Conservation Bank Act

Summary

Conservation Bank Act - Establishes a Conservation Bank to provide subsidies for below-market interest rate and principal-deferred loans made to owners or builders of commercial and residential structures for the purchase and installation of energy conservation measures. Declares that the Bank shall be in the Government National Mortgage Association (GNMA) and have succession until September 30, 1984. Directs the General Accounting Office to conduct periodic audits of the Bank. Empowers the Secretary of Housing and Urban Development to fix and amend the levels of loan subsidies given by the Bank. Specifies that such subsidies shall not exceed six percent below the current maximum interest rate on insured mortgages under the National Housing Act, and the interest rate paid by borrowers on such loans. Enumerates factors to be considered by the Bank in subsidizing loans including prevailing interest rates, other Federal incentives for conservation, energy costs, and the level of subsidies needed to induce installation of energy conservation measures. Directs the Bank, beginning in fiscal year 1980, to provide subsidies to financial institutions which extend below-market interest rate and principal-deferred loans for the purchase and installation of energy conservation measures as defined in the National Energy Conservation Policy Act. Requires that the Bank provide such subsidies through lump-sum payments to a financial institution in an amount necessary to compensate the institution for the difference between the reduced interest rate and the market rate or the amount received by the institution with the deferred repayment of principal and the amount which would have been received under a conventional loan. Directs the Secretary of Housing and Urban Development to set the interest rate subsidy on a principal-deferred loan so that its cost to the GNMA equals the prevailing below-market interest rate loan subsidy. Requires subsidies to be repaid if a borrower fails to meet the obligations under a loan. Authorizes the payment of subsidies only if: (1) the term of the loan is not more than 15 years or less than five years with no penalty for prepayment at any time; (2) the amount of the loan does not exceed $5,000 per unit in the case of a one-to-four family structure, $2,500 per unit in the case of a residential structure with more than four dwelling units up to a maximum of $250,000 per loan, and $200,000 in the case of any commercial structure; (3) the security for the loan meets the requirements of the GNMA; and (4) the energy conservation measures financed with the loan will be purchased and installed after enactment of this Act except that consumers who borrowed to purchase and install energy conservation measures after September 13, 1979, may have their loans refinanced with assistance from the Bank. Requires that 75 percent of the subsidy payments made in any year shall be for financing energy conservation measures in residential structures. Establishes penalties for fraud and misrepresentation with respect to loans assisted under this Act. Requires the Secretary of Housing and Urban Development to submit a report to the Congress on the Bank's activities including recommendations for other methods of disbursing funds for energy conservation if the Bank has been unable to expend the funds provided by this Act. Directs the Secretary and the GNMA to promote the program established by this Act and to coordinate their efforts with the Department of Energy. Authorizes the Secretary to issue rules to insure the quality of the conservation measures subsidized under this Act. Directs the GNMA to implement the authority conferred upon it by the National Energy Conservation Policy Act to purchase loans to low- and moderate-income families for energy conserving improvements and to coordinate these purchases with the Conservation Bank.

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Documents

2 official files

• Reported to Senate with amendment(s)

  summary · EN · 17 October 1979

  Open at official source

• Introduced in Senate

  summary · EN · 13 September 1979

  Open at official source

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