CDFI Crisis Fund Act

II 116TH CONGRESS 2D SESSION S. 4430 To amend the Community Development Banking and Financial Institutions Act of 1994 to establish a CDFI National Crisis Fund, and for other purposes. IN THE SENATE OF THE UNITED STATES AUGUST 4, 2020 Mr. SCHATZ (for himself, Ms. BALDWIN, Mr. VAN HOLLEN, Mrs. GILLI- BRAND, Mr. WYDEN, Ms. WARREN, Mrs. FEINSTEIN, Mr. BLUMENTHAL, Mr. SANDERS, Mr. HEINRICH, and Mr. MERKLEY) introduced the fol- lowing bill; which was read twice and referred to the Committee on Bank- ing, Housing, and Urban Affairs A BILL To amend the Community Development Banking and Finan- cial Institutions Act of 1994 to establish a CDFI Na- tional Crisis Fund, 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘CDFI Crisis Fund 4 Act’’. 5 SEC. 2. CDFI NATIONAL CRISIS FUND. 6 (a) IN GENERAL.—The Community Development 7 Banking and Financial Institutions Act of 1994 (12 8 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 2 •S 4430 IS U.S.C. 4701 et seq.) is amended by inserting after section 1 122 (12 U.S.C. 4719) the following: 2 ‘‘SEC. 123. CDFI CRISIS FUND. 3 ‘‘(a) DEFINITIONS.—In this section: 4 ‘‘(1) AFFECTED AREA.—The term ‘affected 5 area’ means— 6 ‘‘(A) a State that is subject to a covered 7 crisis; 8 ‘‘(B) a county that is subject to a covered 9 crisis described in paragraph (3)(B); or 10 ‘‘(C) a Tribal government that is— 11 ‘‘(i) located in a State that is subject 12 to a covered crisis; or 13 ‘‘(ii) subject to a covered crisis. 14 ‘‘(2) COMMUNITY DEVELOPMENT FINANCIAL IN- 15 STITUTION.—The term ‘community development fi- 16 nancial institution’ shall include small and emerging 17 community development financial institutions, as de- 18 fined in the most recent relevant regulations from 19 the Department of the Treasury. 20 ‘‘(3) COVERED CRISIS.—The term ‘covered cri- 21 sis’ means— 22 ‘‘(A) the emergency involving Federal pri- 23 mary responsibility determined to exist by the 24 President under section 501(b) of the Robert T. 25 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 3 •S 4430 IS Stafford Disaster Relief and Emergency Assist- 1 ance Act (42 U.S.C. 5191(b)) with respect to 2 the Coronavirus disease 2019 (COVID–19); 3 ‘‘(B) a major disaster exists in the State 4 for which assistance is authorized under section 5 408 of the Robert T. Stafford Disaster Relief 6 and Emergency Assistance Act (42 U.S.C. 7 5174) for a county; 8 ‘‘(C) a major disaster exists in the State 9 for which assistance is authorized under section 10 408 of the Robert T. Stafford Disaster Relief 11 and Emergency Assistance Act (42 U.S.C. 12 5174) for individuals who live in an area of the 13 State in which a majority of the residents of the 14 State reside; 15 ‘‘(D) an increase in statewide 6-month av- 16 erage unemployment rate, seasonally adjusted, 17 by not less than 0.5 percentage points more 18 than the lowest recorded unemployment rate 19 over the preceding 12-month period; or 20 ‘‘(E) an increase in the national 3-month 21 average unemployment rate, seasonally ad- 22 justed, by not less than 0.5 percentage points 23 more than the lowest recorded unemployment 24 rate over the preceding 12-month period. 25 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 4 •S 4430 IS ‘‘(4) CRISIS FUND.—The term ‘Crisis Fund’ 1 means the CDFI National Crisis Fund established 2 under this section. 3 ‘‘(5) LOW-INCOME.—The term ‘low-income’ 4 means having an income, as adjusted for family size, 5 that is— 6 ‘‘(A) for metropolitan areas, less than 80 7 percent of the area median income; and 8 ‘‘(B) for nonmetropolitan areas, the great- 9 er of— 10 ‘‘(i) less than 80 percent of the area 11 median income; or 12 ‘‘(ii) less than 80 percent of the state- 13 wide nonmetropolitan area median income. 14 ‘‘(6) MINORITY COMMUNITY DEVELOPMENT FI- 15 NANCIAL INSTITUTION.—The term ‘minority commu- 16 nity financial institution’ means a community devel- 17 opment financial institution that— 18 ‘‘(A) if a privately-owned institution, 51 19 percent is owned by one or more socially and 20 economically disadvantaged individuals; 21 ‘‘(B) if publicly-owned, 51 percent of the 22 stock is owned by one or more socially and eco- 23 nomically disadvantaged individuals; and 24 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 5 •S 4430 IS ‘‘(C) in the case of a mutual institution, 1 where the majority of the Board of Directors, 2 account holders, and the community which the 3 institution services is predominantly Black 4 American, Native American, Hispanic Amer- 5 ican, or Asian American. 