FDIC Advisory Committee on 

Community Banking 

July 28, 2020 

Minority Depository Institutions Subcommittee 
FDIC 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

Purpose of the FDIC Policy Statement 

• Signals FDIC Board level commitment to supporting the five 

statutory goals for minority depository institutions (MDIs). 

• Provides framework for the MDI Program across the agency. 
FDIC 

 

 

 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

Primary Updates 

Revisions reflect the FDIC’s strengthened commitment to and 

engagement with MDIs and goals of preserving and promoting MDIs. 

• Describes engagement activities with MDIs across the organization. 

• Defines Technical Assistance, Outreach, and Education and Training. 

• References the MDI Subcommittee of the Advisory Committee on 

Community Banking (CBAC). 

• Requires measurement of FDIC MDI Program effectiveness. 

• Reiterates FDIC’s examination approach and how considerations for an 

institution's business model are made relative to examination 

standards. 
FDIC 

 

 

 

 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

FDIC Engagement with MDIs 

• Washington Office staff 

• Maintains communication with MDI trade associations and MDIs. 

• Manages FDIC MDI Subcommittee and other national initiatives. 

• Regional Office staff 

• Responds to questions or directs inquiries to the appropriate FDIC office or 

staff member with expertise on the subject for response. 

• Invites MDI board and management to meet with FDIC regional 

management annually. 

• Hosts regional roundtables. 

• Field Office staff 

• Serves as a significant resource to MDIs by readily answering examination 

related questions and explaining regulatory requirements. 
FDIC 

 

 

Policy Statement Regarding Minority Depository Institutions 

Definitions 

• Policy Statement provides definitions of key support activities 

provided by the FDIC for MDIs. The Policy Statement also 

provides clarification on the goals of these activities: 

• Technical Assistance; 

• Outreach; and 

• Education and Training. 
FDIC 

 

 

 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

FDIC MDI Subcommittee 

• Proposed Policy Statement highlights maintaining the MDI 

Subcommittee and provides the following Subcommittee goals: 

• Serves as source of feedback on FDIC strategies to fulfill 

statutory goals to preserve and promote minority 

depository institutions. 

• Makes recommendations or offers ideas to the CBAC for 

consideration and presentation to the FDIC. 

• Provides a platform for MDIs to promote collaboration, 

partnerships, and best practices. 

• Identifies ways to highlight the work of MDIs in their 

communities. 
FDIC 

 

 

 

 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

Measuring MDI Program Effectiveness 

• The National Director and the regional office staff will routinely 

solicit feedback from MDIs to assess the effectiveness of the 

FDIC’s technical assistance, outreach, and training and 

education, efforts and the MDI Program in general. 

• The FDIC will track instances of technical assistance, outreach, 

and training and education and solicit feedback on the 

effectiveness of these activities by administering periodic 

surveys and holding discussions with bank management. 
FDIC 

 

 

 

 

 

 

 

 

 

 

 

Policy Statement Regarding Minority Depository Institutions 

Examination Approach 

• All examinations must be conducted within the parameters of 

outstanding guidance. 

• Examiners consistently measure the risk an institution poses to 

the FDIC’s deposit insurance fund. 

• Examiners recognize the distinctive characteristics and differences 

in core objectives of each financial institution. 

• Institutions must properly manage risks and have appropriate 

policies, processes, or practices in place that management follows 

and uses. 

• Peer comparison data are not included in the rating systems. 

• Rating systems are designed to reflect an assessment of the 

individual institution, including its size and sophistication, the 

nature and complexity of its business activities, and risk profile. 
FDIC 

 

 

Policy Statement Regarding Minority Depository Institutions 

Next Steps 

• Present proposed Policy Statement to CBAC. 

• Submit proposed Policy Statement to the FDIC Board for its 

consideration. 

