§4712 — Title 12 Banks and Banking | U.S. Code

Summary

The Fund can give money to groups whose main job is community development so those groups can buy loans or make community development banks and lenders more able to meet cash needs. Any money from the Fund must be matched by at least one dollar from non‑Federal sources for every dollar the Fund gives, and the match must be similar in form and value. Money given under the Housing and Community Development Act counts as Federal funds. A group that gets this help cannot also get other financial or technical help under the same part of the law. The Fund picks who gets help and makes the rules for that choice, taking into account certain existing criteria. No group can get more than $5,000,000 from the Fund (including its subsidiaries or affiliates) in any 3‑year period; the Fund can pay it all at once or over time. Recipients must file an annual report, audited financial statements at least once every 18 months, and keep records showing how the money was used. The Fund and the U.S. are only liable up to the amount given, the Federal Government does not guarantee or back these groups, and any money made from selling loans must be used for community development.

Title 12, §4712

Banks and Banking — Source: USLM XML via OLRC

(a)(1)The Fund may provide assistance for the purpose of providing capital to organizations to purchase loans or otherwise enhance the liquidity of community development financial institutions, if—

(A)the primary purpose of such organizations is to promote community development; and

(B)any assistance received is matched with funds—

(i)from sources other than the Federal Government;

(ii)on the basis of not less than one dollar for each dollar provided by the Fund; and

(iii)that are comparable in form and value to the assistance provided by the Fund.

(2)An organization that receives assistance under this section may not receive other financial or technical assistance under this subchapter.

(3)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.

(b)The selection of organizations to receive assistance under this section shall be at the discretion of the Fund and in accordance with criteria established by the Fund. In establishing such criteria, the Fund shall take into account the criteria contained in section 4704(b) and 4706 of this title, as appropriate.

(c)The Fund may provide a total of not more than $5,000,000 of assistance to an organization or its subsidiaries or affiliates under this section during any 3-year period. Assistance may be provided in a lump sum or over a period of time, as determined by the Fund.

(d)Organizations that receive assistance from the Fund in accordance with this section shall—

(1)submit to the Fund, not less than once in every 18-month period, financial statements audited by an independent certified public accountant, as part of the report required by paragraph (2);

(2)submit an annual report on its activities; and

(3)keep such records as may be necessary to disclose the manner in which any assistance under this section is used.

(e)(1)The liability of the Fund and the United States Government arising out of the provision of assistance to any organization in accordance with this section shall be limited to the amount of such assistance. The Fund shall be exempt from any assessments and any other liabilities that may be imposed on controlling or principal shareholders by any Federal law or the law of any State, or territory. Nothing in this paragraph shall affect the application of Federal tax law.

(2)This section does not oblige the Federal Government, either directly or indirectly, to provide any funds to any organization assisted pursuant to this section, or to honor, reimburse, or otherwise guarantee any obligation or liability of such an organization. This section shall not be construed to imply that any such organization or any obligations or securities of any such organization are backed by the full faith and credit of the United States.

(f)Any proceeds from the sale of loans by an organization assisted under this section shall be used by the seller for community development purposes.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Housing and Community Development Act of 1974, referred to in subsec. (a)(3), is Pub. L. 93–383, Aug. 22, 1974, 88 Stat. 633. For complete classification of this Act to the Code, see

Short Title

note set out under section 5301 of Title 42, The Public Health and Welfare, and Tables.

§4712 Capitalization Assistance to Enhance Liquidity