12 U.S.C. § 4742 — Definitions

Page 1754 TITLE 12—BANKS AND BANKING § 4742 of the information used to verify the person’s iden- tity, and determine whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency. ‘‘(2) LOAN RECIPIENTS.—With respect to funds re- ceived by an eligible institution under the Program, any business receiving a loan from the eligible insti- tution using such funds after the date of the enact- ment of this Act [Sept. 27, 2010] shall certify to such eligible institution that the principals of such busi- ness have not been convicted of a sex offense against a minor (as such terms are defined in section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911) [now 34 U.S.C. 20911]). ‘‘(d) PROHIBITION ON PORNOGRAPHY.—None of the funds made available under this subtitle may be used to pay the salary of any individual engaged in activities related to the Program who has been officially dis- ciplined for violations of subpart G of the Standards of Ethical Conduct for Employees of the Executive Branch for viewing, downloading, or exchanging por- nography, including child pornography, on a Federal Government computer or while performing official Fed- eral Government duties. ‘‘SEC. 4108. CREDIT REFORM; FUNDING. ‘‘(a) CREDIT REFORM.—The cost of purchases of pre- ferred stock and other financial instruments made as capital investments under this subtitle shall be deter- mined as provided under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). ‘‘(b) FUNDS MADE AVAILABLE.—There are hereby ap- propriated, out of funds in the Treasury not otherwise appropriated, such sums as may be necessary to pay the costs of $30,000,000,000 of capital investments in eli- gible institutions, including the costs of modifying such investments, and reasonable costs of admin- istering the program of making, holding, managing, and selling the capital investments. ‘‘SEC. 4109. TERMINATION AND CONTINUATION OF AUTHORITIES. ‘‘(a) TERMINATION OF INVESTMENT AUTHORITY.—The authority to make capital investments in eligible insti- tutions, including commitments to purchase preferred stock or other instruments, provided under this sub- title shall terminate 1 year after the date of enactment of this Act [Sept. 27, 2010]. ‘‘(b) CONTINUATION OF OTHER AUTHORITIES.—The au- thorities of the Secretary under section 4104 shall not be limited by the termination date in subsection (a). ‘‘SEC. 4110. PRESERVATION OF AUTHORITY. ‘‘Nothing in this subtitle may be construed to limit the authority of the Secretary under any other provi- sion of law. ‘‘SEC. 4111. ASSURANCES. ‘‘(a) SMALL BUSINESS LENDING FUND SEPARATE FROM TARP.—The Small Business Lending Fund Program is established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008 [div. A of Pub. L. 110–343, see Short Title note set out under section 5201 of this title]. An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Trou- bled Asset Relief Program. ‘‘(b) CHANGE IN LAW.—If, after a capital investment has been made in an eligible institution under the Pro- gram, there is a change in law that modifies the terms of the investment or program in a materially adverse respect for the eligible institution, the eligible institu- tion may, after consultation with the appropriate Fed- eral banking agency for the eligible institution, repay the investment without impediment. ‘‘SEC. 4112. STUDY AND REPORT WITH RESPECT TO WOMEN-OWNED, VETERAN-OWNED, AND MI- NORITY-OWNED BUSINESSES. ‘‘(a) STUDY.—The Secretary shall conduct a study of the impact of the Program on women-owned businesses, veteran-owned businesses, and minority-owned busi- nesses. ‘‘(b) REPORT.—Not later than one year after the date of enactment of this Act [Sept. 27, 2010], the Secretary shall submit to Congress a report on the results of the study conducted pursuant to subsection (a). To the ex- tent possible, the Secretary shall disaggregate the re- sults of such study by ethnic group and gender. ‘‘(c) INFORMATION PROVIDED TO THE SECRETARY.—Eli- gible institutions that participate in the Program shall provide the Secretary with such information as the Secretary may require to carry out the study required by this section. ‘‘SEC. 4113. SENSE OF CONGRESS. ‘‘It is the sense of Congress that the Federal Deposit Insurance Corporation and other bank regulators are sending mixed messages to banks regarding regulatory capital requirements and lending standards, which is a contributing cause of decreased small business lending and increased regulatory uncertainty at community banks.’’ § 4742. Definitions For purposes of this subchapter— (1) the term ‘‘Fund’’ means the Community Development Financial Institutions Fund es- tablished under section 4703 of this title; (2) the term ‘‘appropriate Federal banking agency’’— (A) has the same meaning as in section 1813 of this title; and (B) includes the National Credit Union Ad- ministration Board in the case of any credit union the deposits of which are insured in accordance with the Federal Credit Union Act [12 U.S.C. 1751 et seq.]; (3) the term ‘‘early loan’’ means a loan en- rolled at a time when the aggregate covered amount of loans previously enrolled under the Program by a particular participating finan- cial institution is less than $5,000,000; (4) the term ‘‘enrolled loan’’ means a loan made by a participating financial institution that is enrolled by a participating State in ac- cordance with this subchapter; (5) the term ‘‘financial institution’’ means any federally chartered or State-chartered commercial bank, savings association, savings bank, or credit union; (6) the term ‘‘participating financial institu- tion’’ means any financial institution that has entered into a participation agreement with a participating State in accordance with section 4744 of this title; (7) the term ‘‘participating State’’ means any State that has been approved for partici- pation in the Program in accordance with sec- tion 4743 of this title; (8) the term ‘‘passive real estate ownership’’ means ownership of real estate for the purpose of deriving income from speculation, trade, or rental, except that such term shall not in- clude— (A) the ownership of that portion of real estate being used or intended to be used for the operation of the business of the owner of the real estate (other than the business of passive ownership of real estate); or (B) the ownership of real estate for the purpose of construction or renovation, until the completion of the construction or ren- ovation phase; Page 1755 TITLE 12—BANKS AND BANKING § 4743 1 So in original. Probably should be capitalized. 