119-s2718

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2718 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2718

 To amend the Community Development Banking and Financial Institutions 
 Act of 1994 to provide for capitalization assistance to enhance 
 liquidity.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 September 4, 2025

Mr. Warner (for himself, Mr. Crapo, Ms. Smith, Ms. Lummis, Mr. Peters, 
 and Mrs. Hyde-Smith) introduced the following bill; which was read 
 twice and referred to the Committee on Banking, Housing, and Urban 
 Affairs

_______________________________________________________________________

 A BILL

 To amend the Community Development Banking and Financial Institutions 
 Act of 1994 to provide for capitalization assistance to enhance 
 liquidity.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.

    (a) In General.--

Section 113 of the Community Development Banking 
and Financial Institutions Act of 1994 (12 U.S.C. 4712) is amended--

    (1) by striking subsection

    (a) and inserting the following:
 ``

    (a) Assistance.--
 ``

    (1) In general.--The Fund may provide funds to 
 organizations for the purpose of--
 ``
        (A) purchasing loans that are originated by 
 community development financial institutions, loan 
 participations, or interests therein from community 
 development financial institutions;
 ``
        (B) providing guarantees, loan loss reserves, or 
 other forms of credit enhancement to promote liquidity 
 for community development financial institutions; and
 ``
            (C) otherwise enhancing the liquidity of 
 community development financial institutions.
 ``

    (2) Construction of federal government funds.--For 
 purposes of this subsection, notwithstanding 

section 105

    (a)

    (9) of the Housing and Community Development Act of 1974 (42 U.S.C. 
 5305

    (a)

    (9) ), funds provided pursuant to such Act shall be 
 considered to be Federal Government funds.'';

    (2) by striking subsection

    (b) and inserting the following:
 ``

    (b) Selection.--
 ``

    (1) In general.--The selection of organizations to 
 receive assistance and the amount of assistance to be provided 
 to any organization under this section shall be at the 
 discretion of the Fund and in accordance with criteria 
 established by the Fund.
 ``

    (2) Eligibility.--Organizations eligible to receive 
 assistance under this section--
 ``
        (A) shall have a primary purpose of promoting 
 community development; and
 ``
        (B) are not required to be community development 
 financial institutions.
 ``

    (3) Prioritization.--For the purpose of making an award 
 of funds under this section, the Fund shall prioritize the 
 selection of organizations that--
 ``
        (A) demonstrate relevant experience or an ability 
 to carry out the activities under this section, 
 including experience leading or participating in loan 
 purchase structures or purchasing or participating in 
 the purchase of, assigning, or otherwise transferring, 
 assets from community development financial 
 institutions;
 ``
        (B) demonstrate the capacity to increase the 
 number or dollar volume of loan originations or expand 
 the products or services of community development 
 financial institutions, including by leveraging the 
 award with private capital; and
 ``
            (C) will use the funds to support community 
 development financial institutions that represent broad 
 geographic coverage or that serve borrowers that have 
 experienced significant unmet capital or financial 
 services needs.'';

    (3) in subsection
            (c) , in the first sentence--
        (A) by striking ``$5,000,000'' and inserting 
 ``$20,000,000''; and
        (B) by striking ``during any 3-year period''; and

    (4) by adding at the end the following:
 ``

    (g) Regulations.--The Secretary may promulgate such regulations 
as may be necessary or appropriate to carry out the authorities or 
purposes of this section.''.

    (b) Emergency Capital Investment Funds.--

Section 104A of the 
Community Development Banking and Financial Institutions Act of 1994 
(12 U.S.C. 4703a) is amended by striking subsection
            (l) and inserting 
the following:
 ``
            (l) Deposit of Funds.--All funds received by the Secretary in 
connection with purchases made pursuant of this section, including 
interest payments, dividend payments, and proceeds from the sale of any 
financial instrument, shall be deposited into the Fund and used--
 ``

    (1) to provide financial assistance to organizations 
 pursuant to 

section 113; and
 ``

    (2) to provide financial and technical assistance 
 pursuant to 

section 108, except that subsection

    (e) of that 
 section shall be waived.''.
            (c) Annual Reports.--

    (1) === Definitions. ===
-In this subsection, the terms ``community 
 development financial institution'' and ``Fund'' have the 
 meanings given the terms in 

section 103 of the Community 
 Development Banking and Financial Institutions Act of 1994 (12 
 U.S.C. 4702).

    (2) Requirements.--Not later than 1 year after the date on 
 which assistance is first provided under 

section 113 of the 
 Community Development Banking and Financial Institutions Act of 
 1994 (12 U.S.C. 4712) pursuant to the amendments made by 
 subsection

    (a) of this section, and annually thereafter through 
 2028, the Secretary of the Treasury shall submit to Congress a 
 written report describing the use of the Fund for the 1-year 
 period preceding the submission of the report for the purposes 
 described in subsection

    (a)

    (1) of such 

section 113, as amended 
 by subsection

    (a) of this section, which shall include, with 
 respect to the period covered by the report--
        (A) the total amount of--
            (i) loans, loan participations, and 
 interests therein purchased from community 
 development financial institutions;
            (ii) loans that support affordable housing 
 construction; and
            (iii) guarantees, loan loss reserves, and 
 other forms of credit enhancement provided to 
 community development financial institutions;
        (B) the effect of the purchases and guarantees made 
 by the Fund on the overall competitiveness of community 
 development financial institutions; and
            (C) the impact of the purchases and guarantees made 
 by the Fund on the liquidity of community development 
 financial institutions.
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