Congressional Record, House, September 21, 2020 — Ensuring Diversity in Community Banking Act
Summary
A page of the Congressional Record, House, dated September 21, 2020, beginning at page H4597, in a long document. Ms. Jackson Lee urges passage of the CROWN Act and tells of two students in a Texas school district who were suspended over their dreadlocks, and the House then suspends the rules and passes H.R. 5309 as amended. Under the heading Ensuring Diversity in Community Banking Act of 2019, Ms. Fudge and Mr. Sherman move to suspend the rules and pass the bill, and the text describes the Community Development Financial Institutions Fund and its Bank Enterprise Award Program. The page ends with provisions on credit ratings in Federal Reserve emergency lending facilities.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Congressional Record, House, September 21, 2020 — Ensuring Diversity in Community Banking Act.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crec-crec-2020-09-21-crec-2020-09-21-pt1-pgh4597-2-a479af7dac/
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September 21, 2020 CONGRESSIONAL RECORD — HOUSE H4597
Mr. Speaker, I just want to put into I urge my colleagues to vote in favor agency of the Department of the Treasury,
the RECORD the plight of two students of the CROWN Act. and was established by the Riegle Commu-
in the Barbers Hill Independent School The SPEAKER pro tempore. The nity Development and Regulatory Improve-
District in my State where these two ment Act of 1994. The mission of the CDFI
question is on the motion offered by
Fund is ‘‘to expand economic opportunity for
outstanding students, athletes, good the gentlewoman from Texas (Ms. underserved people and communities by sup-
academic students, were humiliated be- JACKSON LEE) that the House suspend porting the growth and capacity of a na-
cause their tradition was to wear the rules and pass the bill, H.R. 5309, as tional network of community development
dreadlocks, and they were suspended. amended. lenders, investors, and financial service pro-
And one or maybe two of them were The question was taken; and (two- viders’’. A community development financial
not able to walk with their class. Hu- thirds being in the affirmative) the institution (a ‘‘CDFI’’) is a specialized finan-
miliation. Discrimination that never rules were suspended and the bill, as cial institution serving low-income commu-
got corrected. So today, for them we amended, was passed. nities and a Community Development Entity
correct it. DeAndre Arnold, we correct A motion to reconsider was laid on (a ‘‘CDE’’) is a domestic corporation or part-
it. We acknowledge that you deserve nership that is an intermediary vehicle for
the table. the provision of loans, investments, or finan-
your civil rights. f cial counseling in low-income communities.
Mr. Speaker, I urge the House to pass The CDFI Fund certifies CDFIs and CDEs.
H.R. 5309, and I yield back the balance MESSAGE FROM THE PRESIDENT
Becoming a certified CDFI or CDE allows or-
of my time. A message in writing from the Presi- ganizations to participate in various CDFI
GENERAL LEAVE dent of the United States was commu- Fund programs as follows:
Ms. JACKSON LEE. Mr. Speaker, I nicated to the House by Ms. Wanda (A) The Bank Enterprise Award Program,
ask unanimous consent that all Mem- Neiman, one of his secretaries. which provides FDIC-insured depository in-
bers may have 5 legislative days to re- stitutions awards for a demonstrated in-
f
vise and extend their remarks. crease in lending and investments in dis-
The SPEAKER pro tempore. Is there b 1600 tressed communities and CDFIs.
(B) The CDFI Program, which provides Fi-
objection to the request of the gentle- ENSURING DIVERSITY IN nancial and Technical Assistance awards to
woman from Texas? COMMUNITY BANKING ACT OF 2019 CDFIs to reinvest in the CDFI, and to build
There was no objection. the capacity of the CDFI, including financ-
Ms. FUDGE. Mr. Speaker, I rise Mr. SHERMAN. Mr. Speaker, I move
to suspend the rules and pass the bill ing product development and loan loss re-
today in support of H.R. 5309, the Cre- serves.
ating a Respectful and Open World for (H.R. 5322) to establish or modify re-
(C) The Native American CDFI Assistance
Natural Hair Act—also known as the quirements relating to minority depos- Program, which provides CDFIs and spon-
C.R.O.W.N. Act. itory institutions, community develop- soring entities Financial and Technical As-
Too often African Americans are re- ment financial institutions, and impact sistance awards to increase lending and grow
quired to meet unreasonable standards banks, and for other purposes, as the number of CDFIs owned by Native Amer-
of grooming in the workplace and in amended. icans to help build capacity of such CDFIs.
The Clerk read the title of the bill. (D) The New Market Tax Credit Program,
the classroom with respect to our hair.
The text of the bill is as follows: which provides tax credits for making equity
Most of those standards are cultural investments in CDEs that stimulate capital
norms that coincide with the texture H.R. 5322
investments in low-income communities.
and style of Black hair. Be it enacted by the Senate and House of Rep- (E) The Capital Magnet Fund, which pro-
In 2014, my Congressional Black Cau- resentatives of the United States of America in vides awards to CDFIs and nonprofit afford-
cus colleagues and I successfully Congress assembled, able housing organizations to finance afford-
pushed the U.S. military to reverse its SECTION 1. SHORT TITLE; TABLE OF CONTENTS. able housing solutions and related economic
rules classifying hairstyles often worn (a) SHORT TITLE.—This Act may be cited as development activities.
by female soldiers of color as ‘‘unau- the ‘‘Ensuring Diversity in Community (F) The Bond Guarantee Program, a source
thorized’’. The military’s regulation Banking Act’’. of long-term, patient capital for CDFIs to ex-
(b) TABLE OF CONTENTS.—The table of con- pand lending and investment capacity for
used words like ‘‘unkempt’’ and ‘‘mat- tents for this Act is as follows: community and economic development pur-
ted’’ when referring to traditional Afri- poses.
Sec. 1. Short title; table of contents.
can American hairstyles. Sec. 2. Sense of Congress on funding the (2) The Department of the Treasury is au-
To require anyone to change their loan-loss reserve fund for small thorized to create multi-year grant programs
natural appearance to further their ca- dollar loans. designed to encourage low-to-moderate in-
reer or education is a clear violation of Sec. 3. Definitions. come individuals to establish accounts at
their civil rights. Sec. 4. Inclusion of women’s banks in the federally insured banks, and to improve low-
A 2019 study by Dove found Black definition of minority deposi- to-moderate income individuals’ access to
women are 30 percent more likely to tory institution. such accounts on reasonable terms.
receive a formal grooming policy in the Sec. 5. Establishment of impact bank des- (3) Under this authority, grants to partici-
ignation. pants in CDFI Fund programs may be used
workplace. Black women are also 1.5 for loan-loss reserves and to establish small-
Sec. 6. Minority Depositories Advisory Com-
times more likely to report being dollar loan programs by subsidizing related
mittees.
forced to leave work or know of a Sec. 7. Federal deposits in minority deposi- losses. These grants also allow for the pro-
Black woman who was forced to leave tory institutions. viding recipients with the financial coun-
work because of her hair. Sec. 8. Minority Bank Deposit Program. seling and education necessary to conduct
This is unacceptable. Sec. 9. Diversity report and best practices. transactions and manage their accounts.
