12 U.S.C. § 1834a | Assessment credits for qualifying activities relating to distressed communities

(a)

Determination of credits for increases in community enterprise activities

(1)

In general

The Community Enterprise Assessment Credit Board established under subsection (d) shall issue guidelines for insured depository institutions eligible under this subsection for any community enterprise assessment credit with respect to any semiannual period. Such guidelines shall—

(A)

section 1817(b)(7) of this title designate the eligibility requirements for any institution meeting applicable capital standards to receive an assessment credit under ; and

(B)

determine the community enterprise assessment credit available to any eligible institution under paragraph (3).

(2)

Qualifying activities

1 So in original.

An insured depository institution may apply for for  any community enterprise assessment credit for any semiannual period for—

(A)

the amount, during such period, of new originations of qualified loans and other assistance provided for low- and moderate-income persons in distressed communities, or enterprises integrally involved with such neighborhoods, which the Board determines are qualified to be taken into account for purposes of this subsection;

(B)

the amount, during such period, of deposits accepted from persons domiciled in the distressed community, at any office of the institution (including any branch) located in any qualified distressed community, and new originations of any loans and other financial assistance made within that community, except that in no case shall the credit for deposits at any institution or branch exceed the credit for loans and other financial assistance by the bank or branch in the distressed community; and

(C)

any increase during the period in the amount of new equity investments in community development financial institutions.

(3)

Amount of assessment credit

section 1817(b)(7) of this title section 1834b of this titleThe amount of any community enterprise assessment credit available under for any insured depository institution, or a qualified portion thereof, shall be the amount which is equal to 5 percent, in the case of an institution which does not meet the community development organization requirements under , and 15 percent, in the case of an institution, or a qualified portion thereof, which meets such requirements (or any percentage designated under paragraph (5)) of—

(A)

for the first full semiannual period in which community enterprise assessment credits are available, the sum of—

(i)

the amounts of assets described in paragraph (2)(A); and

(ii)

the amounts of deposits, loans, and other financial assistance described in paragraph (2)(B); and

(B)

for any subsequent semiannual period, the sum of—

(i)

any increase during such period in the amount of assets described in paragraph (2)(A) that has been deemed eligible for credit by the Board; and

(ii)

any increase during such period in the amounts of deposits, loans, and other financial assistance described in paragraph (2)(B) that has been deemed eligible for credit by the Board.

(4)

Determination of qualified loans and other financial assistance

Except as provided in paragraph (6), the types of loans and other assistance which the Board may determine to be qualified to be taken into account under paragraph (2)(A) for purposes of the community enterprise assessment credit, may include the following:

(A)

Loans insured or guaranteed by the Secretary of Housing and Urban Development, the Secretary of the Department of Veterans Affairs, the Administrator of the Small Business Administration, and the Secretary of Agriculture.

(B)

Loans or financing provided in connection with activities assisted by the Administrator of the Small Business Administration or any small business investment company and investments in small business investment companies.

(C)

42 U.S.C. 8101 Loans or financing provided in connection with any neighborhood housing service program assisted under the Neighborhood Reinvestment Corporation Act [ et seq.].

(D)

42 U.S.C. 5301 Loans or financing provided in connection with any activities assisted under the community development block grant program under title I of the Housing and Community Development Act of 1974 [ et seq.].

(E)

42 U.S.C. 12721 Loans or financing provided in connection with activities assisted under title II of the Cranston-Gonzalez National Affordable Housing Act [ et seq.].

(F)

42 U.S.C. 1437aaa 42 U.S.C. 12871 Loans or financing provided in connection with a homeownership program assisted under title III of the United States Housing Act of 1937 [ et seq.] or subtitle B or C of title IV of the Cranston-Gonzalez National Affordable Housing Act [ et seq., 12891 et seq.].

(G)

Financial assistance provided through community development corporations.

(H)

Federal and State programs providing interest rate assistance for homeowners.

(I)

Extensions of credit to nonprofit developers or purchasers of low-income housing and small business developments.

(J)

In the case of members of any Federal home loan bank, participation in the community investment fund program established by the Federal home loan banks.