• If approved, publish in the Federal Register for public comment 

(60 days). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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5000 - Statements of Policy 

POLICY STATEMENT REGARDING MINORITY DEPOSITORY INSTITUTIONS 

Minority depository institutions often promote the economic viability of minority and under-served 

communities. The FDIC has long recognized the importance of minority depository institutions in the 

financial system and their unique role in promoting the economic viability of minority and under-served 

communities. The FDIC and has has historically taken stepsimplemented programs to preserve and 

promotepreserve and encourage minority ownership of insured these financial institutions. This Policy 

Statement describes the framework the FDIC has put into place and the initiatives the FDIC will 

undertake to fulfill its statutory goals with respect to minority depository institutions (MDI Program). 

Statutory Framework 

In August 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 

1989 ("FIRREA"). Section 308 of FIRREA established the following goals: 

• Preserve the number of minority depository institutions; 

• Preserve the minority character in cases of merger or acquisition; 

• Provide technical assistance to prevent insolvency of institutions not now insolvent; 

• Promote and encourage creation of new minority depository institutions; and 

• Provide for training, technical assistance, and educational programs. 

Definition 

Section 308 of FIRREA defines "minority depository institution" as any Federally insured depository 

institution where 51 percent or more of the voting stock is owned by one or more "socially and 

economically disadvantaged individuals." "Minority" as defined by Section 308 of FIRREA means any 

"Black American, Asian Native American, Hispanic American, or Native Asian American." Section 308 of 

FIRREA defines "minority depository institution" as any Federally insured depository institution where 51 

percent or more of the voting stock is owned by one or more "socially and economically disadvantaged 

individuals." Given the ambiguous nature of the phrase "socially and economically disadvantaged 

individuals,"Therefore, for the purposes of this Policy Statement, “minority depository institution” is 

defined as any Federally insured depository institution where 51 percent or more of the voting stock is 

owned by minority individuals. This includes institutions collectively owned by a group of minority 

individuals, such as a Native American Tribe. Ownership must be by U.S. citizens or permanent legal 

U.S. residents to be counted in determining minority ownership. In addition to the institutions that meet 

the ownership test, for the purposes of this Policy Statement, institutions will be considered minority 

depository institutions if a majority of the Board of Directors is minority and the community that the 

institution serves is predominantly minority. 

Identification of Minority Depository Institutions 

To ensure that all minority depository institutions are able to participate in the MDI pProgram, the FDIC 

will maintain a list of Federally insured minority depository institutions. Institutions that are not already 

identified as minority depository institutions can request to be designated as such by certifying that theyy 

meet the above definition. For institutions supervised directly by the FDIC, our examiners will review the 

appropriateness of their institution being inclusion on the list during the examination process. In addition, 

case managers in our regional offices will note changes to the list while processing deposit insurance 

applications, merger applications, change of control notices, or failures of minority depository institutions. 

The FDIC will work closely with the other Federal regulatory agencies to ensure that institutions not 

directly supervised by the FDIC are accurately captured on our the list. In addition, the FDIC will 

periodically provide the list to relevant trade associations and seek input regarding its the accuracy of the 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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list. Inclusion in the FDIC's MDI Program is voluntary. Any minority depository institution not wishing to 

participate in this program Program will be removed from the official list upon request. 

Organizational Structure 

The FDIC has designated a national coordinator director for the FDIC's minority depository institutions 

pMDI Program in the Washington Office and a regional coordinator in each Regional Office. The national 

coordinator director will consult with officials from the following FDIC Divisions to ensure appropriate 

personnel are involved and resources are made available with regard to MDI Program initiatives: Division 

of Risk Management Supervision, Division of Depositor and Consumer Protection, Division of 

Resolutions and Receiverships, Division of Insurance and Research, Legal Division, and the Office of 

Diversity and Economic OpportunityOffice of Minority and Women Inclusion, the Legal Division, and the 

Division of Resolutions and Receiverships to ensure appropriate personnel are involved in program 

initiatives. The national director will also consult with other organizations within the FDIC as appropriate. 

As the primary Federal regulator for State nonmember banks and State savings associations, the FDIC 

will focus its efforts on minority depository institutions with those charters. However, the national director 

will meet periodically with the other Federal banking regulators to discuss each agency's outreach efforts, 

to share ideas, and to identify opportunities where the agencies can work together to assist minority 

depository institutions. Representatives of other divisions and offices may participate in these meetings. 