Seven states agree, including Cali- Sec. 10. Investments in minority depository These loans provide low-cost alternatives to
fornia, New York, New Jersey, Vir- institutions and impact banks. payday loans and other nontraditional forms
ginia, Colorado, Washington, and Sec. 11. Report on covered mentor-protege of financing that often impose excessive in-
programs. terest rates and fees on borrowers, and lead
Maryland. All have enacted laws ban-
Sec. 12. Custodial deposit program for cov- millions of Americans to fall into debt traps.
ning racial hair discrimination. It is Small-dollar loans can only be made pursu-
ered minority depository insti-
past time we ban the practice at the tutions and impact banks. ant to terms, conditions, and practices that
federal level. Sec. 13. Streamlined community develop- are reasonable for the individual consumer
The CROWN Act does that—by feder- ment financial institution ap- obtaining the loan.
ally prohibiting discrimination based plications and reporting. (4) Program participation is restricted to
on hair styles and hair textures com- Sec. 14. Task force on lending to small busi- eligible institutions, which are limited to or-
monly associated with a particular ness concerns. ganizations listed in section 501(c)(3) of the
race or national origin. Sec. 15. Discretionary surplus funds. Internal Revenue Code and exempt from tax
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I was proud to introduce this bill Sec. 16. Determination of Budgetary Effects. under 501(a) of such Code, federally insured
SEC. 2. SENSE OF CONGRESS ON FUNDING THE depository institutions, community develop-
with my friend Congressman RICH-
LOAN-LOSS RESERVE FUND FOR ment financial institutions and State, local,
MOND, which ensures African Ameri- SMALL DOLLAR LOANS. or Tribal government entities.
cans no longer have to be afraid to The sense of Congress is the following: (5) Since its founding, the CDFI Fund has
show up to work or the classroom as (1) The Community Development Financial awarded over $3,300,000,000 to CDFIs and
anything other than who they are. Institutions Fund (the ‘‘CDFI Fund’’) is an CDEs, allocated $54,000,000,000 in tax credits,
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H4598 CONGRESSIONAL RECORD — HOUSE September 21, 2020
and $1,510,000,000 in bond guarantees. Accord- (e) REMOVAL OF DESIGNATION.—If the ap- (A) notify the Committee on Financial
ing to the CDFI Fund, some programs at- propriate Federal banking agency deter- Services of the House of Representatives and
tract as much as $10 in private capital for mines that a depository institution des- the Committee on Banking, Housing, and
every $1 invested by the CDFI Fund. The Ad- ignated as an impact bank no longer meets Urban Affairs of the Senate in advance of
ministration and the Congress should the criteria for such designation, the appro- each meeting of the Minority Depositories
prioritize appropriation of funds for the loan priate Federal banking agency shall rescind Advisory Committee; and
loss reserve fund and technical assistance the designation and notify the depository in- (B) invite the attendance at each meeting
programs administered by the Community stitution of such rescission. of the Minority Depositories Advisory Com-
Development Financial Institution Fund. (f) RECONSIDERATION OF DESIGNATION; AP- mittee of—
PEALS.—Under such procedures as the Fed- (i) one member of the majority party and
SEC. 3. DEFINITIONS.
eral banking agencies may establish, a de- one member of the minority party of the
In this Act:
pository institution may— Committee on Financial Services of the
(1) COMMUNITY DEVELOPMENT FINANCIAL IN- (1) submit to the appropriate Federal bank-
STITUTION.—The term ‘‘community develop-
House of Representatives and the Committee
ing agency a request to reconsider a deter- on Banking, Housing, and Urban Affairs of
ment financial institution’’ has the meaning
mination that such depository institution no the Senate; and
given under section 103 of the Riegle Commu-
longer meets the criteria for the designation; (ii) one member of the majority party and
nity Development and Regulatory Improve-
or one member of the minority party of any rel-
ment Act of 1994 (12 U.S.C. 4702).
(2) file an appeal of such determination. evant subcommittees of such committees.
(2) MINORITY DEPOSITORY INSTITUTION.—The (g) RULEMAKING.—Not later than 1 year (e) NO TERMINATION OF ADVISORY COMMIT-
term ‘‘minority depository institution’’ has after the date of the enactment of this Act, TEES.—The termination requirements under
the meaning given under section 308 of the the Federal banking agencies shall jointly section 14 of the Federal Advisory Com-
Financial Institutions Reform, Recovery, issue rules to carry out the requirements of mittee Act (5 U.S.C. app.) shall not apply to
and Enforcement Act of 1989 (12 U.S.C. 1463 this section, including by providing a defini- a Minority Depositories Advisory Committee
note), as amended by this Act. tion of a low-income borrower. established pursuant to this section.
SEC. 4. INCLUSION OF WOMEN’S BANKS IN THE (h) REPORTS.—Each Federal banking agen- (f) DEFINITIONS.—In this section:
DEFINITION OF MINORITY DEPOSI- cy shall submit an annual report to the Con- (1) COVERED REGULATOR.—The term ‘‘cov-
TORY INSTITUTION. gress containing a description of actions ered regulator’’ means the Comptroller of
Section 308(b)(1) of the Financial Institu- taken to carry out this section. the Currency, the Board of Governors of the
tions Reform, Recovery, and Enforcement (i) FEDERAL DEPOSIT INSURANCE ACT DEFI- Federal Reserve System, the Federal Deposit
Act of 1989 (12 U.S.C. 1463 note) is amended— NITIONS.—In this section, the terms ‘‘deposi- Insurance Corporation, and the National
(1) by redesignating subparagraphs (A), (B), tory institution’’, ‘‘appropriate Federal Credit Union Administration.
and (C) as clauses (i), (ii), and (iii), respec- banking agency’’, and ‘‘Federal banking (2) COVERED MINORITY INSTITUTION.—The
tively; agency’’ have the meanings given such term ‘‘covered minority institution’’ means
(2) by striking ‘‘means any’’ and inserting terms, respectively, in section 3 of the Fed- a minority depository institution (as defined
the following: ‘‘means— eral Deposit Insurance Act (12 U.S.C. 1813). in section 308(b) of the Financial Institutions
‘‘(A) any’’; and SEC. 6. MINORITY DEPOSITORIES ADVISORY Reform, Recovery, and Enforcement Act of
(3) in clause (iii) (as so redesignated), by COMMITTEES.