(K)

Conventional mortgages targeted to low- or moderate-income persons.

(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 affordable to low-income households;

(v)

rental housing that is principally affordable to low-income households; and

(vi)

other activities deemed appropriate by the Board.

(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.

(5)

Adjustment of percentage

section 1834b of this titleThe Board may increase or decrease the percentage referred to in paragraph (3)(A) for determining the amount of any community enterprise assessment credit pursuant to such paragraph, except that the percentage established for insured depository institutions which meet the community development organization requirements under shall not be less than 3 times the amount of the percentage applicable for insured depository institutions which do not meet such requirements.

(6)

Certain investments not eligible to be taken into account

Loans, financial assistance, and equity investments made by any insured depository institution that are not the result of originations by the institution shall not be taken into account for purposes of determining the amount of any credit pursuant to this subsection.

(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.

(b)

“Qualified distressed community” defined

(1)

In general

For purposes of this section, the term “qualified distressed community” means any neighborhood or community which—

(A)

meets the minimum area requirements under paragraph (3) and the eligibility requirements of paragraph (4); and

(B)

is designated as a distressed community by any insured depository institution in accordance with paragraph (2) and such designation is not disapproved under such paragraph.

(2)

Designation requirements

(A)

Notice of designation

(i)

Notice to agency

Upon designating an area as a qualified distressed community, an insured depository institution shall notify the appropriate Federal banking agency of the designation.

(ii)

Public notice

Upon the effective date of any designation of an area as a qualified distressed community, an insured depository institution shall publish a notice of such designation in major newspapers and other community publications which serve such area.

(B)

Agency duties relating to designations

(i)

Providing information

At the request of any insured depository institution, the appropriate Federal banking agency shall provide to the institution appropriate information to assist the institution to identify and designate a qualified distressed community.

(ii)

Period for disapproval

Any notice received by the appropriate Federal banking agency from any insured depository institution under subparagraph (A)(i) shall take effect at the end of the 90-day period beginning on the date such notice is received unless written notice of the approval or disapproval of the application by the agency is provided to the institution before the end of such period.

(3)

Minimum area requirements

For purposes of this subsection, an area meets the requirements of this paragraph if—

(A)

the area is within the jurisdiction of 1 unit of general local government;

(B)

the boundary of the area is contiguous; and

(C)

the area—

(i)

has a population, as determined by the most recent census data available, of not less than—

(I)

4,000, if any portion of such area is located within a metropolitan statistical area (as designated by the Director of the Office of Management and Budget) with a population of 50,000 or more; or

(II)

1,000, in any other case; or

(ii)

is entirely within an Indian reservation (as determined by the Secretary of the Interior).

(4)

Eligibility requirements

For purposes of this subsection, an area meets the requirements of this paragraph if the following criteria are met:

(A)

At least 30 percent of the residents residing in the area have incomes which are less than the national poverty level.

(B)

The unemployment rate for the area is 1½ times greater than the national average (as determined by the Bureau of Labor Statistics’ most recent figures).

(C)

Such additional eligibility requirements as the Board may, in its discretion, deem necessary to carry out the provisions of this subtitle.

(c)

Omitted

(d)

Community Enterprise Assessment Credit Board

(1)

Establishment

There is hereby established the “Community Enterprise Assessment Credit Board”.

(2)

Number and appointment

The Board shall be composed of 5 members as follows:

(A)

The Secretary of the Treasury or a designee of the Secretary.

(B)

The Secretary of Housing and Urban Development or a designee of the Secretary.

(C)

The Chairperson of the Federal Deposit Insurance Corporation or a designee of the Chairperson.

(D)

2 individuals appointed by the President from among individuals who represent community organizations.

(3)

Terms

(A)

Appointed members

Each appointed member shall be appointed for a term of 5 years.

(B)

Interim appointment

Any member appointed to fill a vacancy occurring before the expiration of the term to which such member’s predecessor was appointed shall be appointed only for the remainder of such term.

