12 USC 1834b - Community development organizations

U.S Code last checked for updates: Nov 22, 2024

§ 1834b.

Community development organizations

(a)

Community development organizations described

For purposes of this subtitle, any insured depository institution, or a qualified portion thereof, shall be treated as meeting the community development organization requirements of this section if—

(1)

the institution—

(A)

is a community development bank, or controls any community development bank, which meets the requirements of subsection (b);

(B)

controls any community development corporation, or maintains any community development unit within the institution, which meets the requirements of subsection (c);

(C)

invests in accounts in any community development credit union designated as a low-income credit union, subject to restrictions established for such credit unions by the National Credit Union Administration Board; or

(D)

invests in a community development organization jointly controlled by two or more institutions;

(2)

except in the case of an institution which is a community development bank, the amount of the capital invested, in the form of debt or equity, by the institution in the community development organization referred to in paragraph (1) (or, in the case of any community development unit, the amount which the institution irrevocably makes available to such unit for the purposes described in paragraph (3)) is not less than the greater of—

(A)

½ of 1 percent of the capital, as defined by generally accepted accounting principles, of the institution; or

(B)

the sum of the amounts invested in such community development organization; and

(3)

the community development organization provides loans for residential mortgages, home improvement, and community development and other financial services, other than financing for the purchase of automobiles or extension of credit under any open-end credit plan (as defined in section 1602(i) 1

 See References in Text note below.

of title 15), to low- and moderate-income persons, nonprofit organizations, and small businesses located in qualified distressed communities in a manner consistent with the intent of this subtitle.

(b)

Community development bank requirements

A community development bank meets the requirements of this subsection if—

(1)

the community development bank has a 15-member advisory board designated as the “Community Investment Board” and consisting entirely of community leaders who—

(A)

shall be appointed initially by the board of directors of the community development bank and thereafter by the Community Investment Board from nominations received from the community; and

(B)

are appointed for a single term of 2 years, except that, of the initial members appointed to the Community Investment Board, ⅓ shall be appointed for a term of 8 months, ⅓ shall be appointed for a term of 16 months, and ⅓ shall be appointed for a term of 24 months, as designated by the board of directors of the community development bank at the time of the appointment;

(2)

⅓ of the members of the community development bank’s board of directors are appointed from among individuals nominated by the Community Investment Board; and

(3)

the bylaws of the community development bank require that the board of directors of the bank meet with the Community Investment Board at least once every 3 months.

(c)

Community development corporation requirements

(d)

Adequate dispersal requirement

(e)

Definitions

For purposes of this section—

(1)

Community development bank

(2)

Community development organization

(3)

Low- and moderate-income persons

(4)

Nonprofit organization; small business

(5)

Qualified distressed community

(Pub. L. 102–242, title II, § 234, Dec. 19, 1991, 105 Stat. 2315.)

cite as: 12 USC 1834b