Local Agency Investment Fund: Community Reinvestment Account.

Existing law provides that all moneys in the Local Agency Investment Fund, which is continuously appropriated, is held in trust in the custody of the Treasurer and shall be deposited, invested, and reinvested in the same manner and to the same extent as if it were state moneys in the State Treasury. Existing law authorizes the Treasurer to invest the moneys of the fund in prescribed securities and to elect to have the moneys in the fund invested through the Surplus Money Investment Fund, as specified, so as to achieve the objective of the fund which is to realize the maximum return consistent with safe and prudent treasury management. Existing law, for purposes of a savings and loan association or credit union being eligible to receive deposits of state funds, specifies which securities may be accepted as collateral, and includes within that list of eligible securities a letter of credit issued by the Federal Home Loan Bank of San Francisco that, notwithstanding requirements that a savings and loan association or credit union deposit with the Treasurer securities in a value at least 10% in excess of the amount deposited with the savings and loan association or credit union, shall be in an amount in value of at least 100% of the amount deposited with the savings and loan association or credit union. This bill would create within the Local Agency Investment Fund the Community Reinvestment Account from which deposits shall be made to institutions that meet specified performance standards including verified small business lending in underserved census tracts and first-time or first-generation home buyer lending. The bill would require the Treasurer to establish the percentage of funds, not less than 5% and not exceeding 10%, in the Local Agency Investment Fund that shall be transferred to the Community Reinvestment Account. Because the fund is continuously appropriated, this bill would make an appropriation. Notwithstanding the provisions described above applicable to savings and loan associations and credit unions, the bill would authorize a letter of credit issued by the Federal Home Loan Bank of San Francisco accepted as collateral for a deposit from the Community Reinvestment Account to be in an amount in value of at least 90% of the amount deposited with the institution. The bill would require institutions that receive deposits from the Community Reinvestment Account to submit quarterly, nonidentifying, performance reports to the Treasurer and the Treasurer to publish the data it receives in a publicly available report.