1989 (12 U.S.C. 1463 note)).
striking the period at the end and inserting (a) ESTABLISHMENT.—Each covered regu- (3) DEPOSITORY INSTITUTION.—The term
‘‘; or’’; and lator shall establish an advisory committee ‘‘depository institution’’ has the meaning
(4) by inserting at the end the following to be called the ‘‘Minority Depositories Advi- given under section 3 of the Federal Deposit
new subparagraph: sory Committee’’. Insurance Act (12 U.S.C. 1813).
(b) DUTIES.—Each Minority Depositories
‘‘(B) any bank described in clause (i), (ii), (4) INSURED CREDIT UNION.—The term ‘‘in-
Advisory Committee shall provide advice to
or (iii) of section 19(b)(1)(A) of the Federal sured credit union’’ has the meaning given in
the respective covered regulator on meeting
Reserve Act— section 101 of the Federal Credit Union Act
the goals established by section 308 of the Fi-
‘‘(i) more than 50 percent of the out- (12 U.S.C. 1752).
nancial Institutions Reform, Recovery, and
standing shares of which are held by 1 or (g) TECHNICAL AMENDMENT.—Section 308(b)
Enforcement Act of 1989 (12 U.S.C. 1463 note)
more women; and of the Financial Institutions Reform, Recov-
to preserve the present number of covered ery, and Enforcement Act of 1989 (12 U.S.C.
‘‘(ii) the majority of the directors on the minority institutions, preserve the minority
board of directors of which are women.’’. 1463 note) is amended by adding at the end
character of minority-owned institutions in the following new paragraph:
SEC. 5. ESTABLISHMENT OF IMPACT BANK DES- cases involving mergers or acquisitions, pro-
IGNATION. ‘‘(3) DEPOSITORY INSTITUTION.—The term
vide technical assistance, and encourage the ‘depository institution’ means an ‘insured
(a) IN GENERAL.—Each Federal banking creation of new covered minority institu-
agency shall establish a program under depository institution’ (as defined in section
tions. The scope of the work of each such Mi- 3 of the Federal Deposit Insurance Act (12
which a depository institution with total nority Depositories Advisory Committee
consolidated assets of less than $10,000,000,000 U.S.C. 1813)) and an insured credit union (as
shall include an assessment of the current defined in section 101 of the Federal Credit
may elect to be designated as an impact condition of covered minority institutions,
bank if the total dollar value of the loans ex- Union Act (12 U.S.C. 1752)).’’.
what regulatory changes or other steps the
tended by such depository institution to low- SEC. 7. FEDERAL DEPOSITS IN MINORITY DEPOS-
respective agencies may be able to take to ITORY INSTITUTIONS.
income borrowers is greater than or equal to fulfill the requirements of such section 308, (a) IN GENERAL.—Section 308 of the Finan-
50 percent of the assets of such bank. and other issues of concern to covered mi- cial Institutions Reform, Recovery, and En-
(b) NOTIFICATION OF ELIGIBILITY.—Based on nority institutions. forcement Act of 1989 (12 U.S.C. 1463 note) is
data obtained through examinations of de- (c) MEMBERSHIP.— amended—
pository institutions, the appropriate Fed- (1) IN GENERAL.—Each Minority Deposi- (1) by adding at the end the following new
eral banking agency shall notify a deposi- tories Advisory Committee shall consist of subsection:
tory institution if the institution is eligible no more than 10 members, who— ‘‘(d) FEDERAL DEPOSITS.—The Secretary of
to be designated as an impact bank. (A) shall serve for one two-year term; the Treasury shall ensure that deposits made
(c) APPLICATION.—Regardless of whether or (B) shall serve as a representative of a de- by Federal agencies in minority depository
not it has received a notice of eligibility pository institution or an insured credit institutions and impact banks are
under subsection (b), a depository institution union with respect to which the respective collateralized or insured, as determined by
may submit an application to the appro- covered regulator is the covered regulator of the Secretary. Such deposits shall include
priate Federal banking agency— such depository institution or insured credit reciprocal deposits as defined in section
(1) requesting to be designated as an im- union; and 337.6(e)(2)(v) of title 12, Code of Federal Reg-
pact bank; and (C) shall not receive pay by reason of their ulations (as in effect on March 6, 2019).’’; and
(2) demonstrating that the depository in- service on the advisory committee, but may (2) in subsection (b), as amended by section
stitution meets the applicable qualifications. receive travel or transportation expenses in 6(g), by adding at the end the following new
(d) LIMITATION ON ADDITIONAL DATA RE- accordance with section 5703 of title 5, paragraph:
QUIREMENTS.—The Federal banking agencies United States Code. ‘‘(4) IMPACT BANK.—The term ‘impact bank’
may only impose additional data collection (2) DIVERSITY.—To the extent practicable, means a depository institution designated by
requirements on a depository institution each covered regulator shall ensure that the the appropriate Federal banking agency pur-
under this section if such data is— members of the Minority Depositories Advi- suant to section 5 of the Ensuring Diversity
(1) necessary to process an application sub- sory Committee of such agency reflect the in Community Banking Act.’’.
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mitted by the depository institution to be diversity of covered minority institutions. (b) TECHNICAL AMENDMENTS.—Section 308
designated an impact bank; or (d) MEETINGS.— of the Financial Institutions Reform, Recov-
(2) with respect to a depository institution (1) IN GENERAL.—Each Minority Deposi- ery, and Enforcement Act of 1989 (12 U.S.C.
that is designated as an impact bank, nec- tories Advisory Committee shall meet not 1463 note) is amended—
essary to ensure the depository institution’s less frequently than twice each year. (1) in the matter preceding paragraph (1),
ongoing qualifications to maintain such des- (2) NOTICE AND INVITATIONS.—Each Minor- by striking ‘‘section—’’ and inserting ‘‘sec-
ignation. ity Depositories Advisory Committee shall— tion:’’; and
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September 21, 2020 CONGRESSIONAL RECORD — HOUSE H4599
(2) in the paragraph heading for paragraph SEC. 9. DIVERSITY REPORT AND BEST PRAC- during the 10-year period preceding the date
(1), by striking ‘‘FINANCIAL’’ and inserting TICES. of the report;
‘‘DEPOSITORY’’. (a) ANNUAL REPORT.—Each covered regu- (2) the main challenges to the creation of
lator shall submit to Congress an annual re- de novo minority depository institutions and
SEC. 8. MINORITY BANK DEPOSIT PROGRAM.
port on diversity including the following: de novo impact banks; and
(a) IN GENERAL.—Section 1204 of the Finan- (1) Data, based on voluntary self-identi- (3) regulatory and legislative consider-
cial Institutions Reform, Recovery, and En- fication, on the racial, ethnic, and gender ations to promote the establishment of de
forcement Act of 1989 (12 U.S.C. 1811 note) is composition of the examiners of each cov- novo minority depository institutions and de
amended to read as follows: ered regulator, disaggregated by length of novo impact banks.