6 ‘‘(7) NATIVE COMMUNITY DEVELOPMENT FI- 7 NANCIAL INSTITUTION.— 8 ‘‘(A) IN GENERAL.—The term ‘Native 9 community development financial institution’ 10 means a community development financial insti- 11 tution— 12 ‘‘(i) the activities of which not less 13 than 51 percent serve Native Americans; 14 or 15 ‘‘(ii) that is not less than 51 percent 16 owned or controlled Native Americans. 17 ‘‘(B) NATIVE AMERICANS.—In this para- 18 graph, the term ‘Native Americans’ has the 19 meaning given the term in section 3765 of title 20 38, United States Code. 21 ‘‘(8) STATE.—The term ‘State’ means any 22 State of the United States, the District of Columbia, 23 the Commonwealth of Puerto Rico, the Virgin Is- 24 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 6 •S 4430 IS lands, Guam, American Samoa, and the Common- 1 wealth of the Northern Mariana Islands. 2 ‘‘(9) TRIBAL GOVERNMENT.—The term ‘Tribal 3 government’ has the meaning given the term ‘Indian 4 tribal government’ in section 102 of the Robert T. 5 Stafford Disaster Relief and Emergency Assistance 6 Act (42 U.S.C. 5122). 7 ‘‘(10) VERY LOW-INCOME.—The term ‘very low- 8 income’ means having an income, as adjusted for 9 family size, that is— 10 ‘‘(A) for metropolitan areas, less than 50 11 percent of the area median income; and 12 ‘‘(B) for nonmetropolitan areas, the great- 13 er of— 14 ‘‘(i) less than 50 percent of the area 15 median income; or 16 ‘‘(ii) less than 50 percent of the state- 17 wide nonmetropolitan area median income. 18 ‘‘(b) PURPOSE.—The purpose of this section is to cre- 19 ate a fund to support community development financial 20 institutions during acute periods of crisis in their mission 21 to provide uniquely supportive financial products and serv- 22 ices to otherwise underserved clients. 23 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 7 •S 4430 IS ‘‘(c) ESTABLISHMENT.—There is established in the 1 Treasury the CDFI National Crisis Fund, which shall be 2 within the Fund. 3 ‘‘(d) AVAILABILITY OF CRISIS FUND.—Amounts in 4 the Crisis Fund shall be available, until expended, to pro- 5 vide grants to community development financial institu- 6 tions as provided under this section. 7 ‘‘(e) GRANTS.— 8 ‘‘(1) IN GENERAL.—The Crisis Fund shall be 9 authorized to make grants to community develop- 10 ment financial institutions to enable those institu- 11 tions to provide emergency assistance in the form of 12 financial products and services to help small busi- 13 nesses and low-income and very low-income popu- 14 lations respond to and recover from covered crises in 15 the affected area. 16 ‘‘(2) APPLICATION.— 17 ‘‘(A) IN GENERAL.—The Secretary shall— 18 ‘‘(i) accept applications during the pe- 19 riod beginning upon notification of a cov- 20 ered crisis under subsection (f) and ending 21 on the date that is 6 months after the date 22 of the notification; 23 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 8 •S 4430 IS ‘‘(ii) approve or deny any application 1 submitted for a grant under paragraph (1) 2 not later than 30 days after receipt; and 3 ‘‘(iii) upon request by an applicant for 4 a grant under paragraph (1), provide tech- 5 nical assistance for the applicant. 6 ‘‘(B) SELECTION FORMULA.— 7 ‘‘(i) IN GENERAL.—Not later than 8 180 days after the date of enactment of 9 this section, the Fund shall— 10 ‘‘(I) develop a selection formula 11 as may be necessary for the selection 12 of community development financial 13 institutions to receive assistance 14 under this section and guidance to aid 15 those institutions in meeting the for- 16 mula; and 17 ‘‘(II) post the information de- 18 scribed in subclause (I) on a publicly 19 available website. 20 ‘‘(ii) CONSIDERATIONS.—In estab- 21 lishing the selection formula under clause 22 (i), the Fund shall take into account— 23 ‘‘(I) the program capacity of a 24 community development financial in- 25 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 9 •S 4430 IS stitution to provide emergency assist- 1 ance in the form of financial products 2 and services to help targeted popu- 3 lations or populations in investment 4 areas recover from covered crises in 5 the affected area; and 6 ‘‘(II) the need for simplicity in 7 the selection formula given the vary- 8 ing capacities of community develop- 9 ment financial institutions and the 10 time frames required under this sec- 11 tion. 12 ‘‘(3) AMOUNT OF GRANTS.— 13 ‘‘(A) DETERMINATION OF AMOUNT.