasury, in consultation with the Fund and the appropriate Federal banking agencies, shall establish a pilot program to provide competitive grants to a person for the purpose of providing capital for such person to establish a minority depository institution or a community development financial institution.
“(2) Application—A person desiring a grant under this subsection shall submit to the Secretary an application in such form and containing such information as the Secretary determines appropriate.
“(3) Disbursement—Before disbursing grant amounts to a person selected to receive a grant under this subsection, the Secretary shall ensure that such person has received approval from the appropriate Federal banking agency (or such other Federal or State agency from whom approval is required) to establish a minority depository institution or a community development financial institution, as applicable.
“(4) Funding—The Secretary may use amounts in the Emergency Capital Investment Fund to make grants under paragraph (2), but not to exceed $100,000,000 in the aggregate.”
Guidance for subchapter S and mutual banks— Not later than 30 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System and the Secretary shall issue guidance regarding how Emergency Capital Investment Program investments (whether made before or after the date of enactment of this Act) are considered for purposes of various prudential requirements, including debt to equity, leverage ratio, and double leverage ratio requirements with respect to subchapter S and mutual bank recipients of such investments.
Sec. 4 Supporting Young Entrepreneurs Program
Section 108 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4707), as amended by section 2(a)(1), is further amended by adding at the end the following:
“(j) Supporting Young Entrepreneurs Program
“(1) In general—The Fund shall establish a Supporting Young Entrepreneurs Program under which the Fund may provide financial awards to the community development financial institutions that the Fund determines have the best programs to help young entrepreneurs get the start up capital needed to start a small business.
“(2) No matching requirement—The matching requirement under subsection (e) shall not apply to awards made under this subsection.
“(3) Funding—In carrying out this subsection, the Fund may use—
“(A) amounts in the Emergency Capital Investment Fund, but not to exceed $100,000,000 in the aggregate; and
“(B) such other funds as may be appropriated by Congress to the Fund to carry out the Supporting Young Entrepreneurs Program.”
Sec. 5 Map of minority depository institutions and community development financial institutions
In general— The Secretary of the Treasury, in consultation with the CDFI Fund and the Federal banking agencies, shall establish an interactive, searchable map showing the geographic locations of the headquarters and branch locations of minority depository institutions and community development financial institutions that have been certified by the Secretary. Such map shall also provide a link to the website of each such minority depository institution and community development financial institution.
Definitions— In this section:
CDFI Fund— The term “CDFI Fund” means the Community Development Financial Institutions Fund established under section 104(a) of the Riegle Community Development and Regulatory Improvement Act of 1994.
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.
Federal banking agency— The term “Federal banking agency”—
has the meaning given in section 3 of the Federal Deposit Insurance Act; and
means the National Credit Union Administration.
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.
Sec. 6 Report on certified community development financial institutions
Section 117(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4716(a)) is amended—
by striking “The Fund” and inserting the following:
“(1) In general—The Fund”
by striking “and the Congress” and inserting “, the Congress, and the public”; and
by adding at the end the following:
“(2) Report on certified community development financial institutions—The annual report required under paragraph (1) shall include a report on community development financial institutions (“CDFIs”) that have been certified by the Secretary of the Treasury, including a summary with aggregate data and analysis, to the fullest extent practicable, regarding—
“(A) a list of the types of organizations that are certified as CDFIs, and the number of each type of organization;
“(B) the geographic location and capacity of different types of certified CDFIs;
“(C) the primary lines of business for different types of certified CDFIs, as well as any secondary lines of business;
“(D) human resources and staffing information for different types of certified CDFIs, including—
“(E) the types of development services provided by different types of certified CDFIs;
“(F) the target markets of different types of certified CDFIs and the amount of products and services offered by CDFIs to those target markets, including—
“(i) the number and amount of loans and loan guarantees made in those target markets;
“(ii) the number and amount of other investments made in those target markets; and
“(iii) the number and amount of development services offered in those target markets; and
“(G) such other information as the Director of the Fund may determine necessary to promote transparency of the impact of different types of CDFIs, while carrying out this report in a manner that seeks to minimize data reporting requirements from certified CDFIs when feasible, including utilizing information gathered from other regulators under section 104(l).”
Sec. 7 Consultation and minimization of data requests
Section 104 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703) is amended by adding at the end the following:
“(l) Consultation and minimization of data requests
“(1) In general—In carrying out its duties, the Fund shall—
“(A) periodically, and no less frequent than once a year, consult with the applicable Federal regulator of certified CDFIs and applicants to be a certified CDFI (“applicants)”; and
“(B) seek to gather any relevant information on certified CDFIs and applicants from the applicable Federal regulator to minimize duplicative data collection requests made by the Fund of certified CDFIs and applicants and to expedite certification, re-certification, or other relevant processes administered by the Fund.
“(2) Applicable Federal regulator defined—In this subsection, the term “applicable Federal regulator” means—
“(A) with respect to a certified CDFI or an applicant that is regulated by both an appropriate Federal banking agency and the Bureau of Consumer Financial Protection, the Bureau of Consumer Financial Protection;
“(B) with respect to a certified CDFI or an applicant that is not regulated by the Bureau of Consumer Financial Protection, the appropriate Federal banking agency for such applicant; or
“(C) the Bureau of Consumer Financial Protection, with respect to a certified CDFI or an applicant—
“(i) that is not regulated by an appropriate Federal banking agency; and
“(ii) that offers or provides consumer financial products or services (as defined in section 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481).”
Sec. 8 Access to the discount window of the Federal Reserve System for MDIs and CDFIs
The Board of Governors of the Federal Reserve System shall establish a process under which minority depository institutions and community development financial institutions may have access to the discount window, at the seasonal credit interest rate most recently published on the Federal Reserve Statistical Release on selected interest rates (daily or weekly).
Sec. 9 Study on securitization by CDFIs
In general— The Secretary of the Treasury, in consultation with the Community Development Financial Institutions Fund and such other Federal agencies as the Secretary determines appropriate, shall carry out a study on—
the use of securitization by CDFIs;
any barriers to the use of securitization as a source of liquidity by CDFIs; and
any authorities available to the Government to support the use of securitization by CDFIs to the extent it helps serve underserved communities.
Report— Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Secretary shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing—
all findings and determinations made in carrying out the study required under subsection (a); and
any legislative or administrative recommendations of the Secretary that would promote the responsible use of securitization to help CDFIs in reaching more underserved communities.
CDFI defined— The term “CDFI” has the meaning given the term “community development financial institution” under section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994.