‘‘SEC. 1204. EXPANSION OF USE OF MINORITY DE- time served as an examiner. SEC. 11. REPORT ON COVERED MENTOR-PRO-
POSITORY INSTITUTIONS. (2) The status of any examiners of covered TEGE PROGRAMS.
‘‘(a) MINORITY BANK DEPOSIT PROGRAM.— regulators, based on voluntary self-identi- (a) REPORT.—Not later than 6 months after
‘‘(1) ESTABLISHMENT.—There is established fication, as a veteran. the date of the enactment of this Act and an-
a program to be known as the ‘Minority (3) Whether any covered regulator, as of nually thereafter, the Secretary of the
Bank Deposit Program’ to expand the use of the date on which the report required under Treasury shall submit to Congress a report
minority depository institutions. this section is submitted, has adopted a pol- on participants in a covered mentor-protege
‘‘(2) ADMINISTRATION.—The Secretary of icy, plan, or strategy to promote racial, eth- program, including—
the Treasury, acting through the Fiscal nic, and gender diversity among examiners (1) an analysis of outcomes of such pro-
Service, shall— of the covered regulator. gram;
‘‘(A) on application by a depository insti- (4) Whether any special training is devel- (2) the number of minority depository in-
tution or credit union, certify whether such oped and provided for examiners related spe- stitutions that are eligible to participate in
depository institution or credit union is a cifically to working with depository institu- such program but do not have large financial
minority depository institution; tions and credit unions that serve commu- institution mentors; and
‘‘(B) maintain and publish a list of all de- nities that are predominantly minorities, (3) recommendations for how to match
pository institutions and credit unions that low income, or rural, and the key focus of such minority depository institutions with
have been certified pursuant to subparagraph such training. large financial institution mentors.
(A); and (b) BEST PRACTICES.—Each Office of Minor- (b) DEFINITIONS.—In this section:
‘‘(C) periodically distribute the list de- ity and Women Inclusion of a covered regu- (1) COVERED MENTOR-PROTEGE PROGRAM.—
scribed in subparagraph (B) to— lator shall develop, provide to the head of The term ‘‘covered mentor-protege program’’
‘‘(i) all Federal departments and agencies; the covered regulator, and make publicly means a mentor-protege program established
‘‘(ii) interested State and local govern- available best practices— by the Secretary of the Treasury pursuant to
ments; and (1) for increasing the diversity of can- section 45 of the Small Business Act (15
‘‘(iii) interested private sector companies. didates applying for examiner positions, in- U.S.C. 657r).
‘‘(3) INCLUSION OF CERTAIN ENTITIES ON cluding through outreach efforts to recruit (2) LARGE FINANCIAL INSTITUTION.—The
LIST.—A depository institution or credit diverse candidate to apply for entry-level ex- term ‘‘large financial institution’’ means
union that, on the date of the enactment of aminer positions; and any entity—
this section, has a current certification from (2) for retaining and providing fair consid- (A) regulated by the Comptroller of the
the Secretary of the Treasury stating that eration for promotions within the examiner Currency, the Board of Governors of the Fed-
such depository institution or credit union is staff for purposes of achieving diversity eral Reserve System, the Federal Deposit In-
a minority depository institution shall be in- among examiners. surance Corporation, or the National Credit
cluded on the list described under paragraph (c) COVERED REGULATOR DEFINED.—In this Union Administration; and
(2)(B). section, the term ‘‘covered regulator’’ means (B) that has total consolidated assets
‘‘(b) EXPANDED USE AMONG FEDERAL DE- the Comptroller of the Currency, the Board greater than or equal to $50,000,000,000.
PARTMENTS AND AGENCIES.—
of Governors of the Federal Reserve System, SEC. 12. CUSTODIAL DEPOSIT PROGRAM FOR
‘‘(1) IN GENERAL.—Not later than 1 year the Federal Deposit Insurance Corporation, COVERED MINORITY DEPOSITORY
after the establishment of the program de- and the National Credit Union Administra- INSTITUTIONS AND IMPACT BANKS.
tion. (a) IN GENERAL.—Not later than one year
scribed in subsection (a), the head of each
SEC. 10. INVESTMENTS IN MINORITY DEPOSI- after the date of the enactment of this Act,
Federal department or agency shall develop
TORY INSTITUTIONS AND IMPACT the Secretary of the Treasury shall issue
and implement standards and procedures to BANKS. rules establishing a custodial deposit pro-
prioritize, to the maximum extent possible (a) CONTROL FOR CERTAIN INSTITUTIONS.— gram under which a covered bank may re-
as permitted by law and consistent with Section 7(j)(8)(B) of the Federal Deposit In- ceive deposits from a qualifying account.
principles of sound financial management, surance Act (12 U.S.C. 1817(j)(8)(B)) is amend- (b) REQUIREMENTS.—In issuing rules under
the use of minority depository institutions ed to read as follows: subsection (a), the Secretary of the Treasury
to hold the deposits of each such department ‘‘(B) ‘control’ means the power, directly or shall—
or agency. indirectly— (1) consult with the Federal banking agen-
‘‘(2) REPORT TO CONGRESS.—Not later than 2 ‘‘(i) to direct the management or policies cies;
years after the establishment of the program of an insured depository institution; or (2) ensure each covered bank participating
described in subsection (a), and annually ‘‘(ii)(I) with respect to an insured deposi- in the program established under this sec-
thereafter, the head of each Federal depart- tory institution, of a person to vote 25 per tion—
ment or agency shall submit to Congress a centum or more of any class of voting securi- (A) has appropriate policies relating to
report on the actions taken to increase the ties of such institution; or management of assets, including measures to
use of minority depository institutions to ‘‘(II) with respect to an insured depository ensure the safety and soundness of each such
hold the deposits of each such department or institution that is an impact bank (as des- covered bank; and
agency. ignated pursuant to section 5 of the Ensuring (B) is compliant with applicable law; and
‘‘(c) DEFINITIONS.—For purposes of this sec- Diversity in Community Banking Act) or a (3) ensure, to the extent practicable that
tion: minority depository institution (as defined the rules do not conflict with goals described
‘‘(1) CREDIT UNION.—The term ‘credit union’ in section 308(b) of the Financial Institutions in section 308(a) of the Financial Institutions
has the meaning given the term ‘insured Reform, Recovery, and Enforcement Act of Reform, Recovery, and Enforcement Act of
credit union’ in section 101 of the Federal 1989), of an individual to vote 30 percent or 1989 (12 U.S.C. 1463 note).
