Sec. 105. Specific requirements relating to covered banks

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A covered bank shall serve the public good and promote the general welfare. A covered bank shall define the terms public good and promote the general welfare in the governing documents of the covered bank, after such definitions are approved by either— the Governing Assembly of the covered bank; or if the covered bank does not have a Governing Assembly, the Board of Directors. Before the end of the 2-year period beginning on the formation of a covered bank, the Board of Directors of the covered bank or the Governing Assembly of the covered bank shall establish a formal governance policy for the covered bank.

A covered bank shall institutionalize a democratic governance structure through the following: The establishment of a Board of Directors— charged with ensuring that fiduciary duties of the covered bank are met; charged with ensuring the covered bank complies with policies and procedures required by statute, regulation, and principles of safety and soundness; with no less than 5 members, of which— at least one-third of the members shall represent community-based, nonprofit organizations based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); at least one member shall have demonstrated experience with, and endorsement from, organizations representing historically excluded and marginalized groups based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); at least one member shall have demonstrated experience with, and endorsement from, environmental justice or environmental organizations based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); at least one member shall have demonstrated experience with, and endorsement from, community development organizations based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); at least one member shall have demonstrated experience with, and endorsement from, labor organizations based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); and with respect to a Tribal covered bank, include a number of representatives of Indigenous communities on the board roughly proportionate to the percentage of the population of the geographic area of the relevant entity described in section 101(b)(1) who are Indigenous; with respect to a covered bank with a Governing Assembly and a People’s Review Board, that is— responsible for the basic operations of the covered bank, including— hiring and firing senior management; monitoring and assessing the covered bank’s performance, operations, and investment decisions; producing internal annual reports; and interfacing with the People’s Review Board in the issuance of public-facing reports; and responsible for ensuring that the mandates set by the Governing Assembly are successfully implemented; and with respect to a covered bank without a Governing Assembly and People’s Review Board, responsible for the basic operations of the covered bank, including— those responsibilities described under item

(aa)through

(cc)of clause (iv)(I); setting the core mandates and policies which guide the covered bank’s activities; and issuing public-facing reports. With respect to a public lending bank with more than $500,000,000 in total assets— the establishment of a Governing Assembly, which— shall— be responsible for setting the broad priorities of the public lending bank’s financing and loan programs over a multi-year investment cycle; generate the public lending bank’s core mandates; make binding decisions on the policy of the public lending bank without exercising control over day-to-day decision making; be composed of members in a manner that ensures adequate representation of, or democratic accountability to, residents within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); and with respect to a Tribal covered bank, include a number of representatives of Indigenous communities on the Governing Assembly roughly proportionate to the percentage of the population of the geographic area of the relevant entity described in section 101(b)(1) who are Indigenous; and may only have members selected by sortition if— a super-majority of the members are selected by a stratified sampling of residents based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); the Governing Assembly is professionally facilitated, deliberative in nature, and draw upon outside experts representing a range of divergent interests and viewpoints; the members selected through sortition are required to receive a comprehensive orientation and intensive training on banking regulation and finance prior to participating in decision making, and required to receive continuing educational programming throughout their term; and no member serves for longer than 6 months, absent extenuating circumstances; and the establishment of a People’s Review Board— which shall act in an advisory and oversight capacity for the public lending bank, including— monitoring and assessing the public lending bank’s performance, operations, and investment decisions to ensure they are consistent with the core mandates and policies established by the Governing Assembly; assessing the priorities and mandates of the public lending bank; ensuring the viewpoints of affected groups are represented in the policy of the public lending bank; and providing information and recommendations to the Governing Assembly and Board of Directors of the public lending bank; which shall have access to all public lending bank information pertinent to the operations and performance of the People’s Review Board; the meetings of which shall be open to public observation; which shall issue an annual report of the findings and recommendations of the People’s Review Board, and make such report publicly available online; the structure of which shall ensure adequate representation of, or democratic accountability to, residents within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); the membership of which shall prioritize community members representing historically redlined and marginalized communities; and which may only have members selected by sortition if— a super-majority of the members are selected by a stratified sampling of residents based primarily within the geographic area of (or, with respect to a corporation or nonprofit instrumentality, the geographic area served by) the relevant entity described in section 101(b)(1); the People’s Review Board is professionally facilitated, deliberative in nature, and draw upon outside experts representing a range of divergent interests and viewpoints; and the members selected through sortition are required to receive a comprehensive orientation and intensive training on banking regulation and finance prior to participating in decision making, and required to receive continuing educational programming throughout their term. A Tribal covered bank shall prioritize loans to Indigenous communities. Before the end of the 2-year period beginning on the formation of a covered bank, the Board of Directors of the covered bank or the Governing Assembly of the covered bank shall establish a formal environmental or environmental justice policy for the covered bank. Title V of the Gramm-Leach-Bliley Act ( 15 U.S.C. 6801 et seq. ) shall apply to a covered bank to the same extent such title applies to a financial institution. A covered bank shall— wherever feasible, prefer, use, and promote open source technologies; wherever possible, license under a copyleft license any software, hardware, or other digital technologies that are developed, financed, or otherwise owned by the covered bank; wherever possible, make any software acquired or developed by the covered bank available to other covered banks to study, copy, and use, at zero cost, upon request; and generally take all reasonable efforts to encourage and promote technology sharing and the development of technological best practices and common standards. A covered bank shall— maintain an individual or entity’s legitimate expectation of privacy if that individual or entity is a customer of the covered bank; and not be presumed to have given up such a legitimate expectation of privacy on the basis of the third-party doctrine articulated by the Supreme Court in United States v. Miller (1976). Data obtained by a covered bank— may not be sold to third parties, except consumer reporting agencies; that is shared with a third party by the covered bank, shall maintain an assumed right of privacy; with respect to lending data, may only be shared with— Federal, State, or Tribal agencies; or a third party that is a consumer reporting agency under the Fair Credit Reporting Act and is in compliance with such Act; and with respect to account data, may only be accessed by appropriate warrant or administrative search subpoena. A covered bank— may not share metadata with private or for-profit third parties; and shall hold metadata unused in a manner consistent with rights of privacy and duty of care. Not later than the end of the 1-year period beginning on the date of the formation of a public lending bank, the public lending bank shall establish a policy on lending practices. With respect to a public lending bank in existence on the date of enactment of this Act, the policy on lending practices shall be established before the end of the 1-year period beginning on the date of enactment of this Act. A public lending bank shall update the policy on lending practices required under subparagraph

