Economic development: low- to moderate-income communities: Equity in Lending and Fair Recovery Act.

Existing law, the Small Business Financial Assistance Act of 2013, requires the California Infrastructure and Economic Development Bank to administer the Small Business Finance Center, which administers programs that assist businesses seeking new capital resources, including, but not limited to, the Small Business Loan Guarantee Program. Existing law establishes the Small Business Expansion Fund and requires, among other things, that the fund provide guarantees to loans offered by financial institutions and financial companies, as those terms are defined, to small businesses, as provided. Existing law, the California Pollution Control Financing Authority Act, establishes the California Pollution Control Financing Authority, with specified powers and duties, and authorizes the authority to approve financing for projects or pollution control facilities to prevent or reduce environmental pollution. This bill would enact the Equity in Lending and Fair Recovery Act to require the California Pollution Control Financing Authority to establish and administer the Equity in Lending and Fair Recovery Program, in accordance with specified requirements, for the purpose of supporting and expanding eligible lender access to lending capital and borrower access to responsible installment loans for low- to moderate-income individuals and communities. The bill would require the program to provide partial loan guarantees and other credit enhancements for eligible lenders, as defined, to access additional capital to expand the availability of eligible loans, as defined. This bill would, among other things, require the authority to require that participating eligible lenders pay premiums, fees, and interest sufficient to cover the reasonable administrative costs of the program and manage the risk of defaults associated with the program. The bill would require that these premiums, fees, and interest payments be deposited into the Equity in Lending and Fair Recovery Fund, which this bill would establish as a continuously appropriated fund, thereby making an appropriation. This bill would authorize the authority to establish and operate a program to provide grants to support minority-owned small businesses, as defined, allocated through a competitive application process in accordance with specified requirements. The bill would make moneys in the fund available for these grants only to the extent that there are sufficient moneys in the fund for purposes of this bill's provisions. The bill would require the authority to charge an application fee to each grantee under this program, in an amount sufficient to cover the reasonable costs of the authority in administering that program. This bill would appropriate $25,000,000 to the authority for deposit into the fund, to be used for initial startup costs relating to the establishment and operation of the Equity in Lending and Fair Recovery Program.