INCENTIVES FOR DEPOSITORY INSTITUTION PARTICIPATION.

SEC. 114. INCENTIVES FOR DEPOSITORY INSTITUTION PARTICIPATION. (a) Function of Administrator.— (1) In general.— Of any funds appropriated pursuant to the authorization in section 121(a), the funds made available for use in carrying out this section in accordance with section 121(aJ(4) shall be administered by the Administrator of the Fund, in consultation with— (A) the Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act) and the National Credit Union Administration; (B) the individuals named pursuant to clauses (ii) and (iv) of section 104(d)(2)(G); and (C) any other representatives of insured depository institutions or other persons as the Administrator may determine to be appropriate. (2) Applicability of bank enterprise act of 1991.— Subject to subsection (b) and the consultation requirement of paragraph (1)— (A) section 233 of the Bank Enterprise Act of 1991 shall be applicable to the Administrator, for purposes of this section, in the same manner and to the same extent that such section is applicable to the Community Enterprise Assessment Credit Board; (B) the Administrator shall, for purposes of carrying out this section and section 233 of the Bank Enterprise Act of 1991— (i) have all powers and rights of the Community Enterprise Assessment Credit Board under section 233 of the Bank Enterprise Act of 1991 to administer and enforce any provision of such section 233 which is applicable to the Administrator under this section; and (ii) shall be subject to the same duties and restrictions imposed on the Community Enterprise Assessment Credit Board; and (C) the Administrator shall— (i) have all powers and rights of an appropriate Federal banking agency under section 233(b)(2) of the Bank Enterprise Act of 1991 to approve or disapprove the designation of qualified distressed communities for purposes of this section and provide information and assistance with respect to any such designation; and 108 STAT. 2180 (ii) shall be subject to the same duties imposed on the appropriate Federal banking agencies under such section 233(b)(2). (3) Awards.— The Administrator shall determine the amount of assessment credits, and shall make awards of those credits. (4) Regulations and guidelines.— The Administrator may prescribe such regulations and issue such guidelines as the Administrator determines to be appropriate to carry out this section. (5) Exceptions to applicability.— Notwithstanding paragraphs (1) through (4) of this subsection, subsections (a)(1) and (e)(2) of section 233 of the Bank Enterprise Act of 1991, and any other provision of the Federal Deposit Insurance Act relating to the Bank Enterprise Act of 1991, do not apply to the Administrator for purposes of this subtitle. (b) Provisions Relating to Administration of This Section.— (1) New lifeline accounts.— In applying section 233 of the Bank Enterprise Act of 1991 for purposes of this section, the Administrator shall treat the provision of new lifeline accounts by an insured depository institution as an activity which is qualified to be taken into account under section 233(a)(2)(A) of such Act. (2) Determination of assessment credit.— For the purpose of this subtitle, section 233(a)(3) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(3)) shall be applied by substituting the following text: “(3) Amount of assessment credit.— The amount of an assessment credit which may be awarded to an insured depository institution to carry out the qualified activities of the institution or of the subsidiaries of the institution pursuant to this section for any semiannual period shall be equal to the sum of— “(A) with respect to qualifying activities described in paragraph (2)(A), the amount which is equal to— “(i) 5 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is not a community development financial institution; or “(ii) 15 percent of the sum of the amounts determined under such subparagraph, in the case of an institution which is a community development financial institution; and “(B) with respect to qualifying activities described in paragraph (2)(C), 15 percent of the amounts determined under such subparagraph.”. (3) Adjustment of percentage.— Section 233(a)(5) of the Bank Enterprise Act of 1991 shall be applied for purposes of this section by— (A) substituting “institutions which are community development financial institutions” for “institutions which meet the community development organization requirements under section 234”; and (B) substituting “institutions which are not community development financial institutions” for “institutions which do not meet such requirements”. 108 STAT. 2181 (4) Designation of qdc.— Section 233(b)(2) of the Bank Enterprise Act of 1991 shall be applied for purposes of this section without regard to subparagraph (A)(ii) of such section 233(b)(2). (5) Operation on annual basis.— The Administrator may, in the Administrator’s discretion, apply section 233 of the Bank Enterprise Act of 1991 for purposes of this section by providing community enterprise assessment credits with respect to annual periods rather than semiannual periods. (6) Outreach.— The Administrator shall ensure that information about the Bank Enterprise Act of 1991 under this section is widely disseminated to all interested parties. (7) Qualified activities.— For the purpose of this subtitle, section 233(a)(2)(A) of the Bank Enterprise Act of 1991 shall be applied by inserting “of the increase” after “the amount”. (c) Technical and Conforming Amendments to the Bank Enterprise Act of 1991.— (1) Assistance to cdfi may be taken into account as qualifying activity.— Section 233(a)(2) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(2)) is amended— (A) in the material preceding subparagraph (A), by striking “shall be eligible” and inserting “may apply for”; (B) in subparagraph (A), by striking “financial assistance” and inserting “assistance”; (C) by striking “and” at the end of subparagraph (A); (D) by striking the period at the end of subparagraph (B) and inserting “; and”; and (E) by adding at the end the following new subparagraph: “(C) any increase during the period in the amount of new equity investments in community development financial institutions.”. (2) Additional assistance which may be considered as qualifying activities.— Section 233(a)(4) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(4)) is amended— (A) in the material preceding subparagraph (A), by striking “financial”; and (B) by adding at the end the following new subparagraphs: “(L) Loans made for the purpose of developing or supporting— “(i) commercial facilities that enhance revitalization, community stability, or job creation and retention efforts; “(ii) business creation and expansion efforts that— “(I) create or retain jobs for low-income people; “(II) enhance the availability of products and services to low-income people; or “(III) create or retain businesses owned by low-income people or residents of a targeted area; “(iii) community facilities that provide benefits to low-income people or enhance community stability; “(iv) home ownership opportunities that are afford-able to low-income households; “(v) rental housing that is principally affordable to low-income households; and “(vi) other activities deemed appropriate by the Board. 