II 118TH CONGRESS 1ST SESSION S. 1442 To amend the Community Development Banking and Financial Institutions Act of 1994 to adjust for inflation the maximum amount of assistance provided by the Community Development Financial Institutions Fund, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 4, 2023 Mr. WARNER (for himself and Mr. CRAPO) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Community Development Banking and Finan- cial Institutions Act of 1994 to adjust for inflation the maximum amount of assistance provided by the Commu- nity Development Financial Institutions 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 ‘‘Scaling Community 4 Lenders Act of 2023’’. 5 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 1442 IS SEC. 2. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUID- 1 ITY. 2 (a) IN GENERAL.—Section 113 of the Community 3 Development Banking and Financial Institutions Act of 4 1994 (12 U.S.C. 4712) is amended— 5 (1) by striking subsection (a) and inserting the 6 following: 7 ‘‘(a) ASSISTANCE.— 8 ‘‘(1) IN GENERAL.—The Fund may provide 9 funds to organizations for the purpose of— 10 ‘‘(A) purchasing loans, loan participations, 11 or interests therein from community develop- 12 ment financial institutions; 13 ‘‘(B) providing guarantees, loan loss re- 14 serves, or other forms of credit enhancement to 15 promote liquidity for community development 16 financial institutions; and 17 ‘‘(C) otherwise enhancing the liquidity of 18 community development financial institutions. 19 ‘‘(2) CONSTRUCTION OF FEDERAL GOVERN- 20 MENT FUNDS.—For purposes of this subsection, not- 21 withstanding section 105(a)(9) of the Housing and 22 Community Development Act of 1974 (42 U.S.C. 23 5305(a)(9)), funds provided pursuant to such Act 24 shall be considered to be Federal Government 25 funds.’’; 26 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 1442 IS (2) by striking subsection (b) and inserting the 1 following: 2 ‘‘(b) SELECTION.— 3 ‘‘(1) IN GENERAL.—The selection of organiza- 4 tions to receive assistance and the amount of assist- 5 ance to be provided to any organization under this 6 section shall be at the discretion of the Fund and in 7 accordance with criteria established by the Fund. 8 ‘‘(2) ELIGIBILITY.—Organizations eligible to re- 9 ceive assistance under this section— 10 ‘‘(A) shall have a primary purpose of pro- 11 moting community development; and 12 ‘‘(B) are not required to be community de- 13 velopment financial institutions. 14 ‘‘(3) PRIORITIZATION.—For the purpose of 15 making an award of funds under this section, the 16 Fund shall prioritize the selection of organizations 17 that— 18 ‘‘(A) demonstrate relevant experience or an 19 ability to carry out the activities under this sec- 20 tion, including experience leading or partici- 21 pating in loan purchase structures or pur- 22 chasing or participating in the purchase of, as- 23 signing, or otherwise transferring, assets from 24 community development financial institutions; 25 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 1442 IS ‘‘(B) demonstrate the capacity to increase 1 the number or dollar volume of loan origina- 2 tions or expand the products or services of com- 3 munity development financial institutions, in- 4 cluding by leveraging the award with private 5 capital; and 6 ‘‘(C) will use the funds to support commu- 7 nity development financial institutions that rep- 8 resent broad geographic coverage or that serve 9 borrowers that have experienced significant 10 unmet capital or financial services needs.’’; 11 (3) in subsection (c), in the first sentence— 12 (A) by striking ‘‘$5,000,000’’ and inserting 13 ‘‘$20,000,000’’; and 14 (B) by striking ‘‘during any 3-year pe- 15 riod’’; and 16 (4) by adding at the end the following: 17 ‘‘(g) REGULATIONS.—The Secretary may promulgate 18 such regulations as may be necessary or appropriate to 19 carry out the authorities or purposes of this section. 20 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 21 are authorized to be appropriated to the Secretary 22 $100,000,000 to carry out this section, including to carry 23 out a study on the options to increase community develop- 24 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 1442 IS ment financial institution liquidity and secondary market 1 opportunities.’’. 2 (b) EMERGENCY CAPITAL INVESTMENT FUNDS.— 3 Section 104A of the Community Development Banking 4 and Financial Institutions Act of 1994 (12 U.S.C. 4703a) 5 is amended by striking subsection (l) and inserting the fol- 6 lowing: 7 ‘‘(l) DEPOSIT OF FUNDS.—All funds received by the 8 Secretary in connection with purchases made pursuant 9 this section, including interest payments, dividend pay- 10 ments, and proceeds from the sale of any financial instru- 11 ment, shall be deposited into the Fund and used— 12 ‘‘(1) to provide financial assistance to organiza- 13 tions pursuant to section 113; and 14 ‘‘(2) to provide financial and technical assist- 15 ance pursuant to section 108, except that subsection 16 (e) of that section shall be waived.’’. 17 (c) ANNUAL REPORTS.— 18 (1) DEFINITIONS.—In this subsection, the 19 terms ‘‘community development financial institu- 20 tion’’ and ‘‘Fund’’ have the meanings given the 21 terms in section 103 of the Community Development 22 Banking and Financial Institutions Act of 1994 (12 23 U.S.C. 4702). 24 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •S 1442 IS (2) REQUIREMENTS.—Not later than 1 year 1 after the date on which assistance is first provided 2 under section 113 of the Community Development 3 Banking and Financial Institutions Act of 1994 (12 4 U.S.C. 4712) pursuant to the amendments made by 5 subsection (a) of this section, and annually there- 6 after through 2028, the Secretary of the Treasury 7 shall submit to Congress a written report describing 8 the use of the Fund for the 1-year period preceding 9 the submission of the report for the purposes de- 10 scribed in subsection (a)(1) of such section 113, as 11 amended by subsection (a) of this section, which 12 shall include, with respect to the period covered by 13 the report— 14 (A) the total amount of— 15 (i) loans, loan participations, and in- 16 terests therein purchased from community 17 development financial institutions; and 18 (ii) guarantees, loan loss reserves, and 19 other forms of credit enhancement pro- 20 vided to community development financial 21 institutions; 22 (B) the effect of the purchases and guar- 23 antees made by the Fund on the overall com- 24 VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •S 1442 IS petitiveness of community development financial 1 institutions; and 2 (C) the impact of the purchases and guar- 3 antees made by the Fund on the liquidity of 4 community development financial institutions. 5 Æ VerDate Sep 11 2014 03:06 May 13, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S1442.IS S1442 pbinns on DSKJLVW7X2PROD with $$_JOB