---
kind: "section"
citation: "12 U.S.C. § 4719"
title: "12"
title_heading: "Banks and Banking"
number: "4719"
heading: "Grants to establish loan-loss reserve funds"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4719"
units:
  - "Chapter 47 — Community Development Banking"
  - "Subchapter I — Community Development Banking and Financial Institutions"
---

# §4719. Grants to establish loan-loss reserve funds

- (a) **Purposes—** The purposes of this section are—
  - (1) to make financial assistance available from the [Fund](/usc/12/4702.md?p=10) in order to help [community development financial institutions](/usc/12/4702.md?p=5-A) defray the costs of operating small dollar loan programs, by providing the amounts necessary for such institutions to establish their own loan loss reserve [funds](/usc/12/4702.md?p=10) to mitigate some of the losses on such small dollar loan programs; and
  - (2) to encourage [community development financial institutions](/usc/12/4702.md?p=5-A) to establish and maintain small dollar loan programs that would help give [consumers](/usc/12/5481.md?p=4) access to mainstream financial institutions and combat high cost small dollar lending.
- (b) **Grants—**
  - (1) **Loan-loss reserve fund grants—** The [Fund](/usc/12/4702.md?p=10) shall make grants to [community development financial institutions](/usc/12/4702.md?p=5-A) or to any partnership between such [community development financial institutions](/usc/12/4702.md?p=5-A) and any other federally [insured depository institution](/usc/12/4702.md?p=15) with a primary mission to serve targeted [investment areas](/usc/12/4702.md?p=16), as such areas are defined under [section 4702(16) of this title](/usc/12/4702.md?p=16), to enable such institutions or any partnership of such institutions to establish a loan-loss reserve [fund](/usc/12/4702.md?p=10) in order to defray the costs of a small dollar loan program established or maintained by such institution.
  - (2) **Matching requirement—** A [community development financial institution](/usc/12/4702.md?p=5-A) or any partnership of institutions established pursuant to [paragraph (1)](#b-1) shall provide non-Federal matching [funds](/usc/12/4702.md?p=10) in an amount equal to 50 percent of the amount of any grant received under this section.
  - (3) **Use of funds—** Any grant amounts received by a [community development financial institution](/usc/12/4702.md?p=5-A) or any partnership between or among such institutions under [paragraph (1)](#b-1)—
    - (A) may not be used by such institution to provide direct loans to [consumers](/usc/12/5481.md?p=4);
    - (B) may be used by such institution to help recapture a portion or all of a defaulted loan made under the small dollar loan program of such institution; and
    - (C) may be used to designate and utilize a fiscal agent for services normally provided by such an agent.
  - (4) **Technical assistance grants—** The [Fund](/usc/12/4702.md?p=10) shall make technical assistance grants to [community development financial institutions](/usc/12/4702.md?p=5-A) or any partnership between or among such institutions to support and maintain a small dollar loan program. Any grant amounts received under this paragraph may be used for technology, staff support, and other costs associated with establishing a small dollar loan program.
- (c) **Definitions—** For purposes of this section—
  - (1) the term “[consumer](/usc/12/5481.md?p=4) reporting agency that compiles and maintains files on [consumers](/usc/12/5481.md?p=4) on a nationwide basis” has the same meaning given such term in [section 1681a(p) of title 15](/usc/15/1681a.md?p=p); and
  - (2) the term “small dollar loan program” means a loan program wherein a [community development financial institution](/usc/12/4702.md?p=5-A) or any partnership between or among such institutions offers loans to [consumers](/usc/12/5481.md?p=4) that—
    - (A) are made in amounts not exceeding $2,500;
    - (B) must be repaid in installments;
    - (C) have no pre-payment penalty;
    - (D) the institution has to report payments regarding the loan to at least 1 of the [consumer](/usc/12/5481.md?p=4) reporting agencies that compiles and maintains files on [consumers](/usc/12/5481.md?p=4) on a nationwide basis; and
    - (E) meet any other affordability requirements as may be established by the [Administrator](/usc/12/4702.md?p=1).

## Source credit

(Pub. L. 103–325, title I, § 122, as added Pub. L. 111–203, title XII, § 1206, July 21, 2010, 124 Stat. 2131.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title.