Chapter 4A. Community Development by Financial Institutions.
§ 26–431.01. Short title.
This chapter may be cited as the “Community Development Act of 2000”.
§ 26–431.02. Definitions.
For the purposes of this chapter, the term:
(1) “CFO” means the Chief Financial Officer of the District of Columbia, established by § 1-204.24a.
(1A) “Community development” means:
(A) Affordable housing (including single-family and multi-family rental housing and homeownership) for low-income or moderate-income individuals and families and related retail and community facilities development;
(B) Community services targeted to low-income or moderate-income individuals and families;
(C) Activities that promote economic development by financing businesses that meet the size eligibility standards of the Small Business Administration Certified Development Company Program or the Small Business Administration Small Business Investment Company Program or have gross annual revenues of $1 million or less;
(D) Activities that revitalize or stabilize low-income or moderate-income areas; or
(E) Activities that seek to prevent defaults or foreclosures on loans made for the purposes described in subparagraphs (A) and (C) of this paragraph.
(1B) “Community development loan” means a loan that:
(A) Has as its primary purpose community development; and
(B) Except in the case of a wholesale or limited purpose bank, and unless a multifamily dwelling loan, has not been reported or collected by the bank or an affiliate for consideration in the bank’s assessment as a:
(i) Home mortgage;
(ii) Small business loan;
(iii) Small farm loan; or
(iv) Consumer loan; and
(C) Benefits the bank’s assessment area or a broader District-wide or regional area that includes the bank’s assessment area.
(2) “Community Reinvestment Act” shall mean the Community Reinvestment Act of 1977, approved October 12, 1977 (91 Stat. 1147; 12 U.S.C. § 2901 et seq.).
(3) “Commissioner” shall have the same meaning as set forth in § 26-551.02(7).
(4) “Department” shall have the same meaning as set forth in § 26-551.02(9).
(4A) “Deposit-receiving institution” means a federal, state, or District chartered bank, savings institution, or credit union that receives after March 11, 2015, District contracts pursuant to §§ 47-351.02(c) and 47-351.03, including any chartered bank, savings institution, or credit union that has applied to be or is regulated, supervised, examined, or licensed by the Department or a District chartered bank that is engaged in activity covered by §§ 47-351.02(c) and 47- 351.03; except, that the provision of services provided for and deposits made with regard to District debt transactions does not create a deposit-receiving institution, notwithstanding that deposit receiving institutions may provide those services or receive those deposits.
(5) “Designated development areas” means any of the following located in the District:
(A) A low-income or moderate-income area;
(B) An area designated as underserved or economically disadvantaged by the Commissioner; or
(C) A commercial, industrial, residential, or other economic development project which the Commissioner determines will benefit the District.
(5A) “Elderly resident” means a District resident 55 years of age or older.
(6) “Federal financial supervisory agency” means the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and any successor to any of the foregoing agencies, as applicable to the specific type of bank.
(7) “Financial institution” shall have the same meaning as in § 26-551.02(18).
(8) “Low-income” shall have the same meaning as set forth in § 26-1401.02(21).
(9) “Low-income area” means a census tract or block numbering area in which the median individual or family income does not exceed 65% of the median income of the Washington, D.C., metropolitan area as determined by the statistics of the United States Department of Housing and Urban Development.
(10) “Moderate-income” shall have the same meaning as set forth in § 26-1401.02(22).
(11) “Moderate-income area” means a census tract or block numbering area in which the median individual or family income does not exceed 80% of the median income for the Washington, D.C. metropolitan area as determined by the statistics of the United States Department of Housing and Urban Development.
(12) “Minority group” means African-Americans, Hispanic-Americans, Latinos, Asian-Americans, Pacific Islander-Americans, American Indians, Native Americans, or Alaskan-Natives.
(13) “Minority-owned business” means a business in which:
(A) At least 51% ownership and control is held by individuals who are members of a minority group;
(B) At least 51% of the individuals that make policy decisions and actively manage day-to-day operations are members of a minority group; and
(C) More than 50% of the net profit or loss accrues to owners who are members of a minority group.
(14) “Mortgage loan” means a loan that is secured by residential real property.
(14A) “Qualified investments” means a lawful investment, deposit, membership share, or grant that has as its primary purpose community development.
(15) “Small business loan” means a small business loan as defined in Federal Reserve System Regulation BB, 12 C.F.R. Part 228.
(16) “Women-owned business” means a business in which:
(A) At least 51% of the ownership and control is held by a woman or women;
(B) A woman or women constitute at least 51% of the individuals that make policy decisions and actively manage day-to-day operations; and
(C) More than 50% of the net profit or loss accrues to a woman owner or women owners.
§ 26–431.03. Community needs obligation.