Engagement with Minority Depository Institutions 

The FDIC’s MDI Program will provide for continual engagement with minority depository institutions 

through ongoing interaction with the Washington, Regional, and Field Office staff. This interaction 

includes providing technical assistance to share information and expertise on supervisory topics, outreach 

initiatives to provide opportunities for open dialogue with senior FDIC staff, and training initiatives to offer 

opportunities to gain additional knowledge about specific regulatory requirements. Further, trade 

associations affiliated with minority depository institutions serve as a significant resource in identifying 

specific interests or concerns for those institutions. 

The national coordinator director will regularly contact the various minority depository institution trade 

associa- tions to seek feedback on the FDIC's efforts under this the MDI pProgram, discuss possible 

training initiatives, and explore options for preserving promoting and promoting preserving minority 

ownership of depository institutions. The national director and the regional coordinators also will solicit 

information from trade associations and other organizations about groups that may be interested in 

establishing new minority depository institutions. FDIC representatives will be available to address such 

groups to discuss the application process, the requirements of becoming FDIC insured, and the various 

programs supporting minority depository institutions. The regional coordinators will contact all new 

minority state nonmember banks and state savings associations identified through insurance applications, 

merger applications, or change in control notices to familiarize the institutions with the resources available 

through the MDI Program. 

Technical Assistance 

Technical assistance, as defined by the FDIC’s MDI Program, is individual assistance that a regulator will 

provide to a minority depository institution in response to an institution’s request for assistance in 

understanding supervisory topics or findings. At any time, the FDIC will share information and expertise 

with bank management on various topics including, but not limited to, understanding bank regulations, 

FDIC policies, examination procedures, accounting practices, supervisory recommendations, risk 

management procedures, and compliance management procedures. In providing technical assistance, 

FDIC staff will not actually perform tasks expected of an institution's management or employees. For 

example, FDIC staff may explain Call Report instructions as they relate to specific accounts, but will not 

assist in preparing an institution's Call Report. FDIC staff may provide information on community 

reinvestment opportunities, but will not recommend a specific transaction. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DRAFT 

An institution can contact its field office representatives, case manager, or review examiner to request 

technical assistance. In addition, the regional coordinators and the institution’s assigned case manager 

and review examiner are knowledgeable about minority bank issues and will be available to answer 

questions or to direct inquiries to the appropriate FDIC office or staff member with expertise on the 

subject for response. Case managers can explain the application process and the type of analysis and 

information required for different applications. Field office representatives also serve as a significant 

resource to minority depository institutions by readily addressing examination related questions and 

explaining regulatory requirements. Other staff members within the FDIC with expertise in various 

regulatory topics will also be available to share knowledge to assist minority depository institutions in 

complying with regulations or implementing supervisory recommendations. 

During examinations, the FDIC expects examiners to fully explain supervisory recommendations and offer 

to help management understand satisfactory methods to address such recommendations. At the 

conclusion of each examination of a minority depository institution directly supervised by the FDIC, the 

FDIC will be available to return to the institution to provide technical assistance by reviewing areas of 

concern or topics of interest to the institution. The purpose of return visits is to assist management in 

understanding and implementing examination recommendations, not to identify new problems. 

Technical assistance is a tool to provide on-going support to institutions in an effort to ensure timely 

implementation of recommendations, full understanding of regulatory requirements, and in some 

instances, the viability of the institution. Technical assistance is not a supervisory activity and is not 

intended to present additional regulatory burden. Further, examination teams will not view requests for, 

or acceptance of, technical assistance negatively when evaluating institution performance or assigning 

ratings. 

Outreach 

Outreach, as defined by the FDIC’s MDI Program, consists of FDIC representatives meeting with financial 

institutions with a primary focus of building relationships and open communication and providing 

information and resources. Outreach is generally offered by the FDIC and can include meetings between 

financial institution management and senior FDIC management. 

