12 U.S.C. § 4713a — Guarantees for bonds and notes issued

Page 1741 TITLE 12—BANKS AND BANKING § 4713a ministrator 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 [12 U.S.C. 1834a(a)(1), (e)(2)], and any other provision of the Federal Deposit Insurance Act [12 U.S.C. 1811 et seq.] relating to the Bank En- terprise Act of 1991, do not apply to the Ad- ministrator for purposes of this subchapter. (b) Provisions relating to administration of this section (1) New lifeline accounts In applying section 233 of the Bank Enter- prise Act of 1991 [12 U.S.C. 1834a] for purposes of this section, the Administrator shall treat the provision of new lifeline accounts by an in- sured 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 subchapter, section 233(a)(3) of the Bank Enterprise Act of 1991 (12 U.S.C. 1834a(a)(3)) shall be applied by sub- stituting the following text: ‘‘(3) Amount of assessment credit ‘‘The amount of an assessment credit which may be awarded to an insured depository insti- tution to carry out the qualified activities of the institution or of the subsidiaries of the in- stitution 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 institu- tion; or ‘‘(ii) 15 percent of the sum of the amounts determined under such subpara- graph, in the case of an institution which is a community development financial in- stitution; and ‘‘(B) with respect to qualifying activities described in paragraph (2)(C), 15 percent of the amounts determined under such subpara- graph.’’ (3) Adjustment of percentage Section 233(a)(5) of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a(a)(5)] shall be applied for purposes of this section by— (A) substituting ‘‘institutions which are community development financial institu- tions’’ for ‘‘institutions which meet the community development organization re- quirements under section 234 [12 U.S.C. 1834b]’’; and (B) substituting ‘‘institutions which are not community development financial insti- tutions’’ for ‘‘institutions which do not meet such requirements’’. (4) Designation of QDC Section 233(b)(2) of the Bank Enterprise Act of 1991 [12 U.S.C. 1834a(b)(2)] 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 Administra- tor’s discretion, apply section 233 of the Bank Enterprise Act of 1991 for purposes of this sec- tion by providing community enterprise as- sessment credits with respect to annual peri- ods rather than semiannual periods. (6) Outreach The Administrator shall ensure that infor- mation 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 subchapter, section 233(a)(2)(A) of the Bank Enterprise Act of 1991 shall be applied by inserting ‘‘of the increase’’ after ‘‘the amount’’. (Pub. L. 103–325, title I, § 114, Sept. 23, 1994, 108 Stat. 2179.) Editorial Notes REFERENCES IN TEXT The Bank Enterprise Act of 1991, referred to in sub- secs. (a)(2), (5) and (b)(6), is subtitle C (§§ 231–234) of title II of Pub. L. 102–242, Dec. 19, 1991, 105 Stat. 2308–2315, which enacted sections 1834 to 1834b of this title, amended section 1817 of this title, and enacted provi- sions set out as a note under section 1811 of this title. For complete classification of this Act to the Code, see Short Title of 1991 Amendment note set out under sec- tion 1811 of this title and Tables. The Federal Deposit Insurance Act, referred to in subsec. (a)(5), is act Sept. 21, 1950, ch. 967, § 2, 64 Stat. 873, which is classified generally to chapter 16 (§ 1811 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1811 of this title and Tables. CODIFICATION Section is comprised of section 114 of Pub. L. 103–325. Subsec. (c) of section 114 of Pub. L. 103–325 amended section 1834a of this title. § 4713a. Guarantees for bonds and notes issued for community or economic development purposes (a) Definitions In this section, the following definitions shall apply: (1) Eligible community development financial institution The term ‘‘eligible community development financial institution’’ means a community de- velopment financial institution (as described in section 1805.201 of title 12, Code of Federal Regulations, or any successor thereto) cer- tified by the Secretary that has applied to a qualified issuer for, or been granted by a quali- fied issuer, a loan under the Program. (2) Eligible community or economic develop- ment purpose The term ‘‘eligible community or economic development purpose’’— (A) means any purpose described in section 4707(b) of this title; and (B) includes the provision of community or economic development in low-income or un- derserved rural areas. Page 1742 TITLE 12—BANKS AND BANKING § 4713a (3) Guarantee The term ‘‘guarantee’’ means a written agreement between the Secretary