12 USC 4719 - Grants to establish loan-loss reserve funds

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

§ 4719.

Grants to establish loan-loss reserve funds

(a)

Purposes

The purposes of this section are—

(1)

to make financial assistance available from the Fund in order to help community development financial institutions defray the costs of operating small dollar loan programs, by providing the amounts necessary for such institutions to establish their own loan loss reserve funds to mitigate some of the losses on such small dollar loan programs; and

(2)

to encourage community development financial institutions to establish and maintain small dollar loan programs that would help give consumers access to mainstream financial institutions and combat high cost small dollar lending.

(b)

Grants

(1)

Loan-loss reserve fund grants

(2)

Matching requirement

(3)

Use of funds

Any grant amounts received by a community development financial institution or any partnership between or among such institutions under paragraph (1)—

(A)

may not be used by such institution to provide direct loans to consumers;

(B)

may be used by such institution to help recapture a portion or all of a defaulted loan made under the small dollar loan program of such institution; and

(C)

may be used to designate and utilize a fiscal agent for services normally provided by such an agent.

(4)

Technical assistance grants

(c)

Definitions

For purposes of this section—

(1)

the term “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis” has the same meaning given such term in section 1681a(p) of title 15; and

(2)

the term “small dollar loan program” means a loan program wherein a community development financial institution or any partnership between or among such institutions offers loans to consumers that—

(A)

are made in amounts not exceeding $2,500;

(B)

must be repaid in installments;

(C)

have no pre-payment penalty;

(D)

the institution has to report payments regarding the loan to at least 1 of the consumer reporting agencies that compiles and maintains files on consumers on a nationwide basis; and

(E)

meet any other affordability requirements as may be established by the Administrator.

(Pub. L. 103–325, title I, § 122, as added Pub. L. 111–203, title XII, § 1206, July 21, 2010, 124 Stat. 2131.)

cite as: 12 USC 4719