Bill Summary
The "Access to Fair Financing for Opportunity and Resilient Development Act" amends the Community Development Banking and Financial Institutions Act of 1994, enhancing oversight and support for community development financial institutions (CDFIs). Key features of the legislation include an annual testimony requirement for the Secretary of the Treasury to ensure accountability, improvements to the CDFI Bond Guarantee Program to bolster community development funding, and enhanced capitalization assistance to improve liquidity for CDFIs. Additionally, it establishes a Native CDFI Relending Program under the Housing Act of 1949, aimed at increasing homeownership opportunities for Native communities by providing direct loans to Native CDFIs, which must match a portion of the funding. The legislation emphasizes annual reporting to Congress on the effectiveness of the programs and grants operational support and technical assistance to CDFIs, ultimately aiming to strengthen financial resources for underserved populations and distressed communities.
Possible Impacts
The "Access to Fair Financing for Opportunity and Resilient Development Act" will significantly impact various groups within underserved communities by improving access to financial resources. Here are three examples of how individuals will be affected by the legislation:
1. **Increased Access to Financial Services for Underserved Populations**: The enhanced oversight and support for community development financial institutions (CDFIs) will empower these entities to offer more loans and financial services to individuals in distressed communities. As a result, people who previously faced barriers to accessing credit will have an improved opportunity to secure financing for personal ventures, such as starting a business, buying a home, or making essential investments in their education.
2. **Homeownership Opportunities for Native Communities**: The establishment of a Native CDFI Relending Program is set to increase homeownership opportunities for members of Indian Tribes, Alaska Natives, and Native Hawaiians. By providing up to $50 million annually in direct loans to Native CDFIs, the program will enable these institutions to facilitate mortgage transactions, particularly for borrowers on priority Tribal land. This initiative aims to empower Native communities by enhancing their ability to achieve stable housing and financial independence.
3. **Strengthened Financial Stability for CDFIs**: By enhancing capitalization assistance and improving liquidity support for CDFIs, the legislation will enable these institutions to better serve their communities. With increased funding limits and a focus on organizations with proven experience in addressing financial needs, CDFIs will be more capable of providing necessary financial products and services. This will ultimately lead to a more resilient and financially stable community, benefitting individuals through increased economic opportunities and improved access to essential services.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3940 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 3940
To amend the Community Development Banking and Financial Institutions
Act of 1994 to require the Secretary of the Treasury to testify before
Congress, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 26, 2026
Mr. Daines (for himself, Mr. Warner, Mr. Crapo, Ms. Smith, Mr. Rounds,
Mr. Kim, Mr. Risch, Mr. Schumer, Mr. Justice, Ms. Klobuchar, Mrs.
Fischer, Mr. Booker, Mr. Wicker, Mr. Hickenlooper, Mr. Sheehy, Mr. Van
Hollen, Mr. Sullivan, Mrs. Gillibrand, Mrs. Hyde-Smith, Mr. Coons, Mr.
Peters, Mr. Bennet, Mrs. Britt, Mr. Wyden, Mr. Cassidy, Mr. Durbin, Ms.
Murkowski, Mr. Cramer, Mr. Boozman, and Mr. Heinrich) 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 require the Secretary of the Treasury to testify before
Congress, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Access to Fair Financing for
Opportunity and Resilient Development Act''.
SEC. 2. REQUIREMENT TO TESTIFY.
Section 104(b) of the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4703(b)) is amended by adding to
the end the following:
``(5) Annual testimony.--The Secretary of the Treasury (or
a designee of the Secretary) shall, at the discretion of the
chairman of the Committee on Banking, Housing, and Urban
Affairs of the Senate and chairman of the Committee on
Financial Services of the House of Representatives, annually
testify before such committees (or a subcommittee of such
committees) regarding the operations of the Fund during the
previous fiscal year.''.
SEC. 3. CDFI BOND GUARANTEE PROGRAM IMPROVEMENT.
(a) Sense of Congress.--It is the sense of Congress that the
authority to guarantee bonds under section 114A of the Community
Development Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a) (commonly referred to as the ``CDFI Bond Guarantee Program'')
provides community development financial institutions with a
sustainable source of long-term capital and furthers the mission of the
Community Development Financial Institutions Fund (established under
section 104(a) of such Act (12 U.S.C. 4703(a))) to increase economic
opportunity and promote community development investments for
underserved populations and distressed communities in the United
States.