—The 14 amount of a grant made to a community devel- 15 opment financial institution under this section 16 shall be determined based on the previously 17 demonstrated capacity of the community devel- 18 opment financial institution to make impactful 19 financial services and products available, as de- 20 termined by the Secretary of the Treasury. 21 ‘‘(B) GRANT AMOUNT.— 22 ‘‘(i) MAXIMUM.—With respect to 23 grants made under this section, the grant 24 shall be in an amount that is not more 25 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 10 •S 4430 IS than 10 percent of the total amount in the 1 Crisis Fund for each fiscal year in which 2 the community development financial insti- 3 tution receives a grant. 4 ‘‘(ii) MINIMUM.—The Fund shall es- 5 tablish minimum grant amounts under this 6 section for each fiscal year in which a com- 7 munity development financial institution 8 receives a grant under this section based 9 on the demonstrated capacity of and the 10 cost of grant requirements for the appli- 11 cant. 12 ‘‘(C) LIMITATION OF ASSISTANCE.—The 13 total aggregate amount outstanding and com- 14 mitted to any community development financial 15 institution in grants under this section in any 16 fiscal year shall not exceed 15 percent of the 17 total amount of the Crisis Fund. 18 ‘‘(D) DISTRIBUTION OF ASSISTANCE.—The 19 Secretary shall disburse the full amount of a 20 grant under this section to an approved appli- 21 cant not later than 30 days after the date on 22 which the application is approved. 23 ‘‘(E) SET ASIDES.— 24 VerDate Sep 11 2014 20:18 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 11 •S 4430 IS ‘‘(i) NATIVE CDFIS.—Of the amounts 1 in the Crisis Fund, 10 percent shall be set 2 aside for grants made to Native commu- 3 nity development financial institutions, 4 which set aside may also qualify under 5 clause (ii). 6 ‘‘(ii) MINORITY COMMUNITY DEVEL- 7 OPMENT FINANCIAL INSTITUTIONS.—Of 8 the amounts in the Crisis Fund, 30 per- 9 cent shall be set aside for grants made to 10 minority community development financial 11 institutions. 12 ‘‘(F) USE OF GRANT FUNDS FOR MORE 13 THAN 1 COVERED CRISIS.—The Secretary may 14 retroactively approve use of grant funds for cov- 15 ered crises in affected areas that took place 16 after the grant was made. 17 ‘‘(4) USE OF FUNDS.—A recipient of a grant 18 under this section— 19 ‘‘(A) shall use— 20 ‘‘(i) not less than 90 percent of the 21 grant funds for activities described in 22 paragraph (1) in the affected area of the 23 covered crisis; 24 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 12 •S 4430 IS ‘‘(ii) not less than 25 percent of the 1 grant funds for activities described in 2 paragraph (1) that benefit very low-income 3 individuals; and 4 ‘‘(iii) not less than 15 percent of the 5 grant funds for activities described in 6 paragraph (1) that benefit individuals with 7 incomes of not more than 30 percent of 8 the area median income, which set aside 9 may also qualify under clause (ii); 10 ‘‘(B) may use not more than 10 percent of 11 the grant funds for administrative costs, costs 12 related to outreach and partnership building, 13 and financial products and services to areas 14 surrounding the affected area; and 15 ‘‘(C) may use any remaining grant funds 16 approved for a covered crisis in an affected area 17 for another covered crisis in an affected area 18 occurring after the grant was made, if the Sec- 19 retary approves the use of those funds under 20 paragraph (3)(F). 21 ‘‘(5) UNEMPLOYMENT MEASURES FOR TRIBAL 22 GOVERNMENTS.—The Commissioner of the Bureau 23 of Labor Statistics shall coordinate with the Assist- 24 ant Secretary of Indian Affairs to develop reliable 25 VerDate Sep 11 2014 03:49 Aug 21, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4430.IS S4430 kjohnson on DSK79L0C42PROD with BILLS 13 •S 4430 IS unemployment measures for American Indian, Na- 1 tive Alaskan, and Native Hawaiian communities in 2 order to understand when the requirements for a 3 covered crisis under subsection (a)(1)(C) are met 4 with respect to a Tribal government. 5 ‘‘(f) NOTIFICATION OF COVERED CRISIS.— 6 ‘‘(1) EMERGENCY OR MAJOR DISASTER.—The 7 Administrator of the Federal Emergency Manage- 8 ment Agency, through the Secretary of the Treas- 9 ury, shall notify the Fund when the requirements for 10 a covered crisis under subparagraph (A) or (B) of 11 subsection (a)(1) are met, which shall include the 12 date on which the requirements are met and the rel- 13 evant affected areas. 14 ‘‘(2) UNEMPLOYMENT.—The Secretary of 15 Labor [Text truncated for display. 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