A financial institution shall have a continuing and affirmative obligation to meet the credit needs of its local communities, including low-income and moderate-income area, consistent with the safe and sound operation of the financial institution.
§ 26–431.04. Community development plan requirement.
(a)(1) A financial institution shall submit a community development plan stating the financial institution’s plans for meeting the credit and financial services needs of the residents of the District, particularly in designated development areas. A financial institution shall submit a community development plan annually, when there is a revision to the plan, and at such times as the Commissioner, by rule, may require.
(2) The community development plan submitted under paragraph (1) of this subsection shall commit the financial institution and its subsidiaries to:
(A) Provide monitoring reports on forms designated by, and at intervals specified by, the Commissioner;
(B) Provide additional information as requested by the Commissioner to monitor compliance;
(C) Permit examinations of the records of the financial institution to the extent considered necessary by the Commissioner to monitor and enforce compliance with the community development plan;
(D) Participate in meetings on the community development performance of the financial institution at times designated by the Commissioner; and
(E) Provide that the commitment shall be a binding agreement on the financial institution and the financial institution’s successors and assignees.
(3)(A) The Department shall provide a public comment period, the start of which shall be posted on its website, and receive public comments for a period of 30 days on a draft community development plan of a District chartered bank. The Department shall share these comments with the deposit-receiving institution for it to consider in revising its draft community development plan before submitting the plan to the Commissioner.
(B) The Commissioner shall:
(i) Consider the responsiveness of the deposit-receiving institution to these comments when preparing findings;
(ii) Report the final findings, accompanied by the final community development plan, to the CFO; and
(iii) Submit any subsequent changes to the findings or plan to the CFO.
(b) The Commissioner shall assess the record of a financial institution, determine whether the financial institution is satisfying its continuing and affirmative obligation to meet the credit needs of its local communities, including low-income and moderate-income areas, consistent with the safe and sound operation of the financial institution, and shall prepare a report on the assessment and determination:
(1) In connection with an application for a certificate of authority under the District of Columbia Banking Code;
(2) In connection with the acquisition of a bank, savings institution, or holding company located in the District under the Regional Interstate Banking Act of 1985; and
(3) As required under § 26-431.05.
(c) In determining whether the financial institution is satisfying its continuing and affirmative obligation to meet the credit needs of its local communities, including low-income and moderate-income neighborhoods, the Commission shall consider:
(1) The financial institution’s Community Reinvestment Act rating and prior evaluations and any community development evaluations from the 3 prior years;
(2) Plans of the financial institution to make mortgage loans in the District, in designated development areas, and to minority residents, low-income and moderate-income residents, and elderly residents;
(3) Plans of the financial institution to make consumer loans, other than mortgage loans, in the District, in designated development areas, and to minority residents, low-income and moderate-income residents, and elderly residents;
(4) Plans of the financial institution to:
(A) Open or close branches in the District and in designated development areas;
(B) Provide basic deposit and checking accounts, such as lifeline accounts, and electronic transfer accounts designed for low-income persons; and
(C) Provide check-cashing services to non-account holders;
(5) Plans of the financial institution to:
(A) Procure services or supplies from District businesses, including minority-owned and women-owned District businesses; and
(B) Hire District residents;
(6) Plans of the financial institution to seek and place District residents, including women and members of minority groups, on the board of directors of the financial institution, subsidiaries or affiliates of the financial institution, and the holding company of the financial institution;
(7) Plans of the financial institution to:
(A) Provide seminars and individualized counseling on consumer and commercial lending in the District and in designated development areas; and
(B) Establish and maintain flexible credit terms and underwriting guidelines;
(8) Plans of the financial institution regarding the marketing of, and marketing budget for, the community development plan in the District, including plans to market the community development plan in the designated development areas as well as the types of media to be used;
(9) Plans of the financial institution to:
(A) Enter into partnerships with nonprofit and community groups, for-profit developers, District agencies, and colleges and universities and other proposed activities that promote public/private partnerships and lending programs with community-based development organizations; and
(B) Participate in other community programs that foster community development in the District;
(10) Designation of a senior lending officer responsible for implementing and overseeing the community development plan;
(11) If the determination is in connection with the acquisition of a bank, savings institution, or holding company:
(A) The status of the prior community development commitments of the financial institution to be acquired; and
(B) Plans of the acquiring entity to continue the prior commitments;
(12) Plans of a District chartered deposit-receiving institution to:
(A) Make community development loans and qualified investments;
(B) Engage in foreclosure prevention and mitigation activities, including loan modifications and reclamation of real estate properties for affordable housing;
(C) Make small business loans, including loans to minority-owned and women-owned small businesses; and
(D) Locate retail loan officers and community development loan officers in the District and to facilitate contact with these officers by listing phone numbers on the Department’s website and making their contact information widely and easily accessible.