and a quali- fied issuer (or trustee), pursuant to which the Secretary ensures repayment of the verifiable losses of principal, interest, and call premium, if any, on notes or bonds issued by a qualified issuer to finance or refinance loans to eligible community development financial institu- tions. (4) Loan The term ‘‘loan’’ means any credit instru- ment that is extended under the Program for any eligible community or economic develop- ment purpose. (5) Master servicer (A) In general The term ‘‘master servicer’’ means any en- tity approved by the Secretary in accord- ance with subparagraph (B) to oversee the activities of servicers, as provided in sub- section (f)(4). (B) Approval criteria for master servicers The Secretary shall approve or deny any application to become a master servicer under the Program not later than 90 days after the date on which all required informa- tion is submitted to the Secretary, based on the capacity and experience of the applicant in— (i) loan administration, servicing, and loan monitoring; (ii) managing regional or national loan intake, processing, or servicing oper- ational systems and infrastructure; (iii) managing regional or national origi- nator communication systems and infra- structure; (iv) developing and implementing train- ing and other risk management strategies on a regional or national basis; and (v) compliance monitoring, investor rela- tions, and reporting. (6) Program The term ‘‘Program’’ means the guarantee Program for bonds and notes issued for eligi- ble community or economic development pur- poses established under this section. (7) Program administrator The term ‘‘Program administrator’’ means an entity designated by the issuer to perform administrative duties, as provided in sub- section (f)(2). (8) Qualified issuer (A) In general The term ‘‘qualified issuer’’ means a com- munity development financial institution (or any entity designated to issue notes or bonds on behalf of such community develop- ment financial institution) that meets the qualification requirements of this para- graph. (B) Approval criteria for qualified issuers (i) In general The Secretary shall approve a qualified issuer for a guarantee under the Program in accordance with the requirements of this paragraph, and such additional re- quirements as the Secretary may estab- lish, by regulation. (ii) Terms and qualifications A qualified issuer shall— (I) have appropriate expertise, capac- ity, and experience, or otherwise be qualified to make loans for eligible com- munity or economic development pur- poses; (II) provide to the Secretary— (aa) an acceptable statement of the proposed sources and uses of the funds; and (bb) a capital distribution plan that meets the requirements of subsection (c)(1); and (III) certify to the Secretary that the bonds or notes to be guaranteed are to be used for eligible community or economic development purposes. (C) Department opinion; timing (i) Department opinion Not later than 30 days after the date of a request by a qualified issuer for approval of a guarantee under the Program, the Secretary shall provide an opinion regard- ing compliance by the issuer with the re- quirements of the Program under this sec- tion. (ii) Timing The Secretary shall approve or deny a guarantee under this section after consid- eration of the opinion provided to the Sec- retary under clause (i), and in no case later than 90 days after receipt of all required information by the Secretary with respect to a request for such guarantee. (9) Secretary The term ‘‘Secretary’’ means the Secretary of the Treasury. (10) Servicer The term ‘‘servicer’’ means an entity des- ignated by the issuer to perform various serv- icing duties, as provided in subsection (f)(3). (b) Guarantees authorized The Secretary shall guarantee payments on bonds or notes issued by any qualified issuer, if the proceeds of the bonds or notes are used in accordance with this section to make loans to eligible community development financial insti- tutions— (1) for eligible community or economic de- velopment purposes; or (2) to refinance loans or notes issued for such purposes. (c) General program requirements (1) In general A capital distribution plan meets the re- quirements of this subsection, if not less than 90 percent of the principal amount of guaran- teed bonds or notes (other than costs of issuance fees) are used to make loans for any eligible community or economic development Page 1743 TITLE 12—BANKS AND BANKING § 4713a purpose, measured annually, beginning at the end of the 1-year period beginning on the issuance date of such guaranteed bonds or notes. (2) Relending account Not more than 10 