---
kind: "section"
citation: "12 U.S.C. § 4742"
title: "12"
title_heading: "Banks and Banking"
number: "4742"
heading: "Definitions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4742"
units:
  - "Chapter 47 — Community Development Banking"
  - "Subchapter II — Small Business Capital Enhancement"
---

# §4742. Definitions


For purposes of this subchapter—

- (1) the term “[Fund](/usc/12/4702.md?p=10)” means the [Community Development Financial Institutions](/usc/12/4702.md?p=5-A) [Fund](/usc/12/4702.md?p=10) established under [section 4703 of this title](/usc/12/4703.md);
- (2) the term “[appropriate Federal banking agency](/usc/12/4702.md?p=2)”—
  - (A) has the same meaning as in [section 1813 of this title](/usc/12/1813.md); and
  - (B) includes the National [Credit](/usc/12/5481.md?p=7) Union Administration [Board](/usc/12/4702.md?p=4) in the case of any [credit](/usc/12/5481.md?p=7) union the deposits of which are insured in accordance with the Federal [Credit](/usc/12/5481.md?p=7) Union Act [[12 U.S.C. 1751](/usc/12/1751.md) et seq.];
- (3) the term “early loan” means a loan enrolled at a time when the aggregate covered amount of loans previously enrolled under the [Program](#9) by a particular [participating financial institution](#6) is less than $5,000,000;
- (4) the term “enrolled loan” means a loan made by a [participating financial institution](#6) that is enrolled by a [participating State](#7) in accordance with this subchapter;
- (5) the term “financial institution” means any federally chartered or [State](/usc/12/4702.md?p=18)-chartered commercial bank, [savings association](/usc/12/1861.md?p=b-5), savings bank, or [credit](/usc/12/5481.md?p=7) union;
- (6) the term “participating financial institution” means any [financial institution](#5) that has entered into a participation agreement with a [participating State](#7) in accordance with [section 4744 of this title](/usc/12/4744.md);
- (7) the term “participating State” means any [State](/usc/12/4702.md?p=18) that has been approved for participation in the [Program](#9) in accordance with [section 4743 of this title](/usc/12/4743.md);
- (8) the term “passive real estate ownership” means ownership of [real estate](/usc/12/1707.md?p=g) for the purpose of deriving income from speculation, trade, or rental, except that such term shall not include—
  - (A) the ownership of that portion of [real estate](/usc/12/1707.md?p=g) being used or intended to be used for the operation of the business of the owner of the [real estate](/usc/12/1707.md?p=g) (other than the business of passive ownership of [real estate](/usc/12/1707.md?p=g)); or
  - (B) the ownership of [real estate](/usc/12/1707.md?p=g) for the purpose of construction or renovation, until the completion of the construction or renovation phase;
- (9) the term “Program” means the Small Business Capital Enhancement Program established under this subchapter;
- (10) the term “reserve fund” means a [fund](/usc/12/4702.md?p=10), established by a [participating State](#7), earmarked for a particular [participating financial institution](#6), for the purposes of—
  - (A) depositing all required premium charges paid by the [participating financial institution](#6) and by each borrower receiving a loan under the [Program](#9) from a [participating financial institution](#6);
  - (B) depositing contributions made by the [participating State](#7); and
  - (C) covering losses on [enrolled loans](#4) by disbursing accumulated [funds](/usc/12/4702.md?p=10); and
- (11) the term “[State](/usc/12/4702.md?p=18)” means—
  - (A) a [State](/usc/12/4702.md?p=18) of the United States;
  - (B) the District of Columbia;
  - (C) any political subdivision of a [State](/usc/12/4702.md?p=18) of the United States, which subdivision has a population in excess of the population of the least populated [State](/usc/12/4702.md?p=18) of the United States; and
  - (D) any other political subdivision of a [State](/usc/12/4702.md?p=18) of the United States that the [Fund](/usc/12/4702.md?p=10) determines has the capacity to participate in the [program](#9).[^1]

## Footnotes

[^1]: So in original. Probably should be capitalized.

## Source credit

(Pub. L. 103–325, title II, § 252, Sept. 23, 1994, 108 Stat. 2204.)

## Notes

### Editorial Notes

### References in Text

The Federal Credit Union Act, referred to in par. (2)(B), is act June 26, 1934, ch. 750, 48 Stat. 1216, which is classified generally to chapter 14 (§ 1751 et seq.) of this title. For complete classification of this Act to the Code, see section 1751 of this title and Tables.