(C)

Continuation of service

Each appointed member may continue to serve after the expiration of the period to which such member was appointed until a successor has been appointed.

(4)

Chairperson

The Secretary of the Treasury shall serve as the Chairperson of the Board.

(5)

No pay

No members of the Commission may receive any pay for service on the Board.

(6)

Travel expenses

Each member shall receive travel expenses, including per diem in lieu of subsistence, in accordance with sections 5702 and 5703 of title 5.

(7)

Meetings

The Board shall meet at the call of the Chairperson or a majority of the Board’s members.

(e)

Duties of Board

(1)

Procedure for determining community enterprise assessment credits

The Board shall establish procedures for accepting and considering applications by insured depository institutions under subsection (a)(1) for community enterprise assessment credits and making determinations with respect to such applications.

(2)

Notice to FDIC

The Board shall notify the applicant and the Federal Deposit Insurance Corporation of any determination of the Board with respect to any application referred to in paragraph (1) in sufficient time for the Corporation to include the amount of such credit in the computation of the semiannual assessment to which such credit is applicable.

(f)

Availability of funds

The provisions of this section shall not take effect until appropriations are specifically provided in advance. There are hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this section.

(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)

section 4704 of this title has received assistance within the preceding 12-month period, or has an application for assistance pending, under ; or

(2)

section 4707 of this title has ever received assistance, under , for the same activity during the same semiannual period for which the institution seeks a community enterprise assessment credit under this section.

(h)

Priority of awards

(1)

Qualifying loans and services

(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 are 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 the 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 semiannual 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.

(j)

Definitions

For purposes of this section—

(1)

Appropriate Federal banking agency

section 1813(q) of this titleThe term “appropriate Federal banking agency” has the meaning given to such term in .

(2)

Board

2 So in original. The words “under the amendment made” probably should not appear.

The term “Board” means the Community Enterprise Assessment Credit Board established under the amendment made  by subsection (d).

(3)

Insured depository institution

section 1813(c)(2) of this titleThe term “insured depository institution” has the meaning given to such term in .

(4)

Community development financial institution

section 4702(5) of this titleThe term “community development financial institution” has the same meaning as in .

(5)

Affiliate

section 1841 of this titleThe term “affiliate” has the same meaning as in .

Pub. L. 102–242, title II, § 233Dec. 19, 1991105 Stat. 2311 Pub. L. 102–550, title IX, § 931(c)Oct. 28, 1992106 Stat. 3888 Pub. L. 102–558, title IIIOct. 28, 1992106 Stat. 4224 Pub. L. 103–325, title I, § 114(c)Sept. 23, 1994108 Stat. 2181(, , ; –(e), title XVI, §§ 1604(b)(2), 1605(a)(7), , , 3889, 4083, 4086; , §§ 303(b)(2), (9), 305, , , 4226; , , .)

Editorial Notes

References in Text

Pub. L. 95–557Oct. 31, 197892 Stat. 2115 section 601 of Pub. L. 95–557 section 8101 of Title 42The Neighborhood Reinvestment Corporation Act, referred to in subsec. (a)(4)(C), is title VI of , , , which is classified to subchapter I (§ 8101 et seq.) of chapter 90 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see , set out as a Short Title note under and Tables.

Pub. L. 93–383Aug. 22, 197488 Stat. 633 section 5301 of Title 42The Housing and Community Development Act of 1974, referred to in subsec. (a)(4)(D), is , , . Title I of the Act is classified principally to chapter 69 (§ 5301 et seq.) of Title 42. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Pub. L. 101–625Nov. 28, 1990104 Stat. 4079 section 12701 of Title 42The Cranston-Gonzalez National Affordable Housing Act, referred to in subsec. (a)(4)(E), (F), is , , . Title II of the Act, also known as the “HOME Investment Partnerships Act”, is classified principally to subchapter II (§ 12721 et seq.) of chapter 130 of Title 42. Subtitles B and C of title IV of the Act are classified respectively to parts A (§ 12871 et seq.) and B (§ 12891 et seq.) of subchapter IV of chapter 130 of Title 42. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

act Sept. 1, 1937, ch. 896 Pub. L. 93–383, title II, § 201(a)Aug. 22, 197488 Stat. 653 section 1437 of Title 42The United States Housing Act of 1937, referred to in subsec. (a)(4)(F), is , as revised generally by , , . Title III of the Act is classified generally to subchapter II–A (§ 1437aaa et seq.) of Title 42. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

