BILL NUMBER: AB 1418 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 25, 2008
AMENDED IN SENATE JUNE 2, 2008
AMENDED IN ASSEMBLY JANUARY 7, 2008
AMENDED IN ASSEMBLY APRIL 24, 2007
INTRODUCED BY Assembly Member Arambula
FEBRUARY 23, 2007
An act to add Section 14385 to the Financial Code, and to add
Section 13997.5 13997.8 to the
Government Code, relating to community development.
LEGISLATIVE COUNSEL'S DIGEST
AB 1418, as amended, Arambula. Community development: banks and
credit unions.
(1) Existing law provides for regulation of credit unions by the
Commissioner of Financial Institutions.
This bill would require the commissioner, by November 1, 2009, to
develop a Credit Union Membership Investment Model that would serve
as a framework for the Department of Financial Institutions to
identify credit union best practices relating to community
development, small business and microenterprise financing, and
investments of credit union capital. The bill would require the best
practices to meet specified objectives for credit unions. The bill
would require the Credit Union Membership Investment Model to be
posted on the department's Internet Web site and updated as
appropriate. The bill would require the commissioner to report
annually on the progress in implementing the model and highlight new
best practices identified and shared during the year.
(2) Existing law makes the Business, Transportation and Housing
Agency the primary state agency responsible for facilitating economic
development in the state.
This bill would require the agency to cause a list to be prepared
of significant commitments made by federally and state chartered
banks related to community development, as specified. The bill would
require the list, or a link to the list, to be posted on the agency's
Internet Web site and to be reviewed at least annually and updated
as necessary.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) California administers several programs to encourage
investments by conventional banks and state regulated insurers in
underserved communities and in small business and microenterprise,
such as the California Capital Access Program, administered by the
Treasurer, and the California Organized Investment Network, certified
Community Development Financial Institutions, administered by the
Department of Insurance.
(b) A variety of credit unions throughout the state have
established programs that serve credit union members in communities
that have been historically underserved by private equity, debt
markets, and banks.
(c) As personal savings is one of the greatest sources of startup
capital for small businesses and microenterprises, credit unions are
in a position to assist credit union members in establishing savings
accounts and accessing reasonable interest rates on personal loans
and can play a foundational role in supporting entrepreneurship and
community economic development.
(d) To promote economic development among credit union members in
historically underserved communities, also known as emerging domestic
markets, the Legislature intends to encourage state chartered credit
unions to identify best practices within the credit union industry,
and to deploy those practices, consistent with statutory and
regulatory authorizations as may be provided by the Legislature or
the Commissioner of Financial Institutions.
SEC. 2. Section 14385 is added to the Financial Code, to read:
14385. (a) On or before November 1, 2009, the commissioner shall
develop a Credit Union Membership Investment Model. The model shall
serve as a framework for the Department of Financial Institutions to
identify and distribute information on credit union best practices.
The model shall include best practices relating to community
development, small business and microenterprise financing, and
investments of credit union capital, that are consistent with the
laws and regulations applicable to credit unions. The model shall
provide for updating the best practices on a regular basis. The best
practices shall meet the following objectives:
(1) Provide capital to revitalize lower income communities through
targeted lending.
(2) Promote community ownership of assets and savings.
(3) Provide financial instruments to increase entrepreneurial
capacity and wealth in low-income communities.
(4) Use credit unions as financial and community intermediaries
that help communities where credit union members live and work to
leverage other forms of private capital for community development
purposes.
(5) Make the variety of credit union products and services more
transparent as a means to encourage community and economic
development partnerships.
(b) The Credit Union Membership Investment Model, including, but
not limited to, the process by which the best practices will be
identified and the current best practices themselves, shall be posted
on the department's Internet Web site and updated as appropriate.
(c) The commissioner shall, as part of the Credit Union Membership
Investment Model, identify and post best practices in a manner that
distinguishes best practices appropriate for credit unions according
to their asset size, type of charter, and field of membership.
(d) The commissioner may consult with stakeholder groups
the Credit Union Advisory Committee and may use
links to other Web sites of responsible organizations in order to
provide information on best practices in the most cost-effective
manner.
(e) The commissioner shall annually report, as part of any other
previously required annual report, on the progress in implementing
the model and highlight new best practices identified and shared
during the year.
SEC. 3. Section 13997.5 13997.8 is
added to the Government Code, to read:
13997.5. 13997.8. (a) The Secretary
of Business, Transportation and Housing shall cause to be prepared a
list of significant commitments made by federally and state charted
banks related to community development.
(b) The list shall include commitments with an estimated
valued value over five million dollars
($5,000,000) that could reasonably be foreseen to be applied to
California communities and California-based businesses. The list
shall include the date of the commitment, the name of the financial
institution making the commitment, the type of commitment made, and
contact information for the financial institution. Other information
may be added, but is not required, in order to meet the requirements
of this section.
(c) The list shall be posted on the Business, Transportation and
Housing Agency Internet Web site or, if the list is available from
another responsible source, a link to that site. The list shall be
reviewed at least annually and updated to the extent necessary.
(d) The Business, Transportation and Housing Agency, pursuant to
its duties to facilitate economic development activities in the
state, may promote the list through local and regional economic
development organizations.
(e) The duties imposed by this section may be assigned to any
department, board, or other entity within the oversight and
jurisdiction of the Business, Transportation and Housing Agency.