(A)at least every 5 years. A public lending bank shall provide for a public comment period of at least 90 days before the establishment of, and any update of, the policy on lending practices required under this paragraph. For purposes of determining the projects with respect to which a public lending bank extends loans, the public lending bank shall give preference to projects that— maximize the creation of high-quality employment and apprenticeship opportunities for local workers, consistent with the public interest, especially workers from environmental justice communities and labor organizations; certify, for all contractors and subcontractors, that the rights of workers to organize and unionize are recognized; agree to implement a project labor agreement; ensure that no less than 40 percent of the monetary value of such loans provide direct benefits, including economic and health benefits, to environmental justice communities; and meet unmet needs in the local banking market. The public lending bank shall require, for any project for which the public lending bank extends a loan, that— the recipient does not oppose or resist unionization efforts involving projects utilizing public funds; if the loan is $500,000 or more, as a condition of receiving the loan, the recipient shall ensure that all laborers employed by a nongovernmental entity that enters into a contract for the performance of construction, alteration, or repair work that is facilitated, in whole or in part, by such loan, or a subcontract thereof, are paid wages at rates not less than those prevailing on similar construction, alteration, or repair work in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act ) and with respect to such labor standards, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States Code; if the project with respect to which the loan is being extended has a budget of $35,000,000 or more, all contractors and subcontractors shall implement a project labor agreement that includes— goals for hiring local community members, economically disadvantaged workers, or workers from other underrepresented communities; an equity plan, including— the impacts of the proposed project on underserved communities, including social and environmental impacts; the overall benefits of the proposed project, if funded, to underserved communities; and how diversity, equity, and inclusion objectives will be incorporated into the project; and strategic recruitment and retention policies for workers from underserved communities and people facing systemic barriers to employment; and if the project is for the acquisition, construction, or renovation of, or addition to, a residential building which includes rental units, the recipient— may not discriminate when renting the units based on an applicant’s source of income, sexual orientation, gender expression or identity, immigration status, conviction or arrest history, bankruptcy history, eviction history, or credit score; shall ensure the right of tenants to organize tenant unions, associations, or resident councils; shall utilize minimum time-bound affordability requirements of at least 99 years for affordable housing; except with respect to a building assisted under section 9 of the United States Housing Act of 1937 ( 42 U.S.C. 1437g ) or a building that has been issued a certificate of occupancy within the previous 5 years, may not increase rent on an annual basis in excess of the annual percent change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the closest metropolitan core based statistical area, rounded to one decimal place, as established the August preceding the calendar year in question or 3 percent, whatever is less; and shall practice avoidance and mitigation of displacement, including by establishing a right of return and temporary relocation for tenants displaced by renovations. The following Acts shall apply to a public lending bank to the same extent as such Acts apply to applicable persons subject to such Acts: The Truth in Lending Act ( 15 U.S.C. 1601 et seq. ). The Fair Credit Reporting Act ( 15 U.S.C. 1681 et seq. ). The Equal Credit Opportunity Act ( 15 U.S.C. 1691 et seq. ). The Fair Debt Collection Practices Act ( 15 U.S.C. 1692 et seq. ). Any covered bank that holds, administers, or manages funds on behalf of any unincorporated person in a payments account, or otherwise accepts funds on deposit or for the purpose of providing public depository accounts services— may not— impose any fees, minimum balances, or maximum balances on such payments accounts or public depository accounts; or include on such payments accounts or public depository accounts overdraft fees or penalties; shall— prominently brand any such payments account or public depository account as a public bank account in all account statements, marketing materials, and other communications of the public bank; and provide such account