Financial Services Racial Equity, Inclusion, and Economic Justice Act

IIB 117TH CONGRESS 2D SESSION H. R. 2543 IN THE SENATE OF THE UNITED STATES JUNE 21, 2022 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To amend the Federal Reserve Act to add additional demo- graphic reporting requirements, to modify the goals of the Federal Reserve System, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 2 HR 2543 RFS SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Financial Services Racial Equity, Inclusion, and Eco- 3 nomic Justice Act’’. 4 (b) TABLE OF CONTENTS.—The table of contents for 5 this Act is as follows: 6 Sec. 1. Short title; table of contents. TITLE I—EQUITY IN MONETARY POLICY Sec. 101. Duty to minimize and eliminate racial disparities. Sec. 102. Appearances before and reports to the Congress. TITLE II—DIVERSITY DATA COLLECTION AND REPORTING Subtitle A—Diversity and Inclusion Data Accountability and Transparency Sec. 211. Disclosures by regulated entities. Subtitle B—LGBTQ Business Equal Credit Enforcement and Investment Sec. 221. Small business loan data collection. TITLE III—ACCESS TO HOUSING AND LENDING Subtitle A—Improving Language Access in Mortgage Servicing Sec. 311. Findings. Sec. 312. Language access requirements and resources. Subtitle B—Fair Lending for All Sec. 321. Office of Fair Lending Testing. Sec. 322. Prohibition on credit discrimination. Sec. 323. Criminal penalties for violations of the Equal Credit Opportunity Act. Sec. 324. Review of loan applications. Sec. 325. Mortgage data collection. Subtitle C—Promoting and Advancing Communities of Color Through Inclusive Lending Sec. 331. Strengthening diverse and mission-driven community financial insti- tutions. Sec. 332. Capital investments, grants, and technology support for MDIs and CDFIs. Sec. 333. Supporting Young Entrepreneurs Program. Sec. 334. Map of minority depository institutions and community development financial institutions. Sec. 335. Report on certified community development financial institutions. Sec. 336. Consultation and minimization of data requests. Sec. 337. Access to the discount window of the Federal Reserve System for MDIs and CDFIs. VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 3 HR 2543 RFS Sec. 338. Study on securitization by CDFIs. TITLE IV—DIVERSITY IN FINANCIAL INSTITUTIONS AND CORPORATIONS Subtitle A—Promoting New and Diverse Depository Institutions Sec. 411. Study and strategic plan. Subtitle B—Promoting Diversity and Inclusion in Banking Sec. 421. Diversity and inclusion ratings. Subtitle C—Improving Corporate Governance Through Diversity Sec. 431. Submission of data relating to diversity by issuers. Sec. 432. Diversity advisory group. Subtitle D—Ensuring Diversity in Community Banking Sec. 441. Short title. Sec. 442. Sense of Congress on funding the loan-loss reserve fund for small dol- lar loans. Sec. 443. Definitions. Sec. 444. Inclusion of women’s banks in the definition of minority depository institution. Sec. 445. Establishment of impact bank designation. Sec. 446. Minority Depositories Advisory Committees. Sec. 447. Federal deposits in minority depository institutions. Sec. 448. Minority Bank Deposit Program. Sec. 449. Diversity report and best practices. Sec. 450. Investments in minority depository institutions and impact banks. Sec. 451. Report on covered mentor-protege programs. Sec. 452. Custodial deposit program for covered minority depository institutions and impact banks. Sec. 453. Streamlined community development financial institution applications and reporting. Sec. 454. Task force on lending to small business concerns. Subtitle E—Expanding Opportunity for Minority Depository Institutions Sec. 461. Establishment of Financial Agent Mentor-Prote´ge´ Program. TITLE V—COMMUNITY DEVELOPMENT Subtitle A—CDFI Bond Guarantee Program Improvement Sec. 511. Sense of Congress. Sec. 512. Guarantees for bonds and notes issued for community or economic development purposes. Sec. 513. Report on the CDFI bond guarantee program. Subtitle B—Expanding Financial Access for Underserved Communities Sec. 521. Credit union service to underserved areas. Sec. 522. Member business lending in underserved areas. Sec. 523. Underserved area defined. Sec. 524. Reports by the National Credit Union Administration. Sec. 525. Rule of construction. VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6211 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 4 HR 2543 RFS TITLE VI—ENSURING DIVERSE LEADERSHIP OF THE FEDERAL RESERVE Sec. 601. Short title. Sec. 602. Congressional Findings. Sec. 603. Federal reserve bank