(d) A report prepared under subsection (b) of this section shall include the assessment factors utilized to determine the financial institution’s descriptive rating, the financial institution’s descriptive rating, and the basis for the Commissioner’s determination of the financial institution’s descriptive rating.
(e) A report prepared under subsection (b) of this section shall be available to the public upon request.
(f) An informational copy of the final deposit services contract between a deposit-receiving institution and the CFO under §§ 47-351.09(e), 47- 351.10(b), and 47-351.11 shall be provided to the Commissioner and may serve as an amendment to a community development plan.
(g)(1) As a part of the deposit-receiving institution’s response to a request for proposals by the CFO to provide deposit or other financial services to the District government issued after March 11, 2015, a deposit-receiving institution shall submit its community development plan to the CFO. The CFO shall consider the community development plan, or the lack of approval by the applicable regulatory authority of the community development plan, in its evaluation of the deposit-receiving institution’s response to the request for proposals.
(2) Any community development plan submitted in the request for proposals process shall contain, at a minimum, the deposit-receiving institution’s plans for meeting the credit and financial services needs of District residents, particularly those of minority residents, low-income and moderate-income residents, elderly residents, and residents in designated development areas.
(3) As long as a contract for deposit or other financial services with the District is in effect, a deposit-receiving institution that has been awarded a deposit services contract by the District government shall submit an updated community development plan every 2 years after contracting with the District government or when there is a revision to the community development plan.
§ 26–431.05. Monitoring compliance with the community development plan.
(a) The Commissioner shall monitor whether a financial institution is satisfying its continuing and affirmative obligation to meet the credit needs of its local communities, including low-income and moderate-income areas, consistent with safe and sound operation of the financial institution.
(b) The Commissioner shall issue an annual report to the Mayor and the Council on each financial institution’s compliance with its community development plan. In the annual report, the Commissioner shall include an assessment of the community reinvestment performance of each financial institution using the applicable methodology set forth in the Community Reinvestment Act and shall include the rating for each financial institution under the system developed under § 26-431.06.
(c) The CFO shall issue an annual report to the Mayor and the Council on which deposit-receiving institutions received contracts for deposits of District funds, excluding funds associated with District debt financings, with a summary of the terms of the contract and the amounts deposited.
§ 26–431.06. Rating system for community development performance.
(a) The Commissioner shall establish, by regulation, a system to rate the community development performance of a financial institution. The system shall include the following rating categories:
(1) Outstanding record of performance in meeting the credit needs of its local communities;
(2) Highly satisfactory record of performance in meeting the credit needs of its local communities;
(3) Satisfactory record of performance in meeting the credit needs of its local communities;
(4) Needs to improve record of performance in meeting the credit needs of its local communities; and
(5) Substantial noncompliance in meeting the credit needs of its local communities.
(b) The Commissioner shall consider the compliance of the financial institution with the community development plan submitted under § 26-431.03 in assessing and rating the community development performance of the financial institution.
(c) The CFO, when evaluating the community development plan of a deposit-receiving institution shall review the rating category or score assigned to the deposit-receiving institution’s plan by the applicable financial supervisory agency and shall publish the final review on its website.
(d) The CFO shall receive public comments during a 30-day public comment period when reviewing and evaluating the community development plan of a deposit-receiving institution.
(e) The CFO shall consider in the evaluation done pursuant to subsection (c) of this section whether a deposit-receiving institution is engaged in discriminatory, unfair, or deceptive lending practices as determined by federal agencies under the Equal Credit Opportunity Act, approved October 28, 1974 (88 Stat. 1521; 15 U.S.C. § 1691 et seq.), and the Fair Housing Act, approved September 13, 1988 (82 Stat. 81; 42 U.S.C. §§ 3601 et seq.), and their implementing regulations, or under Chapter 11A of this title [§ 26-1151.01et seq.], or Chapter 39 of Title 28 [§ 28-3901et seq.], and their implementing regulations.
(f) To apply for a deposit services contract with the District government, a financial institution must receive at least a “satisfactory” rating on its most recent CRA exam.
§ 26–431.07. Examinations in cooperation with other regulators.
(a) The Commissioner may enter into cooperative agreements with financial institutions regulators in jurisdictions other than the District, including federal regulators, for the coordination of, or joint participation, in a community performance evaluation and the amount and assessment of fees for the examination or actions related to the examination.
(b) The Commissioner may accept evaluations performed under the agreements described in subsection (a) of this section.
§ 26–431.08. Authority of Commissioner to issue rules and regulations.
The Commissioner may promulgate rules and regulations to implement the provisions of this chapter pursuant to subchapter I to Chapter 5 of Title 2.