percent of the principal amount of guaranteed bonds or notes, multi- plied by an amount equal to the outstanding principal balance of issued notes or bonds, minus the risk-share pool amount under sub- section (d), may be held in a relending account and may be made available for new eligible community or economic development pur- poses. (3) Limitations on unpaid principal balances The proceeds of guaranteed bonds or notes under the Program may not be used to pay fees (other than costs of issuance fees), and shall be held in— (A) community or economic development loans; (B) a relending account, to the extent au- thorized under paragraph (2); or (C) a risk-share pool established under sub- section (d). (4) Repayment If a qualified issuer fails to meet the require- ments of paragraph (1) by the end of the 90-day period beginning at the end of the annual measurement period, repayment shall be made on that portion of bonds or notes necessary to bring the bonds or notes that remain out- standing after such repayment into compli- ance with the 90 percent requirement of para- graph (1). (5) Prohibited uses The Secretary shall, by regulation— (A) prohibit, as appropriate, certain uses of amounts from the guarantee of a bond or note under the Program, including the use of such funds for political activities, lobbying, outreach, counseling services, or travel ex- penses; and (B) provide that the guarantee of a bond or note under the Program may not be used for salaries or other administrative costs of— (i) the qualified issuer; or (ii) any recipient of amounts from the guarantee of a bond or note. (d) Risk-share pool Each qualified issuer shall, during the term of a guarantee provided under the Program, estab- lish a risk-share pool, capitalized by contribu- tions from eligible community development fi- nancial institution participants an amount equal to 3 percent of the guaranteed amount outstanding on the subject notes and bonds. (e) Guarantees (1) In general A guarantee issued under the Program shall— (A) be for the full amount of a bond or note, including the amount of principal, in- terest, and call premiums; (B) be fully assignable and transferable to the capital market, on terms and conditions that are consistent with comparable Govern- ment-guaranteed bonds, and satisfactory to the Secretary; (C) represent the full faith and credit of the United States; and (D) not exceed 30 years. (2) Limitations (A) Annual number of guarantees The Secretary shall issue not more than 10 guarantees in any calendar year under the Program. (B) Guarantee amount The Secretary may not guarantee any amount under the Program equal to less than $100,000,000, but the total of all such guarantees in any fiscal year may not ex- ceed $1,000,000,000. (f) Servicing of transactions (1) In general To maximize efficiencies and minimize cost and interest rates, loans made under this sec- tion may be serviced by qualified Program ad- ministrators, bond servicers, and a master servicer. (2) Duties of Program administrator The duties of a Program administrator shall include— (A) approving and qualifying eligible com- munity development financial institution applications for participation in the Pro- gram; (B) compliance monitoring; (C) bond packaging in connection with the Program; and (D) all other duties and related services that are customarily expected of a Program administrator. (3) Duties of servicer The duties of a servicer shall include— (A) billing and collecting loan payments; (B) initiating collection activities on past- due loans; (C) transferring loan payments to the mas- ter servicing accounts; (D) loan administration and servicing; (E) systematic and timely reporting of loan performance through remittance and servicing reports; (F) proper measurement of annual out- standing loan requirements; and (G) all other duties and related services that are customarily expected of servicers. (4) Duties of master servicer The duties of a master servicer shall in- clude— (A) tracking the movement of funds be- tween the accounts of the master servicer and any other servicer; (B) ensuring orderly receipt of the month- ly remittance and servicing reports of the servicer; (C) monitoring the collection comments and foreclosure actions; (D) aggregating the reporting and distribu- tion of funds to trustees and investors; (E) removing and replacing a servicer, as necessary; Page 1744 TITLE 12—BANKS AND BANKING § 4714 1 See Termination of Section note below. (F) loan administration and servicing; (G) systematic and timely reporting of loan performance compiled from all bond servicers’ reports; (H) proper distribution of funds to inves- tors; and (I) all other duties and related services that are customarily expected of a master servicer. (g) Fees (1) In general A qualified issuer that receives a guarantee issued under this section on a bond or note shall pay a fee to the Secretary, in an amount equal to 10 basis points of the amount of the unpaid principal of the bond or note guaran- teed. (2) Payment A qualified issuer shall pay the fee required under this subsection on an annual basis. (3) Use of fees Fees collected by the Secretary under this subsection shall be used to reimburse the De- partment of the Treasury for any administra- tive costs incurred by the Department in im- plementing the Program established under this section. (h) Authorization of appropriations (1) In general There are authorized to be appropriated to the Secretary, such sums as are necessary to carry out this section. (2) Use of fees To the extent that the amount of funds ap- propriated for a fiscal year under paragraph (1) are not sufficient to carry out this section, the Secretary may use the fees collected under subsection (g) for the cost of providing guaran- tees of bonds and notes under this section. (i) Investment in guaranteed bonds ineligible for Community Reinvestment Act purposes Notwithstanding any other provision of law, any investment by a financial institution in bonds or notes guaranteed under the Program shall not be taken into account in assessing the record of such institution for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 [et seq.]). (j) Administration (1) Regulations Not later than 1 year after September 27, 2010, the Secretary shall promulgate regula- tions to carry out this section. (2) Implementation Not later than 2 years after September 27, 2010, the Secretary shall implement this sec- tion. (k) Termination This section is repealed, and the authority provided under this section shall terminate, on September 30, 2014.1 (Pub. L. 103–325, title I, § 114A, as added Pub. L. 111–240, title I, § 1134, Sept. 27, 2010, 124 Stat. 2515.) TERMINATION OF SECTION For delay of termination of section by Pub. L. 118–47, see Termination Date note below. Editorial Notes REFERENCES IN TEXT The Community Reinvestment Act of 1977, referred to in subsec. (i), is title VIII of Pub. L. 95–128, Oct. 12, 1977, 91 Stat. 1147, which is classified generally to chapter 30 (§ 2901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 2901 of this title and Tables. Statutory Notes and Related Subsidiaries TERMINATION DATE Pub. L. 118–47, div. B, title I, Mar. 23, 2024, 138 Stat. 525, provided in part: ‘‘That such section 114A [this sec- tion] shall remain in effect until December 31, 2025’’. Additional provisions delaying the termination of this section were contained in the following prior ap- propriation acts: Pub. L. 117–328, div. E, title I, Dec. 29, 2022, 136 Stat. 4655. Pub. L. 117–103, div. E, title I, Mar. 15, 2022, 136 Stat. 244. Pub. L. 116–260, div. E, title I, Dec. 27, 2020, 134 Stat. 1385. Pub. L. 116–93, div. C, title I, Dec. 20, 2019, 133 Stat. 2439. Pub. L. 116–6, div. D, title I, Feb. 15, 2019, 133 Stat. 143. Pub. L. 115–141, div. E, title I, Mar. 23, 2018, 132 Stat. 540. Pub. L. 115–31, div. E, title I, May 5, 2017, 131 Stat. 331. Pub. L. 114–113, div. E, title I, Dec. 18, 2015, 129 Stat. 2427. Pub. L. 113–235, div. E, title I, Dec. 16, 2014, 128 Stat. 2336. § 4714. Recordkeeping (a) In general A community development financial institu- tion receiving assistance from the Fund shall keep such records, for such periods as may be prescribed by the Fund and necessary to disclose the manner in which any assistance under this subchapter is used and to demonstrate compli- ance with the requirements of this subchapter. (b) User profile information The Fund shall require each community devel- opment financial institution or other organiza- tion receiving assistance from the Fund to com- pile such data, as is determined to be appro- priate by the Fund, on the gender, race, eth- nicity, national origin, or other pertinent infor- mation concerning individuals that utilize the services of the assisted institution to ensure that targeted populations and low-income resi- dents of investment areas are adequately served. (c) Access to records The Fund shall have access on demand, for the purpose of determining compliance with this subchapter, to any records of a community de- velopment financial institution or other organi- zation that receives assistance from the Fund. (d) Review Not less than annually, the Fund shall review the progress of each assisted community devel- opment financial institution in carrying out its strategic plan, meeting its performance goals,