Community Investment and Prosperity Act
- Bill Number
- S. 2464
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-07-24: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-02-27T12:03:21Z
AI-Generated Summary
Purpose
The Community Investment and Prosperity Act (S. 2464) aims to expand the ability of certain banks to invest in projects that benefit the public welfare. It does this by allowing federal regulators to raise the total limit on such investments, encouraging banks to support community development while maintaining financial stability.
Key Provisions
- Amendment to National Bank Investments: Updates Section 5136 of the Revised Statutes (12 U.S.C. 24), specifically the "Eleventh" paragraph, by replacing references to "15" with "20" in the fifth sentence. This pertains to the aggregate limit on investments national banking associations (federally chartered banks) can make to promote public welfare.
- Amendment to State Member Bank Investments: Updates the 23rd paragraph of Section 9 of the Federal Reserve Act (12 U.S.C. 338a) in the same way, applying the change to state member banks (state-chartered banks that are members of the Federal Reserve System).
- Regulatory Authority: Grants the Comptroller of the Currency (regulator of national banks) and the Board of Governors of the Federal Reserve System (Fed's governing body) flexibility to approve investments up to the new limit, focusing on activities that support community prosperity.
Significant Changes to Existing Law
- Increases the cap on public welfare investments from 15% to 20% of a bank's capital and surplus (the total of its capital stock, surplus fund, and undivided profits). Previously, this limit restricted how much banks could allocate to non-traditional investments like affordable housing, small business loans, or community revitalization without prior approval.
- These changes apply only to specific types of banks and do not alter core banking restrictions on other activities.
Potential Impacts
- On Government Agencies: The Comptroller of the Currency and the Federal Reserve will have more discretion in overseeing and approving investments, potentially streamlining regulatory processes but requiring updated guidelines to ensure investments align with public welfare goals.
- On Citizens: Could lead to increased funding for community projects, such as economic development in underserved areas, benefiting low- and moderate-income communities through better access to credit and services.
- On International Relations: Minimal direct impact, as the bill focuses on domestic banking regulations and community investments within the U.S.
- Broader Economy: May encourage more private investment in social initiatives, potentially boosting local economies without relying solely on government funding.
Main Stakeholders Affected
- Banks: National banking associations and state member banks gain expanded investment opportunities, allowing them to diversify portfolios toward public benefit projects.
- Regulators: Comptroller of the Currency and Federal Reserve Board, who will enforce the new limits and evaluate investment proposals.
- Communities: Particularly underserved or rural areas, which may see more bank-supported initiatives for housing, education, or job creation.
- Bank Shareholders and Customers: Could experience indirect benefits from stronger community ties but face potential risks if investments underperform.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens existing frameworks under the National Bank Act and Federal Reserve Act by modestly expanding permissible activities, without challenging core banking safety nets. No new enforcement mechanisms are added, relying on current supervisory powers.
- Constitutional: Aligns with Congress's authority under Article I, Section 8 to regulate commerce and coin money, promoting economic welfare without infringing on states' rights (as it targets federally regulated entities).
- Political: Bipartisan sponsorship (introduced by Sens. Scott, Blunt Rochester, Moreno, and others) signals broad support for community reinvestment, potentially influencing future banking reforms amid debates on financial inclusion versus risk management. May set a precedent for incremental adjustments to bank investment rules.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (9)
Sen. Blunt Rochester, Lisa [D-DE], Sen. Moreno, Bernie [R-OH], Sen. Kim, Andy [D-NJ], Sen. McCormick, David [R-PA], Sen. Alsobrooks, Angela D. [D-MD], Sen. Cramer, Kevin [R-ND], Sen. Warnock, Raphael G. [D-GA], Sen. Cassidy, Bill [R-LA], Sen. Husted, Jon [R-OH]
Recent Actions
- 2025-07-24: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-07-24: Introduced in Senate
Bill Versions
- Community Investment and Prosperity Act — issued 2025-07-24 — PDF (2 pages)