March 05, 2021
FED clarifies guidance as it relates to definitions for minority depository institutions
For release at 4:45 p.m. EST
The Federal Reserve on Friday clarified guidance as it relates to definitions for minority depository institutions (MDIs), expanded the MDI definition to include women-owned financial institutions, & highlighted resources available to MDIs through its Partnership for Progress (PFP) program. The Federal Reserve System supports an inclusive financial system & understands the challenges inherent in providing access to credit & other financial services in traditionally underserved areas. The System remains strongly committed to identifying & carrying through all opportunities to support MDIs, consistent with its statutory mandates.
The PFP program is the Federal Reserve’s national MDI outreach program & implements efforts to preserve & promote MDIs. Since its creation in 2008, the program has provided MDIs with resources to help them operate in a safe-&-sound manner, adhere to laws that protect consumers, & meet FED supervisory standards. PFP program staff engages with MDIs by conducting outreach & providing technical assistance, training, education, & convenings for MDIs.
By law, the term “minority” means any Black American, Native American, Hispanic American, or Asian American. The System’s definition of MDI is consistent with the statutory definition of “minority bank,” & states that an MDI is any depository institution where a majority of the voting stock is owned by one or more socially & economically disadvantaged individuals.
In addition to institutions that meet that qualifying criteria, the System considers an institution to be an MDI if a majority of its board of directors consists of minority individuals & the community that the institution serves is predominantly minority.
In addition to the statutory provisions, the System’s definition of MDI recognizes women’s depository institutions, & will provide women’s depository institutions with the same PFP resources as other MDIs. The System’s definition of “women’s depository institution” is consistent with the definition of this term in the Community Reinvestment Act, & includes any depository institution where a majority of ownership or a majority of revenue is held by at least one woman, & a significant percentage of senior management positions of which are held by women.
The PFP website (www.fedpartnership.gov) is maintained as a primary resource for providing updates to MDIs & System supervisory staff concerning the program & any enhancements to it.
The supervisory guidance is attached.
For media inquiries, please call 202-452-2955
March 05, 2021
Source: Federal Reserves
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