Technical corrections only. The two versions of H.R. 3709 are substantively identical, with v4 adding the name of the House Clerk and indicating the bill's referral to the Senate. No substantive policy changes were made between v3 and v4.
Advancing the Mentor-Protégé Program for Small Financial Institutions Act
- Sponsor
- Rep. Beatty, Joyce [D-OH-3]
- Committees
- Financial Services Committee (primary)
- Last action
- May 13, 2026
Bottom line
The bill creates a new Treasury program to foster the development and capacity of small, minority, and rural financial institutions through mentorship from larger financial entities.
What it actually does
This bill amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to establish a Financial Agent Mentor-Protege Program within the Department of the Treasury. The program aims to allow designated financial agents or large financial institutions to mentor small financial institutions, helping them prepare to perform as financial agents for the government or improve their capacity to provide services to customers.
Proponents argue
Supporters argue that this program will strengthen smaller financial institutions, particularly those serving underserved communities, by providing them with valuable expertise and resources. This initiative is expected to enhance financial inclusion, promote competition within the financial sector, and ensure a more robust network of financial agents capable of supporting government operations and local economies.
Opponents contend
Critics might contend that while well-intentioned, the program could create an unnecessary administrative burden for the Department of the Treasury with potentially limited tangible benefits. Concerns could also be raised about the voluntary nature of the program, which might lead to insufficient participation from large institutions or questions about the effectiveness of mentorship in significantly altering the competitive landscape.
The bill is very short and clearly written, making it accessible for a quick and comprehensive review by any interested reader.
Section 2(a), adding subsection (d) to Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note)
Establishment of Financial Agent Mentor-Protege Program
This provision mandates the Secretary of the Treasury to establish a 'Financial Agent Mentor-Protege Program'. Under this program, existing financial agents or large financial institutions will serve as mentors to small financial institutions. The primary goals are to prepare these small institutions to act as financial agents for the U.S. government or to enhance their overall capacity to provide services to their customers. The Secretary is also required to hold annual outreach events to promote participation and establish a process for excluding entities from the program.
Supporters argue
Supporters argue that this program will directly address the challenges faced by smaller financial institutions in competing with larger entities and accessing opportunities like serving as government financial agents. By fostering mentorship, the bill aims to create a more resilient and diverse financial system, particularly benefiting minority and rural communities through stronger local institutions.
Critics contend
Critics might argue that the program's voluntary nature could limit its effectiveness, as large institutions may lack sufficient incentive to participate actively. There could also be concerns that the administrative costs for the Treasury to establish and manage the program might outweigh the actual benefits if participation is low or mentorship outcomes are not rigorously measured.
Tradeoffs
The bill navigates the tension between supporting smaller financial institutions to enhance their capabilities and the potential administrative burden and voluntary participation challenges. It seeks to leverage the resources of larger institutions without imposing mandatory requirements, balancing market-driven development with government-facilitated support.
This section defines key terms for the program: 'financial agent' (national banking association designated by Treasury), 'large financial institution' (entity regulated by federal agencies with assets >= $50B), 'rural depository institution' (depository institution with assets < $10B in a rural area), and 'small financial institution' (entity regulated by federal agencies with assets <= $2B, a minority depository institution, or a rural depository institution).
Section 2(a), adding subsection (d)(5) to Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
Why it matters:This is standard legislative practice; definitions are typically grouped at the end of a section to provide clarity for the terms used throughout the preceding text. It is not an attempt to obscure information.
Case for: Supporters argue that these precise definitions are crucial for ensuring the program targets the intended beneficiaries – genuinely small institutions, including those serving minority and rural communities – and that mentors are indeed large enough to provide substantial support. The specific asset thresholds provide clear eligibility criteria.
Case against: Critics might argue that the specific asset thresholds, particularly for 'small financial institution' ($2 billion) and 'rural depository institution' ($10 billion), could be arbitrary and potentially exclude institutions that could benefit from mentorship but fall just outside these strict definitions. This could limit the program's overall reach and impact.
Estimated impact: These definitions directly determine the precise scope and eligibility for both mentor and protege institutions, thereby influencing the program's reach, the number of participants, and its overall impact on the financial sector's diversity and capacity.