holders with reasonable protection against losses caused by fraud or security breaches, as determined by the Corporation or the Director of the Bureau of Consumer Financial Protection, or both; and may only close or restrict access to such payments accounts or public depository accounts on the basis of the mandate of the covered bank. Notwithstanding any provision of law, the annual percentage rate applicable to any extension of credit by a covered bank may not exceed the lesser of— 15 percent on unpaid balances, inclusive of all finance charges; or the maximum rate permitted by the laws of the State in which the consumer resides. Any fees that are not considered finance charges under paragraph (1), including fees for ancillary products and services, may not— exceed the total amount of finance charges assessed; and be imposed in such a way as to evade or frustrate the purpose of limiting the total interest and related costs that may be charged in relation to any lending product issued by covered banks under this Act. The taking, receiving, reserving, or charging of an annual percentage rate or fee greater than that permitted by paragraph (1), when knowingly done, shall be a violation of this subsection, and a forfeiture of the entire interest which the note, bill, or other evidence of the obligation carries with it, or which has been agreed to be paid thereon. With respect to a person charging interest, a finance charge, or a fee greater than that permitted by paragraph (1), the person paying such interest, finance charge, or fee may notify the Bureau of Consumer Financial Protection, and the Bureau of Consumer Financial Protection shall take such enforcement actions as the Director of the Bureau of Consumer Financial Protection determines appropriate. If a person notifies the Bureau of Consumer Financial Protection under clause (i), and the Bureau of Consumer Financial Protection takes no action with respect to such notice during the 60-day period following such notice, such person may bring an action in a Federal district court to recover the entire amount of interest, finance charges, or fees paid. Any creditor who violates this subsection shall be subject to the provisions of section 130(a) of the Truth in Lending Act ( 15 U.S.C. 1640(a) ). In establishing and maintaining personal accounts, each covered bank shall comply with— section 21 of the Federal Deposit Insurance Act ( 12 U.S.C. 1829b ); section 123 of Public Law 91–508 ; and subchapter II of chapter 53 of title 31, United States Code. Each covered bank shall make publicly available an annual report on the activities of such covered bank, including recipients of financial services, sources of funding, financial reporting, and evaluation of the effectiveness of the covered bank’s services in achieving the public purposes for which it was chartered, as well as any other purposes, goals, and targets under this Act or other law or regulation, including the percentage of the monetary value of a public lending bank’s loans which provide direct benefits to environmental justice communities. A covered bank may not provide loans to, make investments in, or otherwise engage in any activity that is financial in nature, or incidental to such financial activity, with— a company supporting— weapon or gun manufacturing; private prisons; immigration detention facilities; or the tobacco industry; or a company that has— a C.E.O. to median worker pay ratio in excess of 100:1, as determined by the National Labor Relations Board; a history of unfair labor practices, as determined by the Secretary of Labor; a history of violations of the Fair Labor Standards Act of 1938 and the Occupational Safety and Health Act of 1970, as determined by the Secretary of Labor; or a history of offshore tax avoidance, as determined by the Commissioner of the Internal Revenue Service. Section 6417(d)(1)(A) of the Internal Revenue Code of 1986 is amended— in clause (v), by striking or at the end; in clause (vi), by striking the period at the end and inserting , or ; and by adding at the end the following: a public lending bank or a public payment bank (as such terms are defined, respectively, under section 101 of the Public Banking Act of 2023). . Section 1701(7)(B) of the Energy Policy Act of 2005 ( 42 U.S.C. 16511(7)(B) ) is amended by inserting and an entity that is a public lending bank or a public payment bank (as such terms are defined, respectively, under section 101 of the Public Banking Act of 2023) before the period at the end. Subsections (b), (e), (f), (g), and

(h)shall not apply to a covered bank in existence on the date of enactment of this Act. Paragraph

(1)shall cease to apply to a covered bank described under that paragraph after the end of the 24-month period beginning on the date the covered bank receives a public bank grant under section 501.

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