Promoting New and Diverse Depository Institutions Act
Floor Speech
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Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 4590) to require the Federal banking regulators to jointly conduct a study and develop a strategic plan to address challenges faced by proposed depository institutions seeking de novo depository institution charters; and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 4590
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 ``Promoting New and Diverse Depository Institutions Act''. SEC. 2. STUDY AND STRATEGIC PLAN.
(a) In General.--The Federal banking regulators shall jointly--
(1) conduct a study about the challenges faced by proposed depository institutions, including proposed minority depository institutions, seeking de novo depository institution charters; and
(2) submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate and publish publically, not later than 18 months after the date of the enactment of this section--
(A) an analysis based on the study conducted pursuant to paragraph (1);
(B) any findings from the study conducted pursuant to paragraph (1); and
(C) any legislative recommendations that the Federal banking regulators developed based on the study conducted pursuant to paragraph (1).
(b) Strategic Plan.--
(1) In general.--Not later than 18 months after the date of the enactment of this section, the Federal banking regulators shall jointly submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate and publish publically a strategic plan based on the study conducted pursuant to subsection (a) and designed to help proposed depository institutions (including proposed minority depository institutions) successfully apply for de novo depository institution charters in a manner that promotes increased availability of banking and financial services, safety and soundness, consumer protection, community reinvestment, financial stability, and a level playing field.
(2) Contents of strategic plan.--The strategic plan described in paragraph (1) shall--
(A) promote the chartering of de novo depository institutions, including--
(i) proposed minority depository institutions; and
(ii) proposed depository institutions that could be certified as community development financial institutions; and
(B) describe actions the Federal banking regulators may take that would increase the number of depository institutions located in geographic areas where consumers lack access to a branch of a depository institution.
(c) Public Involvement.--When conducting the study and developing the strategic plan required by this Act, the Federal banking regulators shall invite comments and other feedback from the public to inform the study and strategic plan.
(d) Definitions.--In this Act:
(1) Depository institution.--The term ``depository institution'' has the meaning given in section 3 of the Federal Deposit Insurance Act, and includes a ``Federal credit union'' and a ``State credit union'' as such terms are defined, respectively, under section 101 of the Federal Credit Union Act.
(2) Community development financial institution.--The term ``community development financial institution'' has the meaning given in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994.
(3) Federal banking regulators.--The term ``Federal banking regulators'' means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Director of the Bureau of Consumer Financial Protection.
(4) Minority depository institution.--The term ``minority depository institution'' has the meaning given in section 308(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
(e) Reduction.--
(1) In general.--Subparagraph (A) of section 7(a)(3) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by reducing the dollar figure described in such subparagraph by $5,000,000.
(2) Effective date.--The amendment made by paragraph (1) shall take effect on September 30, 2022. SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
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Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I support H.R. 4590, the Promoting New and Diverse Depository Institutions Act, sponsored by Representative Jake Auchincloss, the vice chair of the Financial Services Committee.
Since the 1980s, we have seen steady consolidation in the number of U.S. depository institutions from having roughly 33,000 banks and credit unions in 1980 to less than 10,000 today. Over the last decade, we have also seen a reduction of 3,300 branches by the four largest banks leaving behind banking deserts where residents lack access to a nearby branch for basic banking services.
I have also been troubled by the recent decline of roughly one-third of all minority depository institutions, also known as MDIs, and more than half of Black-owned banks since the 2008 financial crisis.
In December 2020, I was pleased to work with Ranking Member McHenry and Senators Brown, Crapo, and Warner to reach a bipartisan deal to provide $12 billion in capital investments and grants to shore up and strengthen existing MDIs as well as community development financial institutions, better known as CDFIs.
But I am still concerned that very few depository institutions, especially MDIs, have been newly chartered in recent years while banking deserts continue to grow. This bill would help address this concern by requiring regulators to study this problem, request feedback from the public, and develop a strategic plan so they can take steps to encourage the creation of new banks and credit unions, including MDIs and CDFIs.
H.R. 4590 also requires regulators to share with Congress any legislative recommendations to further promote the creation of new depository institutions, again, including MDIs and CDFIs.
So I thank Vice Chair Auchincloss for his work on this bill which received bipartisan support in our committee.
Madam Speaker, I urge my colleagues to support H.R. 4590, and I reserve the balance of my time.
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Ms. WATERS. Madam Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Auchincloss), who is also the vice chair of the Financial Services Committee.
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Ms. WATERS. Madam Speaker, I yield myself the balance of my time.
H.R. 4590 is supported by a wide range of stakeholders, including California & Nevada Credit Union Leagues, Community Development Bankers Association, Inclusiv, Independent Community Bankers Association, and many others.
I urge my colleagues to support this bill, and I yield back the balance of my time.
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