1 See References in Text note below. 2 So in original. Probably should be capitalized. (9) the term ‘‘Program’’ means the Small Business Capital Enhancement Program estab- lished under this subchapter; (10) the term ‘‘reserve fund’’ means a fund, established by a participating State, ear- marked for a particular participating financial institution, for the purposes of— (A) depositing all required premium charges paid by the participating financial institution and by each borrower receiving a loan under the Program from a participating financial institution; (B) depositing contributions made by the participating State; and (C) covering losses on enrolled loans by disbursing accumulated funds; and (11) the term ‘‘State’’ means— (A) a State of the United States; (B) the District of Columbia; (C) any political subdivision of a State of the United States, which subdivision has a population in excess of the population of the least populated State of the United States; and (D) any other political subdivision of a State of the United States that the Fund de- termines has the capacity to participate in the program.1 (Pub. L. 103–325, title II, § 252, Sept. 23, 1994, 108 Stat. 2204.) Editorial Notes REFERENCES IN TEXT The Federal Credit Union Act, referred to in par. (2)(B), is act June 26, 1934, ch. 750, 48 Stat. 1216, which is classified generally to chapter 14 (§ 1751 et seq.) of this title. For complete classification of this Act to the Code, see section 1751 of this title and Tables. § 4743. Approving States for participation (a) Application Any State may apply to the Fund for approval to be a participating State under the Program and to be eligible for reimbursement by the Fund pursuant to section 4747 of this title. (b) Approval criteria The Fund shall approve a State to be a partici- pating State, if— (1) a specific department or agency of the State has been designated to implement the Program; (2) all legal actions necessary to enable such designated department or agency to imple- ment the Program have been accomplished; (3) funds in the amount of at least $1 for every 2 people residing in the State (as of the last decennial census for which data have been released) are available and have been legally committed to contributions by the State to reserve funds, with such funds being available without time limit and without requiring ad- ditional legal action, except that such require- ments shall not be construed to limit the au- thority of the State to take action at a later time that results in the termination of its ob- ligation to enroll loans and make contribu- tions to reserve funds; (4) the State has prescribed a form of par- ticipation agreement to be entered into be- tween it and each participating financial insti- tution that is consistent with the require- ments and purposes of this subchapter; and (5) the State and the Fund have executed a reimbursement agreement that conforms to the requirements of this subchapter. (c) Existing State programs (1) In general A State that is not a participating State, but that has its own capital access program providing portfolio insurance for business loans (based on a separate loss reserve fund for each financial institution), may apply at any time to the Fund to be approved to be a par- ticipating State. The Fund shall approve such State to be a participating State, and to be el- igible for reimbursements by the Fund pursu- ant to section 4747 of this title, if the State— (A) satisfies the requirements of sub- sections (a) and (b); and (B) certifies that each affected financial institution has satisfied the requirements of section 4744 of this title. (2) Applicable terms of participation (A) Status of institutions If a State is approved for participation under paragraph (1), each financial institu- tion with a participation agreement in effect with the participating State shall imme- diately be considered a participating finan- cial institution. Reimbursements may be made under section 4747 1 of this title in con- nection with all contributions made to the reserve fund by the State in connection with lending that occurs on or after the date on which the Fund approves the State for par- ticipation. (B) Effective date of participation If an amended participation agreement that conforms with section 4745 of this title is required in order to secure participation approval by the Fund, contributions subject to reimbursement under section 4747 of this title shall include only those contributions made to a reserve fund with respect to loans enrolled on or after the date that an amend- ed participation agreement between the par- ticipating State and the participating finan- cial institution becomes effective. (C) Use of accumulated reserve funds A State that is approved for participation in accordance with this subsection may con- tinue to implement the program 2 utilizing the reserve funds accumulated under the State program. (d) Prior appropriations requirement The Fund shall not approve a State for par- ticipation in the Program until at least $50,000,000 has been appropriated to the Fund (subject to an appropriations Act), without fis- cal year limitation, for the purpose of making reimbursements pursuant to section 4747 of this title and otherwise carrying out this subchapter.