Credit Union Act (12 U.S.C. 1752). more of any class of voting securities of such (c) LIMITATIONS.—
‘‘(2) DEPOSITORY INSTITUTION.—The term an impact bank or a minority depository in- (1) DEPOSITS.—With respect to the funds of
‘depository institution’ has the meaning stitution.’’. an individual qualifying account, an entity
given in section 3 of the Federal Deposit In- (b) RULEMAKING.—The Federal banking may not deposit an amount greater than the
surance Act (12 U.S.C. 1813). agencies (as defined in section 3 of the Fed- insured amount in a single covered bank.
‘‘(3) MINORITY DEPOSITORY INSTITUTION.— eral Deposit Insurance Act (12 U.S.C. 1813)) (2) TOTAL DEPOSITS.—The total amount of
The term ‘minority depository institution’ shall jointly issue rules for de novo minority funds deposited in a covered bank under the
has the meaning given that term under sec- depository institutions and de novo impact custodial deposit program described under
tion 308 of this Act.’’. banks (as designated pursuant to section 5) this section may not exceed the lesser of—
(b) CONFORMING AMENDMENTS.—The fol- to allow 3 years to meet the capital require- (A) 10 percent of the average amount of de-
lowing provisions are amended by striking ments otherwise applicable to minority de- posits held by such covered bank in the pre-
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‘‘1204(c)(3)’’ and inserting ‘‘1204(c)’’: pository institutions and impact banks. vious quarter; or
(1) Section 808(b)(3) of the Community Re- (c) REPORT.—Not later than 1 year after (B) $100,000,000 (as adjusted for inflation).
investment Act of 1977 (12 U.S.C. 2907(b)(3)). the date of the enactment of this Act, the (d) REPORT.—Each quarter, the Secretary
(2) Section 40(g)(1)(B) of the Federal De- Federal banking agencies shall jointly sub- of the Treasury shall submit to Congress a
posit Insurance Act (12 U.S.C. 1831q(g)(1)(B)). mit to Congress a report on— report on the implementation of the program
(3) Section 704B(h)(4) of the Equal Credit (1) the principal causes for the low number established under this section including in-
Opportunity Act (15 U.S.C. 1691c–2(h)(4)). of de novo minority depository institutions formation identifying participating covered
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H4600 CONGRESSIONAL RECORD — HOUSE September 21, 2020
banks and the total amount of deposits re- in section 308 of the Financial Institutions his considerable talents to the matters
ceived by covered banks under the program. Reform, Recovery, and Enforcement Act of of the Financial Services Committee,
(e) DEFINITIONS.—In this section: 1989), or an impact bank (as designated pur- and H.R. 5322 reflects that kind of skill
(1) COVERED BANK.—The term ‘‘covered suant to section 5 of the Ensuring Diversity
bank’’ means— and effort.
in Community Banking Act); and’’.
(A) a minority depository institution that (2) APPLICATION.—The amendment made by The Financial Services Committee
is well capitalized, as defined by the appro- this subsection shall apply with respect to under the chairmanship of Ms. WATERS
priate Federal banking agency; or the first report to be submitted after the and Chairman MEEKS of the sub-
(B) a depository institution designated date that is 2 years after the date of the en- committee have prioritized examining
pursuant to section 5 of the Ensuring Diver- actment of this Act. the important role of minority deposi-
sity in Community Banking Act that is well SEC. 14. TASK FORCE ON LENDING TO SMALL tory institutions, MDIs, and the role
capitalized, as defined by the appropriate BUSINESS CONCERNS. they play in our financial system, and
Federal banking agency. (a) IN GENERAL.—Not later than 6 months
(2) INSURED AMOUNT.—The term ‘‘insured we have worked on developing policies
after the date of the enactment of this Act,
amount’’ means the amount that is the the Administrator of the Small Business Ad-
to support their efforts.
greater of— ministration shall establish a task force to Over the course of a series of hear-
(A) the standard maximum deposit insur- examine methods for improving relation- ings in this Congress, the committee
ance amount (as defined in section 11(a)(1)(E) ships between the Small Business Adminis- has engaged with bank and credit
of the Federal Deposit Insurance Act (12 tration and community development finan- union CEOs, with consumer groups,
U.S.C. 1821(a)(1)(E))); or cial institutions, minority depository insti- with experts and regulators all about
(B) such higher amount negotiated be- tutions, and Impact Banks to increase the how Congress can help or reverse the
tween the Secretary of the Treasury and the volume of loans provided by such institu-
Federal Deposit Insurance Corporation under
decline in our Nation’s minority depos-
tions to small business concerns (as defined
which the Corporation will insure all depos- itory institutions, MDIs, particularly
under section 3 of the Small Business Act (15
its of such higher amount. U.S.C. 632)). Black-owned banks.
(3) FEDERAL BANKING AGENCIES.—The terms (b) REPORT TO CONGRESS.—Not later than This is important because the data
‘‘appropriate Federal banking agency’’ and 18 months after the establishment of the shows that MDIs serve the credit needs
‘‘Federal banking agencies’’ have the mean- task force described in subsection (a), the of low-income areas and serve them
ing given those terms, respectively, under Administrator of the Small Business Admin- well and that these areas have a high
section 3 of the Federal Deposit Insurance istration shall submit to Congress a report percentage of the unbanked and under-
Act. on the findings of such task force. banked.