presidents. Sec. 604. Technical adjustments. TITLE VII—STUDYING BARRIERS TO HOUSING Sec. 701. Short title. Sec. 702. GAO study and report on reducing homelessness through public hous- ing and section 8 rental assistance. TITLE VIII—STATE OF HOUSING IN THE UNITED STATES Sec. 801. Interagency working group reports. Sec. 802. Testimony on the state of housing affordability and supply. TITLE XI—REPORT ON HOUSING FOR LGBTQ+ PERSONS Sec. 901. HUD report. TITLE X—‘‘EXPANDING ACCESS TO CREDIT THROUGH CONSUMER-PERMISSIONED DATA’’ Sec. 1001. Short title. Sec. 1002. Findings. Sec. 1003. Requirement to consider additional credit information when making mortgage loans. TITLE XI—PAYMENT CHOICE Sec. 1101. Short title. Sec. 1102. Sense of congress. Sec. 1103. Retail businesses prohibited from refusing cash payments. TITLE I—EQUITY IN MONETARY 1 POLICY 2 SEC. 101. DUTY TO MINIMIZE AND ELIMINATE RACIAL DIS- 3 PARITIES. 4 The Federal Reserve Act (12 U.S.C. 221 et seq.) is 5 amended by inserting after section 2B the following: 6 ‘‘SEC. 2C. DUTY TO MINIMIZE AND ELIMINATE RACIAL DIS- 7 PARITIES. 8 ‘‘The Board of Governors of the Federal Reserve Sys- 9 tem and the Federal Open Market Committee shall exer- 10 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 5 HR 2543 RFS cise all duties and functions in a manner that fosters the 1 elimination of disparities across racial and ethnic groups 2 with respect to employment, income, wealth, and access 3 to affordable credit, including actions in carrying out— 4 ‘‘(1) monetary policy; 5 ‘‘(2) regulation and supervision of banks, 6 thrifts, bank holding companies, savings and loan 7 holding companies, and nonbank financial companies 8 and systemically important financial market utilities 9 designated by the Financial Stability Oversight 10 Council; 11 ‘‘(3) operation of payment systems; 12 ‘‘(4) implementation of the Community Rein- 13 vestment Act of 1977; 14 ‘‘(5) enforcement of fair lending laws; and 15 ‘‘(6) community development functions.’’. 16 SEC. 102. APPEARANCES BEFORE AND REPORTS TO THE 17 CONGRESS. 18 (a) Section 2B of the Federal Reserve Act (12 U.S.C. 19 225b) is amended— 20 (1) in subsection (a)(1)— 21 (A) in subparagraph (A), by striking 22 ‘‘and’’ at the end; and 23 (B) by striking subparagraph (B) and in- 24 serting the following: 25 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 6 HR 2543 RFS ‘‘(B) economic developments and prospects 1 for the future described in the report required 2 in subsection (b), including a discussion of dis- 3 parities in employment, income, and wealth 4 across racial and ethnic groups as well as other 5 specific segments of the population; and 6 ‘‘(C) plans, activities, and actions of the 7 Board and the Federal Open Market Committee 8 to minimize and eliminate disparities across ra- 9 cial and ethnic groups with respect to employ- 10 ment, wages, wealth, and access to affordable 11 credit pursuant to section 2C.’’; and 12 (2) in subsection (b)— 13 (A) by striking ‘‘The Board’’ and inserting 14 the following: 15 ‘‘(1) IN GENERAL.—The Board’’; and 16 (B) by adding at the end the following: 17 ‘‘(2) TREND INFORMATION.— 18 ‘‘(A) IN GENERAL.—Each report required 19 under paragraph (1) shall include recent trends 20 in the unemployment rate, labor force participa- 21 tion rate, employment to population ratio, me- 22 dian household income, and change in real 23 earnings. 24 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 7 HR 2543 RFS ‘‘(B) DEMOGRAPHIC INFORMATION.—The 1 trends required to be reported under subpara- 2 graph (A) shall include— 3 ‘‘(i) a comparison among different de- 4 mographic groups, including race, eth- 5 nicity, gender, individuals with dependent 6 children under the age of 18 (to the extent 7 possible), educational attainment, age, dis- 8 ability (as such term is defined in section 9 3 of the Americans with Disabilities Act of 10 1990), and shall also provide cross-sec- 11 tional data on the interaction between 12 these groups and note any statistically sig- 13 nificant findings, to the extent available; 14 and 15 ‘‘(ii) data disaggregated by ethnic 16 subgroup, to the extent available. 17 ‘‘(C) ETHNIC SUBGROUP DEFINED.—The 18 term ‘ethnic subgroup’ means a social group 19 that— 20 ‘‘(i) has a distinct social, racial, geo- 21 graphic, national origin, or cultural iden- 22 tity; and 23 ‘‘(ii) is susceptible to being disadvan- 24 taged.’’. 