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Managing America: Banking & Finance

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Week Ending March 2, 2007

H.R.1066 To increase community development investments by depository institutions, and for other purposes.

The Home Owners Loan Act is amended to allow Federal savings associations to make investments, directly or indirectly, each of which is designed to promote the public welfare, including the welfare of low- and moderate-income communities or families through providing housing, services and jobs. Investments can be made directly or by purchasing interests in an entity whose primary engagement is such investments. No investments can be made that would subject a savings association to unlimited liability.

The Director shall establish the amount any savings association may invest in any one project and the aggregate amount of investment of any savings association. The aggregate amount may not exceed an amount equal to the sum of 5% of the savings association’s capital stock actually paid in and unimpaired and 5% of the unimpaired surplus. However, those percentages apply only if the director determines that the savings association is adequately capitalized and that the aggregate amount exceeding the set limits will pose no significant risk to the affected deposit insurance fund.

The maximum aggregate investment limit under any circumstances may not exceed 15% of the savings association’s capital stock actually paid and unimpaired and 15% of the savings association’s unimpaired surplus.

Sponsor:  Rep. Barney Frank (D-MA-4^th)

Vote: Passed House by voice vote Feb. 27, 2007.

Cost to the taxpayers: No discernible cost.

Earmark Certification:   Not applicable to this bill.

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