108 STAT. 2182 “(M) The provision of technical assistance to residents of qualified distressed communities in managing their personal finances through consumer education programs either sponsored or offered by insured depository institutions. “(N) The provision of technical assistance and consulting services to newly formed small businesses located in qualified distressed communities. “(O) The provision of technical assistance to, or servicing the loans of low- or moderate-income homeowners and homeowners located in qualified distressed communities.”. (3) Restriction on adjustment of percentages.— Section 233(a)(5) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(5)) is amended by striking “paragraph (3)” and inserting “paragraph (3)(A)”. (4) Credit limited to originations by institutions.— Section 233(a)(6) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(6)) is amended by striking “Investments by any- insured depository institution in loans and securities” and inserting “Loans, financial assistance, and equity investments made by any insured depository institution”. (5) Quantitative analysis of technical assistance.— Section 233(a) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)) is amended by adding at the end the following new paragraph: “(7) Quantitative analysis of technical assistance.— The Board may establish guidelines for analyzing the technical assistance described in subparagraphs (M), (N), and (O) of paragraph (4) for the purpose of quantifying the results of such assistance in determining the amount of any community assessment credit under this subsection.”. (6) Prohibition on double funding for same activities.— Section 233 of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a) is amended— (A) by redesignating subsection (g) as subsection (j); and (B) by inserting after subsection (f) the following new subsection: “(g) Prohibition on Double Funding for Same Activities.— No community development financial institution may receive a community enterprise assessment credit if such institution, either directly or through a community partnership— “(1) has received assistance within the preceding 12-month period, or has an application for assistance pending, under section 105 of the Community Development Banking and Financial Institutions Act of 1994; or “(2) has ever received assistance, under section 108 of the Community Development Banking and Financial Institutions Act of 1994, for the same activity during the same semi-annual period for which the institution seeks a community enterprise assessment credit under this section.“. (7) Additional administrative requirements.— Section 233 of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a) is amended by inserting after subsection (g) (as added by paragraph (6) of this subsection) the following new subsections: “(h) Priority of Awards.— “(1) Qualifying loans and services.— 108 STAT. 2183 “(A) In general.— If the amount of funds appropriated for purposes of carrying out this section for any fiscal year are insufficient to award the amount of assessment credits for which insured depository institutions have applied and an: eligible under this section, the Board shall, in awarding community enterprise assessment credits for qualifying activities under subparagraphs (A) and (B) of subsection (a)(2) for any semiannual period for which such appropriation is available, determine which institutions shall receive an award. “(B) Priority for support of efforts of cdfi.— The Board shall give priority to institutions that have supported the efforts of community development financial institutions in the qualified distressed community. “(C) Other factors.— The Board may also consider the following factors: “(i) Degree of difficulty.— The degree of difficulty in carrying out the activities that form the basis for the institution’s application. “(ii) Community impact.— The extent to which the activities that form the basis for the institution’s application have benefited the qualified distressed community. “(iii) Innovation.— The degree to which the activities that form the basis for the institution’s application have incorporated innovative methods for meeting community needs. “(iv) Leverage.— The leverage ratio between the dollar amount of the activities that form the basis for the institution’s application and the amount of the assessment credit calculated in accordance with this section for such activities. “(v) Size.— The amount of total assets of the institution. “(vi) New entry.— Whether the institution had provided financial services in the designated distressed community before such semiannual period. “(vii) Need for subsidy.— The degree to which the qualified activity which forms the basis for the application needs enhancement through an assessment credit. “(viii) Extent of distress in community.— The degree of poverty and unemployment in the designated distressed community, the proportion of the total population of the community which are low-income families and unrelated individuals, and the extent of other adverse economic conditions in such community. “(2) Qualifying investments.— If the amount of funds appropriated for purposes of carrying out this section for any fiscal year are insufficient to award the amount of assessment credits for which insured depository institutions have applied and are eligible under this section, the Board shall, in awarding community enterprise assessment credits for qualifying activities under subsection (a)(2)(C) for any semiannual period for which such appropriation is available, determine which institutions shall receive an award based on the leverage ratio between the dollar amount of the activities that form the basis for 108 STAT. 2184the institution’s application and the amount of the assessment credit calculated in accordance with this section for such activities. “(i) Determination of Amount of Assessment Credit.— Notwithstanding any other provision of this section, the determination of the amount of any community enterprise assessment credit under subsection (a)(3) for any insured depository institution for any semi-annual period shall be made solely at the discretion of the Board. No insured depository institution shall be awarded community enterprise assessment credits for any semiannual period in excess of an amount determined by the Board.”. (8) Additional definitions.— Subsection (j) of section 233 of the Bank Enterprise Act of 1991 (as redesignated by paragraph (6) of this subsection) is amended by adding at the end the following new paragraphs: “(4) Community development financial institution.— The term ‘community development financial institution’ has the same meaning as in section 103(5) of the Community Development Banking and Financial Institutions Act of 1994. “(5) Affiliate.— The term ‘affiliate’ has the same meaning as in section 2 of the Bank Holding Company Act of 1956.”.