H.R. 1066 (110th): Depository Institution Community Development Investments Enhancement Act

110th Congress, 2007–2009. Text as of Feb 28, 2007 (Referred to Senate Committee).

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IIB

110th CONGRESS

1st Session

H. R. 1066

IN THE SENATE OF THE UNITED STATES

February 28, 2007

Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AN ACT

To increase community development investments by depository institutions, and for other purposes.

1.

Short title

This Act may be cited as the Depository Institution Community Development Investments Enhancement Act.

2.

Technical corrections

(a)

National banks

The first sentence of the paragraph designated as the Eleventh of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) (as amended by section 305(a) of the Financial Services Regulatory Relief Act of 2006) is amended by striking promotes the public welfare by benefiting primarily and inserting is designed primarily to promote the public welfare, including the welfare of.

(b)

State member banks

The first sentence of the 23rd undesignated paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 338a) (as amended by section 305(b) of the Financial Services Regulatory Relief Act of 2006) is amended by striking promotes the public welfare by benefiting primarily and inserting is designed primarily to promote the public welfare, including the welfare of.

3.

Investments by Federal savings associations authorized to promote the public welfare

(a)

In general

Section 5(c)(3) of the Home Owners' Loan Act (12 U.S.C. 1464(c)) is amended by adding at the end the following new subparagraph:

(D)

Direct investments to promote the public welfare

(i)

In general

A Federal savings association may make investments, directly or indirectly, each of which is designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families through the provision of housing, services, and jobs.

(ii)

Direct investments or acquisition of interest in other companies

Investments under clause (i) may be made directly or by purchasing interests in an entity primarily engaged in making such investments.

(iii)

Prohibition on unlimited liability

No investment may be made under this subparagraph which would subject a Federal savings association to unlimited liability to any person.

(iv)

Single investment limitation to be established by director

Subject to clauses (v) and (vi), the Director shall establish, by order or regulation, limits on—

(I)

the amount any savings association may invest in any 1 project; and

(II)

the aggregate amount of investment of any savings association under this subparagraph.

(v)

Flexible aggregate investment limitation

The aggregate amount of investments of any savings association under this subparagraph may not exceed an amount equal to the sum of 5 percent of the savings association's capital stock actually paid in and unimpaired and 5 percent of the savings association's unimpaired surplus, unless—

(I)

the Director determines that the savings association is adequately capitalized; and

(II)

the Director determines, by order, that the aggregate amount of investments in a higher amount than the limit under this clause will pose no significant risk to the affected deposit insurance fund.

(vi)

Maximum aggregate investment limitation

Notwithstanding clause (v), the aggregate amount of investments of any savings association under this subparagraph may not exceed an amount equal to the sum of 15 percent of the savings association's capital stock actually paid in and unimpaired and 15 percent of the savings association's unimpaired surplus.

(vii)

Investments not subject to other limitation on quality of investments

No obligation a Federal savings association acquires or retains under this subparagraph shall be taken into account for purposes of the limitation contained in section 28(d) of the Federal Deposit Insurance Act on the acquisition and retention of any corporate debt security not of investment grade.

(viii)

Applicability of standards to each investment

The standards and limitations of this subparagraph shall apply to each investment under this subparagraph made by a savings association directly and by its subsidiaries.

.

(b)

Technical and Conforming Amendments

Section 5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(3)(A)) is amended to read as follows:

(A)

[Repealed]

.

Passed the House of Representatives February 27, 2007.

Lorraine C. Miller,

Clerk.