As the primary Federal regulator for State nonmember banks, the FDIC will focus its efforts on these 

institutions. However, the national coordinator will meet with the other Federal regulators periodically to 

discuss each agency's outreach efforts, to share the ideas, and to identify opportunities where the 

agencies can work together to assist minority depository institutions. Representatives of other divisions 

and offices may participate in these meetings. 

The FDIC maintains an MDI Subcommittee of its Advisory Committee on Community Banking (CBAC) 

comprised of executives of minority depository institutions. The MDI Subcommittee serves as a source of 

feedback on FDIC strategies to fulfill statutory goals to preserve and promote minority depository 

institutions. The MDI Subcommittee may also make recommendations or offer ideas to the CBAC for 

consideration and presentation to the FDIC. The MDI Subcommittee provides a platform for minority 

depository institutions to promote collaboration, partnerships, and best practices. The Subcommittee will 

also identify ways to highlight the work of minority depository institutions in their communities. 

Executives and staff in the FDIC’s regional offices will communicate regularly with each minority 

depository institution to outline the FDIC’s efforts to promote and preserve minority depository institutions; 

will offer annually to have a member of regional management meet with the institution’s board of directors 

to discuss issues of interest, including through roundtable discussions and training sessions; and will 

seek input regarding any training or other technical assistance the institution may desire. 

The FDIC will explore opportunities to facilitate collaboration and partnering initiatives among minority 

depository institutions or between minority depository institutions and non-minority depository institutions. 
 

 

 

 

 

 

 

 

 

 

 

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The FDIC recognizes that by facilitating these collaborative relationships, institutions can have 

opportunities to better meet the needs of their communities. 

The regional coordinators are knowledgeable about minority bank issues and are available to answer 

questions or to direct inquiries to the appropriate office. However, each FDIC-insured institution has 

previously been assigned a specific case manager in their regional office who will continue to be the 

institution's central point of contact at the FDIC. At least annually, regional coordinators will contact each 

minority depository institution directly supervised by the FDIC in their respective regions to discuss the 

FDIC's efforts to promote and preserve minority ownership of financial institutions and to offer to have a 

member of regional management meet with the institution's board of directors to discuss issues of 

interest. Finally, the regional coordinators will contact all new minority State nonmember banks identified 

through insurance applications, merger applications, or change in control notices to familiarize the 

institutions with the FDIC's minority depository institution program. 

Training and Educational Programs 

Training and educational programs, as defined by the FDIC’s MDI program, consists of instruction 

designed to impart proficiency or skills related to a particular job, process, or regulatory policy. The FDIC 

will work with other banking regulatory agencies and trade associations representing minority depository 

institutions to periodically assess the need for, and provide for, training and educational opportunities. 

The FDIC will partner with other agencies and trade associations to offer training programs. This training 

and education can be provided in person, through webinars or conference calls, or in a conference 

setting. 

Reporting 

The regional coordinators will report regional office activities related to the MDI Program to the national 

director quarterly. The national director will develop a comprehensive report on all MDI Program activities 

and submit the report quarterly to the Chairman. The FDIC’s efforts to preserve and promote minority 

depository institutions will also be highlighted in the FDIC's Annual Report and the Annual Report to 

Congress on the Preservation and Promotion of Minority Depository Institutions pursuant to Section 367 

of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 308 of FIRREA. 

Measuring Program Effectiveness 

The national director and the regional office staff will routinely solicit feedback from minority depository 

institutions to assess the effectiveness of the FDIC’s technical assistance, outreach, and 

training/education efforts and the MDI Program in general. The FDIC will track instances of technical 

assistance, outreach, and training and education and solicit feedback on the effectiveness of these 

activities by administering periodic surveys and holding discussions with bank management. 

Examinations 

All insured institutions must be operated in a safe and sound manner, in accordance with FDIC’s 

regulations. Likewise, all examinations must be conducted within the parameters of FDIC examination 

policies and should consistently measure the risk an institution poses to the FDIC’s deposit insurance 

fund. Notwithstanding, and consistent with the Uniform Financial Institutions Rating System (UFIRS)1 

1 The UFIRS takes into consideration certain financial, managerial, and compliance factors that are common to all institutions. 

