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This section requires the Secretary of the Treasury (or designee) to annually testify, at the discretion of the chairmen of the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services, before those committees (or subcommittees) regarding operations of the Community Development Financial Institutions Fund (CDFI Fund)—a wholly owned government corporation that provides financial and technical assistance to institutions serving low-income and underserved communities—during the previous fiscal year.
This section amends the CDFI Bond Guarantee Program (i.e., authorizes the Secretary of the Treasury to guarantee bonds and notes issued by community development financial institutions for eligible community and economic development activities), which supports the mission of the Community Development Financial Institutions Fund to promote investment in underserved populations and distressed communities. Specifically, it (1) inserts "outstanding" before "principal amount" and strikes certain formulaic language in subsection (c)(2); (2) revises subsection (e)(2) to limit guarantees to not less than $25 million per guarantee, with a total not to exceed $1 billion in any fiscal year; (3) extends the program's authority through the later of four years after enactment or December 31, 2030 (from September 30, 2014); and makes a clerical amendment to the table of contents. The section also expresses the sense of Congress on the program's benefits and requires the Secretary of the Treasury to report to specified congressional committees within three years of enactment on the program's effectiveness.
This section revises the Community Development Financial Institutions (CDFI) Fund's capitalization assistance program (sec. 113 of the Community Development Banking and Financial Institutions Act of 1994) to authorize the Fund to provide assistance to organizations—including those that are not CDFIs—for (1) purchasing loans, loan participations, or interests therein originated by CDFIs; (2) providing guarantees, loan loss reserves, or other credit enhancements; and (3) otherwise enhancing CDFI liquidity. (As background, the CDFI Fund supports CDFIs, which have a primary mission of promoting community development by serving investment areas or targeted populations such as low-income communities through equity investments, loans, and development services.) Eligible organizations must have a primary community development purpose; the Fund must prioritize those with relevant experience in loan purchases or transfers, capacity to expand CDFI originations or products using private capital leverage, and focus on geographically diverse or high-need CDFIs; and the maximum assistance per organization increases to $20 million (from $5 million) without regard to any 3-year period. This section further directs the Secretary of the Treasury to issue implementing regulations; redirects all funds received from the Emergency Capital Investment Program—including interest, dividends, and sales proceeds—to the CDFI Fund for capitalization assistance under sec. 113 and technical assistance under sec. 108 (waiving restrictions in sec. 108(e)); and requires annual reports to Congress beginning one year after assistance is first provided, detailing amounts of purchases, credit enhancements, and affordable housing loans supported, plus effects on CDFI competitiveness and liquidity.
This section establishes a set-aside in the Rural Housing Section 502 direct loan program (i.e., subsidized loans to low- and very-low-income households in eligible rural areas for home purchase, construction, or improvement) for Native community development financial institutions (Native CDFIs, defined as Treasury-certified community development financial institutions that are at least 51% owned or controlled by, and direct at least 51% of activities to serving, Indian Tribes, Alaska Native communities, or Native Hawaiian communities). (Of amounts appropriated annually for section 502 direct loans, the Secretary of Agriculture may use up to $50 million to make direct loans to Native CDFIs, which must (1) match 20% of loan proceeds (waived for amounts reloaned on priority Tribal lands, i.e., reservations, trust lands, Hawaiian Home Lands, Alaska Native regions, and certain other designated areas); (2) relend only to otherwise-eligible section 502 borrowers who are members of, or in households including members of, those communities, with priority for those on priority Tribal lands; and (3) demonstrate capacity to originate and service single-family home loans.) Native CDFIs must submit annual reports to the Secretary detailing outreach, leveraging of capital, loan applications and approvals, average loan sizes, and loans on or off Tribal/priority lands. The Secretary must submit annual reports to specified congressional committees beginning one year after enactment.