Pub. L. 102–242Dec. 19, 1991105 Stat. 2308 section 1817 of this title section 1811 of this title section 231 of Pub. L. 102–242 section 1811 of this titleThis subtitle, referred to in subsec. (b)(4)(C), is subtitle C (§§ 231–234) of title II of , , , known as the Bank Enterprise Act of 1991, which enacted this section and sections 1834 and 1834b of this title, amended , and enacted provisions set out as a note under . For complete classification of subtitle C to the Code, see , set out as a Short Title of 1991 Amendment note under and Tables.

Codification

Section was enacted as part of the Bank Enterprise Act of 1991, and also as part of the Foreign Bank Supervision Enhancement Act of 1991 and as part of the Federal Deposit Insurance Corporation Improvement Act of 1991, and not as part of the Federal Deposit Insurance Act which comprises this chapter.

section 233 of Pub. L. 102–242 section 233 of Pub. L. 102–242 section 1817 of this titleSection is comprised of . Subsec. (c) of amended .

Amendments

Pub. L. 103–325, § 114(c)(1)(A)1994—Subsec. (a)(2). , substituted “may apply for” for “shall be eligible” in introductory provisions.

Pub. L. 103–325, § 114(c)(1)(B)Subsec. (a)(2)(A). , substituted “assistance” for “financial assistance”.

Pub. L. 103–325, § 114(c)(1)(C)Subsec. (a)(2)(C). to (E), added subpar. (C).

Pub. L. 103–325, § 114(c)(2)(A)Subsec. (a)(4). , struck out “financial” before “assistance” in introductory provisions.

Pub. L. 103–325, § 114(c)(2)(B)Subsec. (a)(4)(L) to (O). , added subpars. (L) to (O).

Pub. L. 103–325, § 114(c)(3)Subsec. (a)(5). , substituted “paragraph (3)(A)” for “paragraph (3)”.

Pub. L. 103–325, § 114(c)(4)Subsec. (a)(6). , substituted “Loans, financial assistance, and equity investments made by any insured depository institution” for “Investments by any insured depository institution in loans and securities”.

Pub. L. 103–325, § 114(c)(5)Subsec. (a)(7). , added par. (7).

Pub. L. 103–325, § 114(c)(6)Subsec. (g). , added subsec. (g) and redesignated former subsec. (g) as (j).

Pub. L. 103–325, § 114(c)(7)Subsecs. (h), (i). , added subsecs. (h) and (i).

Pub. L. 103–325, § 114(c)(6)(A)Subsec. (j). , redesignated subsec. (g) as (j).

Pub. L. 103–325, § 114(a)(8)Subsec. (j)(4), (5). , added pars. (4) and (5).

Pub. L. 102–558, § 303(b)(9)(A)Pub. L. 102–550, § 1605(a)(7)(A)Oct. 28, 1992Pub. L. 102–558, § 305 section 1815 of this title1992—Subsec. (a)(1)(A). , substituted “section 1817(b)(7)” for “section 1817(d)(4)”. , which contained an identical amendment, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .

Pub. L. 102–550, § 931(c)Subsec. (a)(2). , amended par. (2) generally. Prior to amendment, par. (2) read as follows: “An insured depository institution shall be eligible for any community enterprise assessment credit for any semiannual period for—

“(A) any increase during such period in the amount of new originations of qualified loans and other financial assistance provided for low- and moderate-income persons in distressed communities, or enterprises integrally involved with such neighborhoods, which the Board determines are qualified to be taken into account for purposes of this subsection; and

“(B) any increase during such period in the amount of deposits accepted from persons domiciled in the distressed community, at any office of the institution (including any branch) located in any qualified distressed community, and any increase during such period in the amount of new originations of loans and other financial assistance made within that community, except that in no case shall the credit for increased deposits at any institution or branch exceed the credit for increased loan and other financial assistance by the bank or branch in the distressed community.”