25 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 8 HR 2543 RFS (b) The Board of Governors of the Federal Reserve 1 System, in consultation with the Federal Deposit Insur- 2 ance Corporation, the Office of the Comptroller of the 3 Currency, the National Credit Union Administration, and 4 the Bureau of Consumer Financial Protection, shall issue 5 a report to Congress containing the plans, activities, and 6 actions of the Board of Governors of the Federal Reserve 7 System to minimize and eliminate disparities across racial 8 and ethnic groups with respect to access to financial prod- 9 ucts for the purpose of restoration, renovations, or repair 10 following a federally-declared disaster. 11 TITLE II—DIVERSITY DATA 12 COLLECTION AND REPORTING 13 Subtitle A—Diversity and Inclusion 14 Data Accountability and Trans- 15 parency 16 SEC. 211. DISCLOSURES BY REGULATED ENTITIES. 17 Section 342(b) of the Dodd-Frank Wall Street Re- 18 form and Consumer Protection Act (12 U.S.C. 5452(b)) 19 is amended by adding at the end the following: 20 ‘‘(5) DISCLOSURES BY REGULATED ENTI- 21 TIES.—The Director of each Office shall require en- 22 tities with 100 employees or greater regulated by the 23 applicable agency to provide such information as 24 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 9 HR 2543 RFS may be required to carry out the duties of the Direc- 1 tor.’’. 2 Subtitle B—LGBTQ Business Equal 3 Credit Enforcement and Invest- 4 ment 5 SEC. 221. SMALL BUSINESS LOAN DATA COLLECTION. 6 (a) IN GENERAL.—Section 704B of the Equal Credit 7 Opportunity Act (15 U.S.C. 1691c–2) is amended— 8 (1) by inserting ‘‘LGBTQ-owned,’’ after ‘‘mi- 9 nority-owned,’’ each place such term appears; 10 (2) in subsection (e)(2)(G), by inserting ‘‘, sex- 11 ual orientation, gender identity’’ after ‘‘sex’’; and 12 (3) in subsection (h), by adding at the end the 13 following: 14 ‘‘(7) LGBTQ-OWNED BUSINESS.—The term 15 ‘LGBTQ-owned business’ means a business— 16 ‘‘(A) more than 50 percent of the owner- 17 ship or control of which is held by 1 or more 18 individuals self-identifying as lesbian, gay, bi- 19 sexual, transgender, or queer; and 20 ‘‘(B) more than 50 percent of the net prof- 21 it or loss of which accrues to 1 or more individ- 22 uals self-identifying as lesbian, gay, bisexual, 23 transgender, or queer.’’. 24 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 10 HR 2543 RFS (b) SENSE OF CONGRESS.—It is the sense of the 1 Congress that the term ‘‘sex’’, as used within the Equal 2 Credit Opportunity Act, includes an individual’s sexual 3 orientation and gender identity, and that this section, in 4 part, clarifies that the sex, sexual orientation, and gender 5 identity of the principal owners of a business should be 6 collected under section 704B of the Equal Credit Oppor- 7 tunity Act as three separate forms of information. 8 TITLE III—ACCESS TO HOUSING 9 AND LENDING 10 Subtitle A—Improving Language 11 Access in Mortgage Servicing 12 SEC. 311. FINDINGS. 13 The Congress finds the following: 14 (1) Housing is the largest portion of most 15 household budgets in the United States and there- 16 fore a foundational component of financial access 17 and opportunity. 18 (2) Due in part to a legacy of discrimination in 19 the United States, people of color are disproportion- 20 ately experiencing homelessness, are disproportion- 21 ately renting, and disproportionately paying 22 unaffordable rents, which acts as a barrier to home- 23 ownership. 24 VerDate Sep 11 2014 03:03 Jun 22, 2022 Jkt 029200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2543.RFS H2543 kjohnson on DSK79L0C42PROD with BILLS 11 HR 2543 RFS (3) Access to fair and affordable housing, both 1 rental and homeownership opportunities, is critical 2 to upward economic mobility. This includes address- 3 ing language barriers in mortgage servicing to en- 4 sure borrowers have culturally sensitive, in-language 5 access to critical lending information, can enter into 6 fair and sustainable homeownership, and preserve 7 their home equity. 8 SEC. 312. LANGUAGE ACCESS REQUIREMENTS AND RE- 9 SOURCES. 10 (a) IN GENERAL.—Chapter 2 of title I of the Truth 11 in Lending Act (15 U.S.C. 1631 et seq.) is amended by 12 inserting after section 129H the following: 13 ‘‘§ 129I. Language access requirements. 14 ‘‘(a) STANDARD LANGUAGE PREFERENCE FORM.— 15 Not later than 90 days after the date of the enactment 16 of this section, the Director of the Bureau of Consumer 17 Financial Protection shall, after consulting with the Sec- 18 retary of Agriculture, the Director of the Federal Housing 19 Finance Agency, the Secretary of Veterans Affairs, and 20 the Commissioner of the Federal Housing Authority, issue 21 a rule establishing a s [Text truncated for display. 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