(4) QUALIFYING ACCOUNT.—The term ‘‘quali- SEC. 15. DISCRETIONARY SURPLUS FUNDS.
fying account’’ means any account estab-
Unfortunately, these institutions
(a) IN GENERAL.—Subparagraph (A) of sec- have shrunk in numbers in recent
lished in the Department of the Treasury tion 7(a)(3) of the Federal Reserve Act (12
that— years. The number peaked in 2008 at 215
U.S.C. 289(a)(3)(A)) is amended by reducing
(A) is controlled by the Secretary; and the dollar figure described in such subpara- MDI banks. Now that number is at just
(B) is expected to maintain a balance graph by $1,400,000,000. 143 MDI banks as of the second quarter
greater than $200,000,000 for the following 24- (b) EFFECTIVE DATE.—The amendment of 2020, representing less than 3 percent
month period. made by subsection (a) shall take effect on of all FDIC-insured institutions.
SEC. 13. STREAMLINED COMMUNITY DEVELOP- September 30, 2030. In 2008 we had 41 Black-owned banks,
MENT FINANCIAL INSTITUTION AP-
PLICATIONS AND REPORTING.
SEC. 16. DETERMINATION OF BUDGETARY EF- and today we have 18. This calls for
FECTS.
(a) APPLICATION PROCESSES.—Not later congressional action.
The budgetary effects of this Act, for the Furthermore, during this pandemic,
than 12 months after the date of the enact-
purpose of complying with the Statutory
ment of this Act and with respect to any per- low-income and minority communities
son having assets under $3,000,000,000 that Pay-As-You-Go Act of 2010, shall be deter-
mined by reference to the latest statement have been hit the hardest. MDIs along
submits an application for deposit insurance with community development financial
with the Federal Deposit Insurance Corpora- titled ‘‘Budgetary Effects of PAYGO Legisla-
tion’’ for this Act, submitted for printing in institutions, CDFIs, have delivered re-
tion that could also become a community de-
velopment financial institution, the Federal the Congressional Record by the Chairman of lief to these low-income communities
Deposit Insurance Corporation, in consulta- the House Budget Committee, provided that during this pandemic. After Chair-
tion with the Administrator of the Commu- such statement has been submitted prior to woman WATERS and the other members
nity Development Financial Institutions the vote on passage. of this committee fought hard to en-
Fund, shall— The SPEAKER pro tempore (Mr. sure that MDIs and CDFIs could par-
(1) develop systems and procedures to BEYER). Pursuant to the rule, the gen- ticipate in the Paycheck Protection
record necessary information to allow the tleman from California (Mr. SHERMAN) Program, MDIs and CDFIs were able to
Administrator to conduct preliminary anal- and the gentleman from South Caro-
ysis for such person to also become a com-
provide some $16 billion of loans to
munity development financial institution;
lina (Mr. TIMMONS) each will control 20 over 220,000 small businesses and mi-
and minutes. nority-owned businesses across the
(2) develop procedures to streamline the The Chair recognizes the gentleman country.
application and annual certification proc- from California. But Congress must do more to sup-
esses and to reduce costs for such person to GENERAL LEAVE port these institutions. Toward that
become, and maintain certification as, a Mr. SHERMAN. Mr. Speaker, I ask end, H.R. 5322 provides a series of re-
community development financial institu- unanimous consent that all Members forms that will preserve, grow, and en-
tion.
(b) IMPLEMENTATION REPORT.—Not later may have 5 legislative days within courage the chartering of new MDIs, as
than 18 months after the date of the enact- which to revise and extend their re- well as promote the effective engage-
ment of this Act, the Federal Deposit Insur- marks on this legislation and to insert ment between MDIs and prudential reg-
ance Corporation shall submit to Congress a extraneous material thereon. ulators.
report describing the systems and procedures The SPEAKER pro tempore. Is there This bill will encourage investments
required under subsection (a). objection to the request of the gen- in MDIs, in part by strengthening a mi-
(c) ANNUAL REPORT.—
tleman from California? nority bank deposit program so that
(1) IN GENERAL.—Section 17(a)(1) of the
Federal Deposit Insurance Act (12 U.S.C. There was no objection. Treasury deposits Federal funds, funds
1827(a)(1)) is amended— Mr. SHERMAN. Mr. Speaker, I yield which it manages in MDIs, thus pro-
(A) in subparagraph (E), by striking ‘‘and’’ myself such time as I may consume. viding MDIs with more funds that they
at the end; I rise in strong support of H.R. 5322, can then lend.
(B) by redesignating subparagraph (F) as the Ensuring Diversity in Community Furthermore, the bill encourages
subparagraph (G); Banking Act of 2019. I would like to more partnerships between MDIs and
(C) by inserting after subparagraph (E) the thank Mr. MEEKS, the chairman of the large banks through the Department of
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following new subparagraph: Consumer Protection and Financial In- Treasury’s mentor-protege program,
‘‘(F) applicants for deposit insurance that
could also become a community development
stitutions Subcommittee for his lead- which should promote information
financial institution (as defined in section ership on this important issue. sharing and more investments in MDIs.
103 of the Riegle Community Development For over 22 years I have worked and The bill also creates a new category
and Regulatory Improvement Act of 1994), a watched Mr. MEEKS as he has devoted of small banks called ‘‘impact banks’’
minority depository institution (as defined prodigious quantities of his time and that provide most of their lending to
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September 21, 2020 CONGRESSIONAL RECORD — HOUSE H4601
low-income borrowers and would also bring a strong bipartisan bill to the fully insured with these institutions
benefit from some of the bill’s provi- floor that supports communities in which can on-lend the money in com-
sions to ensure that we can do all we need. munities that need it.
can to support low-income and minor- Mr. Speaker, I urge my colleagues to Number two, the bill calls on regu-
ity communities. support this bill, and I reserve the bal- lators to take greater ownership of
We also appreciate the collaboration ance of my time. their own failings in the area of diver-
demonstrated by ranking member of Mr. SHERMAN. Mr. Speaker, I yield sity by auditing the diversity of the
the full committee Mr. MCHENRY and 3 minutes to the gentleman from New bank examiner corps, publishing the
other committee Republicans, as this York (Mr. MEEKS), the author of this data, and considering how their own
bill was voted out of the committee in legislation. lack of diversity and lack of special
December by a unanimous vote of 52–0. Mr. MEEKS. Mr. Speaker, I thank training harms their effectiveness.
This bill has broad support, including the gentleman for yielding. Let me just Number three, the bill establishes a
from the National Bankers Associa- say how proud I am that the House is new impact bank designation for those
tion, the Independent Community taking up my bill today, the Ensuring institutions that lend primarily to low-
Bankers of America, the American Diversity in Community Banking Act. income communities and provides
Bankers Association, the Credit Union I am especially grateful for the sup- these banks access to the deposits pro-
National Association, and the National port from Financial Services Chair- grams established by this bill.
