Community Investment and Prosperity Act
Summary
The Community Investment and Prosperity Act aims to amend existing statutes to allow national banking associations and state member banks to increase their investments in projects that promote public welfare. Specifically, it increases the allowable investment percentage from 15% to 20%. This change affects both the Revised Statutes of the United States and the Federal Reserve Act.
Expected Effects
The primary effect of this bill would be to provide banks with greater flexibility and capacity to invest in community development initiatives. This could lead to increased funding for projects related to affordable housing, small business development, and other public welfare activities. Ultimately, it could stimulate local economies and improve community well-being.
Potential Benefits
- Increased investment in community development projects.
- Potential for economic stimulus in underserved areas.
- Greater flexibility for banks to support public welfare initiatives.
- Possible improvements in affordable housing and small business growth.
- Enhanced community well-being through targeted investments.
Potential Disadvantages
- Potential for increased risk-taking by banks in pursuit of higher returns.
- Possible misallocation of resources if investments are not properly vetted.
- Risk of insufficient oversight leading to ineffective or detrimental projects.
- The increase might not be substantial enough to create significant change.
- Potential for unintended consequences if the increased investment authority is misused.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause, as it aims to promote the public good through community investments. Specifically, the preamble states the Constitution is intended to "promote the general Welfare". Article I, Section 8 grants Congress the power to regulate commerce and banking, which implicitly supports legislation affecting financial institutions' investment activities. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).