Pub. L. 102–558, § 303(b)(9)(B)Pub. L. 102–550, § 1605(a)(7)(B)Oct. 28, 1992Pub. L. 102–558, § 305 section 1815 of this titleSubsec. (a)(3). , substituted “section 1817(b)(7)” for “section 1817(d)(4)”. , which contained an identical amendment, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .

Pub. L. 102–558, § 303(b)(2)section 1834b of this title Pub. L. 102–550, § 931(d)Pub. L. 102–550, § 1604(b)(2)Oct. 28, 1992Pub. L. 102–558, § 305 section 1815 of this title, which directed technical amendment to reference to to correct reference to corresponding section of original act, could not be executed because of prior general amendment by . See below. , which contained an identical amendment, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .

Pub. L. 102–550, § 931(d)section 1817(d)(4) of this title section 1834b of this title, amended par. (3) generally. Prior to amendment, par. (3) read as follows: “The amount of any community enterprise assessment credit available under for any insured depository institution, or a qualified portion thereof, for any semiannual period shall be the amount which is equal to 5 percent, in the case of an institution which does not meet the community development organization requirements under , and 15 percent, in the case of an institution, or a qualified portion thereof, which meets such requirements (or any percentage designated under paragraph (5)) of the sum of—

“(A) the amounts of assets described in paragraph (2)(A); and

“(B) the amounts of deposits, loans, and other extensions of credit described in paragraph (2)(B).”

Pub. L. 102–558, § 303(b)(2)section 1834b of this title Pub. L. 102–550, § 1604(b)(2)Oct. 28, 1992Pub. L. 102–558, § 305 section 1815 of this titleSubsec. (a)(5). , made technical amendment to reference to to correct reference to corresponding section of original act. , which made identical amendment, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .

Pub. L. 102–550, § 931(e)Subsec. (b)(4). , amended par. (4) generally. Prior to amendment, par. (4) read as follows: “For purposes of this subsection, an area meets the requirements of this paragraph if at least 2 of the following criteria are met:

Income“(A) .—At least 70 percent of the families and unrelated individuals residing in the area have incomes of less than 80 percent of the median income of the area.

Poverty“(B) .—At least 20 percent of the residents residing in the area have incomes which are less than the national poverty level (as determined pursuant to criteria established by the Director of the Office of Management and Budget).

Unemployment“(C) .—The unemployment rate for the area is one and one-half times greater than the national average (as determined by the Bureau of Labor Statistic’s most recent figures).”

Pub. L. 102–558, § 303(b)(9)(C)section 1817(d)(1)(B) of this title Pub. L. 102–550, § 1605(a)(7)(C)Oct. 28, 1992Pub. L. 102–558, § 305 section 1815 of this titleSubsec. (e)(2). , substituted “of the semiannual assessment to which such credit is applicable” for “made for purposes of the notification required under ”. , which contained an identical amendment, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .

Statutory Notes and Related Subsidiaries

Effective Date of 1992 Amendment

section 303(b)(2) of Pub. L. 102–558Mar. 1, 1992section 304 of Pub. L. 102–558 section 4502 of Title 50Amendment by deemed to have become effective , see , set out as a note under , War and National Defense.

Pub. L. 102–558, title III, § 303(b)(9)Oct. 28, 1992106 Stat. 4226 section 302(e)(4) of Pub. L. 102–242 section 302(g) of Pub. L. 102–242 section 1817 of this title, , , provided that the amendment made by that section is effective on the effective date of the amendment made by [see , set out as a note under ].

Pub. L. 102–550, title XVI, § 1605(a)(7)Oct. 28, 1992106 Stat. 4086Oct. 28, 1992section 305 of Pub. L. 102–558 section 1815 of this title, , , which provided effective date provisions for the amendment made by that section, was repealed, effective , by , set out as a Repeal of Duplicative Provisions note under .