Association of Federally-Insured Credit woman MAXINE WATERS and for her Number four, the bill also calls on
Unions. guidance and for working with me to the Congress to continue supporting
Mr. Speaker, I urge Members to sup- make sure that we progress and move the CDFI Fund of the Treasury Depart-
port H.R. 5322, and I reserve the bal- this bill. ment.
ance of my time. I am likewise eternally grateful to The SPEAKER pro tempore. The
Mr. TIMMONS. Mr. Speaker, I yield Ranking Member MCHENRY, who time of the gentleman has expired.
myself such time as I may consume. worked with us very closely to make Mr. SHERMAN. Mr. Speaker, I yield
Mr. Speaker, I thank the gentleman sure that this bill had true, strong bi- an additional 1 minute to the gen-
from New York for introducing this partisan support. As a result, it passed tleman from New York.
bill. He has worked in good faith with the House Financial Services Com- Mr. MEEKS. Mr. Speaker, the CDFI
Republican Members over the past year mittee unanimously. Without that Fund leverages limited government
to reach a bipartisan solution on this partnership, this would not have hap- funding to crowd-in significant private
important issue. pened. sector capital and foster innovation,
The Financial Services Committee So, I thank both the chair and the investments, and market-oriented solu-
has held several hearings over the past ranking member, and all the members tions to tackle some of our Nation’s
year on the state of minority deposi- of this committee, for doing this. This most persistent challenges in poverty
tory institutions, or MDIs, and commu- bill passed in committee unanimously alleviation. This program has earned
nity development financial institu- and has gained the support of consumer strong bipartisan support historically
tions, or CDFIs. advocacy groups, civil rights organiza- and proven itself immensely valuable
Both MDIs and CDFIs provide crit- tions, and the financial services indus- during this pandemic.
ical services and support to their com- try. We tried to bring everybody to- Let me also say that what this does
munities. Unfortunately, the number gether on this, and we did come up is it also helps our small businesses in
of these institutions has been declining with a consensus bill. the communities and helps create
at an alarming rate. Communities of color have borne a wealth in communities where it is not.
Burdensome regulations and a lack of disproportionate burden of the COVID With the homeownership aspect, it en-
access to capital have caused many of pandemic, as measured by the infection courages individuals to buy, to own the
these MDIs to either consolidate or be and mortality rates, as well as jobs lost home and to rent the car because the
forced to shut their doors for good. It is and wealth destroyed. This pandemic home becomes an appreciating asset
simply too hard for these smaller insti- and the economic crisis it triggered and the car the depreciating asset. It
tutions to remain viable in the current devastated communities that had yet brings us all together so we can enjoy
environment. to fully recover from the financial cri- what has become the American Dream.
The bill we are considering today sis of 2008. Let me close by once again thanking
promotes policies and establishes pro- Minority banks, credit unions, and my colleagues for their bipartisan sup-
grams to support MDIs and CDFIs and community development financial in- port for this important legislation. I
the customers and communities they stitutions have remained the bright thank all of my colleagues for working
serve. spot during this pandemic, given their together to make this a better place,
Importantly, the bill seeks to pro- focus of providing financial services to and I urge all of my colleagues to vote
mote engagement in the Department of communities of color and low- and in support of this bill.
the Treasury’s mentor-protege pro- moderate-income communities. How- Mr. TIMMONS. Mr. Speaker, I urge
gram to encourage collaboration be- ever, despite their success serving my colleagues to support H.R. 5322, and
tween MDIs and institutions that act these communities, minority deposi- I yield back the balance of my time.
as financial agents for the Federal Gov- tory institutions have been dis- Mr. SHERMAN. Mr. Speaker, I yield
ernment. appearing at an alarming rate, leading myself the balance of my time.
The bill also directs each of the Fed- to expanding banking deserts and a MDIs face several challenges, includ-
eral banking regulators to establish growing share of the population vulner- ing the ability to raise capital despite
MDI advisory councils to ensure MDI able to payday lenders and other preda- overall strong financial performance.
voices are heard without weakening or tory financial institutions. They face challenges experienced as a
duplicating current efforts. To address this, this bill does the fol- result of servicing communities that
The bill also allows banks to be des- lowing: are often first and hardest hit by eco-
ignated as an impact bank. This allows Number one, minority depository in- nomic downcycles. This decline is con-
any bank that serves a majority of low- stitutions are smaller than their peers, tributing to a growing incidence of
income borrowers to be considered as pose no credible systemic risk, and banking deserts in minority commu-
an option to hold government deposits. focus overwhelmingly on underbanked nities.
This program will bolster the ability of communities of color, investing in This bill will help turn this dan-
banks to serve their communities. homeownership and small business gerous tide so that individuals in more
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Finally, the bill streamlines the ap- lending, helping to close the wealth ZIP Codes will have access to safe
plication reporting requirements to be- gap. My bill makes it easier for MDIs banking.
come and remain a CDFI. that are also community development I again thank Mr. MEEKS for author-
I appreciate the gentleman from New organizations to raise capital from pri- ing this legislation and for all of his
York for his willingness to work with vate investors and directs the Federal dedication to the Financial Services
committee Republicans so that we can Government to deposit funds that are Committee. I also thank Chairwoman
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H4602 CONGRESSIONAL RECORD — HOUSE September 21, 2020
WATERS and Ranking Member from the application of paragraph (1) pursu- rating be issued by a specific credit
MCHENRY and the other members of the ant to subparagraph (A), the Secretary or rating agency or has required that the
committee. Board of Governors, as applicable, shall, as rating be from a specific category of
soon as practicable after such exclusion, dis- NRSROs, such as the so-called major
Mr. Speaker, I urge Members to sup-
close to the public the reasoning for such ex-
port H.R. 5322, and I yield back the bal- clusion.
NRSROs.
ance of my time. ‘‘(3) NATIONALLY RECOGNIZED STATISTICAL
Often, these categories are self-cre-
The SPEAKER pro tempore. The RATING ORGANIZATION.—In this subsection, ated by the Federal Reserve and have
question is on the motion offered by the term ‘nationally recognized statistical been undefined and unclear to issuers.
the gentleman from California (Mr. rating organization’ has the meaning given These requirements act as an obstacle
SHERMAN) that the House suspend the that term under section 3 of the Securities between issuers and these lending fa-
rules and pass the bill, H.R. 5322, as Exchange Act of 1934 (15 U.S.C. 78c).’’. cilities. This clearly was not Congress’
(b) GAO STUDY.— intent, as it goes against Dodd-Frank,
amended.