Compliance with laws and regulations is considered under the management component. Specialty examination findings 

(Compliance, Community Reinvestment Act, Government Security Dealers, Information Technology, Municipal Security Dealers, 

Transfer Agent, and Trust (or Fiduciary)) and the ratings assigned to those areas are taken into consideration, as appropriate, 

when assigning a composite rating and component ratings under UFIRS. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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and the Uniform Interagency Consumer Compliance Rating System (UICCR)2, examiners are expected to 

recognize the distinctive characteristics and differences in core objectives of each financial institution and 

to consider those unique factors when evaluating an institution’s financial condition and risk management 

practices. 

Under the UFIRS and UICCR, each financial institution is assigned a composite rating based on an 

evaluation of specific components, which are also rated. For UFIRS, these component ratings reflect an 

institution’s capital adequacy, asset quality, management capabilities, earnings sufficiency, liquidity 

position, and sensitivity to market risk (commonly referred to as the CAMELS ratings). Likewise, the 

UICCR is organized under broad components that assess the institution’s board and management 

oversight, compliance program, and violations of law and consumer harm. The uniform rating systems 

and evaluation and rating criteria are specific to the examination types performed. Further, the 

assignment of the rating is based solely on the subject institution’s individual performance under the 

specific components. 

Management practices, particularly as they relate to risk management, vary considerably among financial 

institutions depending on size and sophistication, the nature and complexity of business activities, and 

risk profile. Each institution must properly manage risks and have appropriate policies, processes, or 

practices in place that management follows and uses. Activities undertaken in a less complex institution 

engaging in less sophisticated risk-taking activities may only need basic management and control 

systems compared to the detailed and formalized systems and controls used for the broader and more 

complex range of activities undertaken at a larger and more complex institution. 

Peer comparison data are not included in the rating systems. The principal reason is to avoid over 

reliance on statistical comparisons to justify the component rating being assigned. This is very important 

when evaluating minority depository institutions due to their unique characteristics. For example, many 

minority depository institutions were established to serve an otherwise under-served market. High 

profitability may not be as essential to the organizers and shareholders of the institution. Instead, 

community development, improving consumer services, and promoting banking services to the unbanked 

or under-banked segment of its community may drive many of the organization’s decisions. The UFIRS 

allows for consideration of the characteristics by considering not only the level of an institution’s earnings, 

but also the trend and stability of earnings, the ability to provide for adequate capital, the quality and 

sources of earnings, and the adequacy of budgeting systems. 

Examiners are instructed to consider all relevant factors when assigning a component rating. The rating 

systems are designed to reflect an assessment of the individual institution, including its size and 

sophistication, the nature and complexity of its business activities, and risk profile.3 

Technical Assistance 

The FDIC can provide technical assistance to minority depository institutions in several ways on a variety 

of issues. An institution can contact its case manager for assistance in understanding bank regulations, 

FDIC policies, examination procedures, etc. Case managers can also explain the application process and 

the type of analysis and information required for different applications. During examinations, examiners 

are expected to fully explain any supervisory recommendations and should offer to help management 

understand satisfactory methods to address such recommendations. 

2 UICCR is a supervisory policy for evaluating financial institutions’ adherence to consumer compliance requirements. It 

provides a general framework for evaluating compliance assessment factors in order to assign a consumer compliance rating to 

each federally regulated financial institution. The consumer compliance rating reflects the effectiveness of an institution’s CMS 

to ensure compliance with consumer protection laws and regulations and reduce the risk of harm to consumers. 

3 Peer data are used in specific examination procedures for performance testing. For example, peer data are used to determine 

whether an insured depository institution serves the credit needs of its community as required under the Community 

Reinvestment Act and its implementing regulations. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

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At the conclusion of each examination of a minority depository institution directly supervised by the FDIC, 

the FDIC will offer to have representatives return to the institution approximately 90 to 120 days later to 

review areas of concern or topics of interest to the institution. The purpose of the return visits will be to 

assist management in understanding and implementing examination recommendations, not to identify 

new problems. The level of technical assistance provided should be commensurate with the issues facing 

the institution. As such, institutions where more examination recommendations are made would generally 

be offered more detailed technical assistance in implementing those recommendations. 