(b) Guarantees for Bonds and Notes Issued for Community or Economic
Development Purposes.--
(1) In general.--Section 114A of the Community Development
Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a) is amended--
(A) in subsection (c)(2)--
(i) by inserting ``outstanding'' before
``principal amount''; and
(ii) by striking ``multiplied by an amount
equal to the outstanding principal balance of
issued notes or bonds,'';
(B) by amending subsection (e)(2) to read as
follows:
``(2) Limitation on guarantee amount.--The Secretary may
not guarantee any amount under the program equal to less than
$25,000,000, but the total of all such guarantees in any fiscal
year may not exceed $1,000,000,000.''; and
(C) in subsection (k), by striking ``September 30,
2014'' and inserting ``the date that is the later of 4
years after the date of enactment of the Access to Fair
Financing for Opportunity and Resilient Development Act
or December 31, 2030.''.
(2) Clerical amendment.--The table of contents in section
1(b) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Public Law 103-325; 108 Stat. 2160) is
amended by inserting after the item relating to section 114 the
following:
``Sec. 114A. Guarantees for bonds and notes issued for community or
economic development purposes.''.
(c) Report on the CDFI Bond Guarantee Program.--Not later than 3
years after the date of enactment of this Act, the Secretary of the
Treasury shall issue a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives on the effectiveness of the CDFI bond
guarantee program established under section 114A of the Community
Development Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a).
SEC. 4. 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 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, 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.
SEC. 5. NATIVE CDFI RELENDING PROGRAM.
Section 502 of the Housing Act of 1949 (42 U.S.C. 1472) is amended
by adding at the end the following:
``(j) Set Aside for Native Community Development Financial
Institutions.--
``(1) Definitions.--In this subsection--
``(A) the term `Alaska Native' has the meaning
given the term `Native' in section 3(b) of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602(b));
``(B) the term `appropriate congressional
committees' means--
``(i) the Committee on Agriculture of the
Senate;
``(ii) the Committee on Indian Affairs of
the Senate;
``(iii) the Committee on Banking, Housing,
and Urban Affairs of the Senate;
``(iv) the Committee on Agriculture of the
House of Representatives;
``(v) the Committee on Natural Resources of
the House of Representatives; and
``(vi) the Committee on Financial Services
of the House of Representatives;
``(C) the term `community development financial
institution' has the meaning given the term in section
103 of the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4702);
``(D) the term `Indian Tribe' has the meaning given
the term `Indian tribe' in section 4 of the Native
American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4103);
``(E) the term `Native community development
financial institution' means an entity--
``(i) that has been certified as a
community development financial institution by
the Secretary of the Treasury;
``(ii) that is not less than 51 percent
owned or controlled by members of Indian
Tribes, Alaska Native communities, or Native
Hawaiian communities; and
``(iii) for which not less than 51 percent
of the activities of the entity serve Indian
Tribes, Alaska Native communities, or Native
Hawaiian communities;
``(F) the term `Native Hawaiian' has the meaning
given the term in section 801 of the Native American
Housing Assistance and Self-Determination Act of 1996
(25 U.S.C. 4221); and
``(G) the term `priority Tribal land' means--
``(i) any land located within the
boundaries of--
``(I) an Indian reservation,
pueblo, or rancheria; or
``(II) a former reservation within
Oklahoma;
``(ii) any land not located within the
boundaries of an Indian reservation, pueblo, or
rancheria, the title to which is held--
``(I) in trust by the United States
for the benefit of an Indian Tribe or
an individual Indian;
``(II) by an Indian Tribe or an
individual Indian, subject to
restriction against alienation under
laws of the United States; or
``(III) by a dependent Indian
community;
``(iii) any land located within a region
established pursuant to section 7(a) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1606(a));
``(iv) Hawaiian Home Lands, as defined in
section 801 of the Native American Housing
Assistance and Self-Determination Act of 1996
(25 U.S.C. 4221); or
``(v) those areas or communities designated
by the Assistant Secretary of Indian Affairs of
the Department of the Interior that are near,
adjacent, or contiguous to reservations where
financial assistance and social service
programs are provided to Indians because of
their status as Indians.
``(2) Purpose.--The purpose of this subsection is to--
``(A) increase homeownership opportunities for
Indian Tribes, Alaska Native Communities, and Native
Hawaiian communities in rural areas; and
``(B) provide capital to Native community
development financial institutions to increase the
number of mortgage transactions carried out by those
institutions.
``(3) Set aside for native cdfis.--Of amounts appropriated
to make direct loans under this section for each fiscal year,
the Secretary may use not more than $50,000,000 to make direct
loans to Native community development financial institutions in
accordance with this subsection.