(1) STUDY.—The Comptroller General of the which mandates that we foster com-
The question was taken; and (two- United States shall carry out a study on—
thirds being in the affirmative) the petition among NRSROs rather than
(A) the quality of credit ratings across na-
rules were suspended and the bill, as trying to make sure that companies
tionally recognized statistical ratings orga-
amended, was passed. nizations (as defined under section 3 of the rely only on an oligarchy of three
A motion to reconsider was laid on Securities Exchange Act of 1934), including NRSROs.
the table. during the 2008 economic crisis; As chair of the Subcommittee on In-
(B) the effect of competition on the quality vestor Protection, Entrepreneurship,
f and Capital Markets, I am quite famil-
of credit ratings and on the ability of small-
b 1615 and mid-size companies and financial insti- iar with the work that has been done in
tutions to access the capital markets; and the last decade to end overreliance on
UNIFORM TREATMENT OF NRSROS (C) the implementation of the amendment
ACT the big three credit agencies, which led
made by subsection (a). us into the 2008 crisis. It is those big
Mr. SHERMAN. Mr. Speaker, I move (2) REPORT.—Not later than one year after three that gave AAA ratings to Alt-A
to suspend the rules and pass the bill the date of enactment of this Act, the Comp-
troller General shall issue a report to the
lendings, which I believe is what
(H.R. 6934) to amend the CARES Act to caused the 2008 crisis.
Congress containing all finding and deter-
require the uniform treatment of na- minations made in carrying out the study re- Decisions by the Fed and Treasury
tionally recognized statistical rating quired under paragraph (1). with respect to many lending facilities
organizations under certain programs have threatened to undo our work to
The SPEAKER pro tempore. Pursu-
carried out in response to the COVID– try to diversify the availability of dif-
ant to the rule, the gentleman from
19 emergency, and for other purposes, ferent NRSROs.
California (Mr. SHERMAN) and the gen- H.R. 6934, which is limited to facili-
as amended.
tleman from South Carolina (Mr. ties which have been stood up in re-
The Clerk read the title of the bill.
TIMMONS) each will control 20 minutes. sponse to the COVID–19 pandemic, will
The text of the bill is as follows:
The Chair recognizes the gentleman set clear credit rating standards for
H.R. 6934 from California.
Be it enacted by the Senate and House of Rep- both the Federal Reserve and its
GENERAL LEAVE issuers. It also clarifies Congress’ in-
resentatives of the United States of America in
Congress assembled, Mr. SHERMAN. Mr. Speaker, I ask tent and will ensure that its legislative
SECTION 1. SHORT TITLE. unanimous consent that all Members objectives are carried out at the agen-
This Act may be cited as the ‘‘Uniform have 5 legislative days within which to cy level.
Treatment of NRSROs Act’’. revise and extend their remarks on this Most importantly, however, the leg-
SEC. 2. UNIFORM TREATMENT OF NRSROS. legislation and to insert extraneous islation will result in more issuers hav-
(a) IN GENERAL.—Section 4003 of the material thereon. ing access to these lending facilities,
CARES Act (15 U.S.C. 9042), as amended by The SPEAKER pro tempore. Is there an important objective during this pan-
section 902, is further amended by adding at objection to the request of the gen- demic and economic downturn, while it
the end the following: tleman from California? will still ensure that there are stand-
‘‘(m) UNIFORM TREATMENT OF NRSROS.— There was no objection. ards in effect that will adequately pro-
‘‘(1) IN GENERAL.—If, in carrying out this Mr. SHERMAN. Mr. Speaker, I yield tect the facility and the interests of
section or any other program making use of the taxpayer.
myself as much time as I may con-
a facility established under section 13(3) of Mr. Speaker, I greatly appreciate
the Federal Reserve Act in response to the sume.
COVID–19 emergency, the Secretary of the Mr. Speaker, I rise in support of H.R. Congresswoman DEAN’s leadership in
Treasury or the Board of Governors of the 6934, the Uniform Treatment of bringing forth this important legisla-
Federal Reserve System establishes a re- NRSROs, which is sponsored by Con- tion, and I reserve the balance of my
quirement for an entity, security, or other gresswoman DEAN from Pennsylvania. time.
instrument to carry a minimum credit rat- This important legislation from Con- Mr. TIMMONS. Mr. Speaker, I yield
ing, the Secretary or the Board of Governors gresswoman DEAN will ensure that myself such time as I may consume.
shall accept credit ratings provided by any qualified issuers have fair access to Mr. Speaker, I would like to thank
nationally recognized statistical rating orga-
lending facilities, and it will ensure the gentlewoman from Pennsylvania
nization with respect to such entity, secu- (Ms. DEAN) for introducing this bipar-
rity, or other instrument, if the nationally that these facilities are granted on
tisan bill.
recognized statistical rating organization is clear terms. Since the early days of the pandemic,
registered with the Securities and Exchange This is not a time where agencies the Federal Reserve has acted swiftly
Commission to issue credit ratings with re- such as the Federal Reserve should just to ensure liquidity is available to com-
spect to the applicable asset class of the en- make it up as they go along, especially
tity, security, or other instrument. panies of all sizes across the country.
when these policies disproportionately The emergency facilities support busi-
‘‘(2) EXCEPTION.— harm small and mid-sized companies.
‘‘(A) IN GENERAL.—The Secretary or the nesses and, in turn, their workers and
Board of Governors may exclude a nationally
Thus, my colleague, Ms. DEAN, intro- customers.
recognized statistical rating organization duced, and I was pleased to cosponsor, The committee has continually
from the application of paragraph (1) if, in legislation to provide clarity in the called for a broad-based approach to
consultation with the Securities and Ex- lending process by ensuring that na- aid our businesses and communities
change Commission, the Secretary or Board tionally recognized statistical rating throughout this economic crisis. H.R.
of Governors, as applicable, determines that organizations, also referred to as 6934 simply encourages the Federal Re-
the nationally recognized statistical rating NRSROs, are treated uniformly. serve to include companies that have
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organization is unable to provide reliable More specifically, the Federal Re-
and accurate ratings for a particular asset
credit ratings from all SEC-registered
serve and Treasury often require a and supervised NRSROs as participants
class and that such exclusion is in the public
interest. credit rating to apply for participation in its emergency facilities.
‘‘(B) REPORT.—If the Secretary or the in a lending facility. When there is Though the Federal Reserve revised
Board of Governors excludes a nationally such a requirement, the Federal Re- some of the requirements for compa-
recognized statistical rating organization serve has, at times, required that the nies with credit ratings from smaller
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