``(4) Application requirements.--A Native community
development financial institution desiring a loan under this
subsection shall demonstrate that the institution--
``(A) can provide the non-Federal cost share
required under paragraph (6); and
``(B) is able to originate and service loans for
single family homes.
``(5) Lending requirements.--A Native community development
financial institution that receives a loan pursuant to this
subsection shall--
``(A) use those amounts to make loans to
borrowers--
``(i) who otherwise meet the requirements
for a loan under this section; and
``(ii) who--
``(I) are members of an Indian
Tribe, an Alaska Native community, or a
Native Hawaiian community; or
``(II) maintain a household in
which not less than 1 member is a
member of an Indian Tribe, an Alaska
Native community, or a Native Hawaiian
community; and
``(B) in making loans under subparagraph (A), give
priority to borrowers described in that subparagraph
who are residing on priority Tribal land.
``(6) Non-federal cost share.--
``(A) In general.--A Native community development
financial institution that receives a loan under this
section shall be required to match not less than 20
percent of the amount received.
``(B) Waiver.--In the case of a loan for which
amounts are used to make loans to borrowers described
in paragraph (5)(B), the Secretary shall waive the non-
Federal cost share requirement described in
subparagraph (A) with respect to those loan amounts.
``(7) Reporting.--
``(A) Annual report by native cdfis.--Each Native
community development financial institution that
receives a loan pursuant to this subsection shall
submit an annual report to the Secretary on the lending
activities of the institution using the loan amounts,
which shall include--
``(i) a description of the outreach efforts
of the institution in local communities to
identify eligible borrowers;
``(ii) a description of how the institution
leveraged additional capital to reach
prospective borrowers;
``(iii) the number of loan applications
received, approved, and deployed;
``(iv) the average loan amount;
``(v) the number of finalized loans that
were made on Tribal trust lands and not on
Tribal trust lands; and
``(vi) the number of finalized loans that
were made on priority Tribal land and not
priority Tribal land.
``(B) Annual report to congress.--Not later than 1
year after the date of enactment of this subsection,
and every year thereafter, the Secretary shall submit
to the appropriate congressional communities a report
that includes--
``(i) a list of loans made to Native
community development financial institutions
pursuant to this subsection, including the name
of the institution and the loan amount;
``(ii) the percentage of loans made under
this section to members of Indian Tribes,
Alaska Native communities, and Native Hawaiian
communities, respectively, including a
breakdown of loans made to households residing
on and not on Tribal trust lands; and
``(iii) the average loan amount made by
Native community development financial
institutions pursuant to this subsection.
``(C) Evaluation of program.--Not later than 3
years after the date of enactment of this subsection,
the Secretary and the Secretary of the Treasury shall
conduct an evaluation of and submit to the appropriate
congressional committees a report on the program under
this subsection, which shall--
``(i) evaluate the effectiveness of the
program, including an evaluation of the demand
for loans under the program; and
``(ii) include recommendations relating to
the program, including whether--
``(I) the program should be
expanded to such that all community
development financial institutions may
make loans under the program to the
borrowers described in paragraph (5);
and
``(II) the set aside amount
paragraph (3) should be modified in
order to match demand under the
program.
``(8) Grants for operational support.--
``(A) In general.--The Secretary shall make grants
to Native community development financial institutions
that receive a loan under this section to provide
operational support and other related services to those
institutions, subject to--
``(i) the satisfactory performance, as
determined by the Secretary, of a Native
community development financial institution in
carrying out this section; and
``(ii) the availability of funding.
``(B) Amount.--A Native community development
financial institution that receives a loan under this
section shall be eligible to receive a grant described
in subparagraph (A) in an amount equal to 20 percent of
the direct loan amount received by the Native community
development financial institution under the program
under this section as of the date on which the direct
loan is awarded.
``(9) Outreach and technical assistance.--There is
authorized to be appropriated to the Secretary $1,000,000 for
each of fiscal years 2025, 2026, and 2027--
``(A) to provide technical assistance to Native
community development financial institutions--
``(i) relating to homeownership and other
housing-related assistance provided by the
Secretary; and
``(ii) to assist those institutions to
perform outreach to eligible homebuyers
relating to the loan program under this
section; or
``(B) to provide funding to a national organization
representing Native American housing interests to
perform outreach and provide technical assistance as
described in clauses (i) and (ii), respectively, of
subparagraph (A).
``(10) Administrative costs.--In addition to other
available funds, the Secretary may use not more than 3 percent
of the amounts made available to carry out this subsection for
administration of the programs established under this
subsection.''.
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