FDIC employees can advise on risk management procedures, accounting practices, recruiting 

techniques, etc., but will not actually perform tasks expected of an institution's management or 

employees. For example, FDIC employees may explain Call Report instructions as they relate to specific 

accounts, but will not assist in the preparation of an institution's Call Report. As another example, FDIC 

employees may provide information on community reinvestment opportunities, but will not recommend a 

specific transaction. 

Training and Educational Programs 

The FDIC will work with trade associations representing minority depository institutions and other 

regulatory agencies to periodically assess the need for, and provide for, training opportunities and 

educational opportunities. We will partner with the trade associations to offer training programs during 

their annual conferences and other regional meetings. 

The national coordinator and the regional coordinators will also work with trade associations and other 

organizations to attempt to identify groups that may be interested in establishing new minority depository 

institutions. FDIC representatives will be available to address such groups to discuss the application 

process, the requirements of becoming FDIC insured, and the various programs geared toward minority 

depository institutions. 

Failing Institutions 

The FDIC will attempt to preserve the minority character of failing institutions during the resolution 

process. In the event of a potential failure of a minority depository institution, the Division of Resolutions 

and Receiverships will contact all minority depository institutions nationwide that qualify to bid on failing 

institutions. The Division of Resolutions and Receiverships will solicit qualified minority depository 

institutions' interest in the failing institution, discuss the bidding process, and upon request, offer to 

provide technical assistance regarding completion of the bid forms. In addition, the Division of 

Resolutions and Receiverships, with assistance from the Office of Diversity and Economic 

OpportunityOffice of Minority and Women Inclusion, will maintain a list of minority individuals and nonbank 

entities that have expressed an interest in acquiring failing minority-owned depository institutions and 

have been pre-approved by the Division of Risk Management Supervision and the chartering authority for 

access to the FDIC’s virtual data room for online due diligence.4 . Trade associations that represent 

minority depository institutions will also be contacted periodically to help identify possible interested 

parties. 

Reporting 

The regional coordinators will report their region's activities related to this Policy Statement to the national 

coordinator quarterly. The national coordinator will compile the results of the regional offices' reports and 

submit a quarterly summary to the Office of the Chairman. Our efforts to preserve and promote minority 

ownership of depository institutions will also be highlighted in the FDIC's Annual Report. 

Internet Site 

4 Investors should also reference the FDIC’s Final Statement of Policy on Qualifications for Failed Bank Acquisitions at 

https://www.fdic.gov/regulations/laws/rules/5000-850.html#fdic5000qualforfailedbank. 
 

 

 

 

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The FDIC will create maintain a Webpage website5 on its Internet site (www.fdic.gov) to promote the 

Minority Depository InstitutionMDI Program. Among other things, the page website will describe the tools 

and resources available under the program. The website will and include the name, phone number, and 

email address of the national coordinator director, and each regional coordinator, and additional staff. 

The page website will also contain links to the list of minority depository institutions, pertinent trade 

associations, and other regulatory Federal agency programs. We The FDIC will also explore the 

feasibility and usefulness of posting other items to the page, such as statistical information and 

comparative data for minority depository institutions. Visitors will have the opportunity to provide 

feedback regarding the FDIC's program and the usefulness of the Webpagewebsite. 

By order of the Board of Directors, April 9, 2002. 

[Source: 67 Fed. Reg. 18620, April 16, 2002] 

5 https://www.fdic.gov/regulations/resources/minority/index.html 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DRAFT 

5000 - Statements of Policy 

POLICY STATEMENT REGARDING MINORITY DEPOSITORY INSTITUTIONS 

The FDIC has long recognized the importance of minority depository institutions in the financial system 

and their unique role in promoting the economic viability of minority and under-served communities. The 

FDIC has historically implemented programs to preserve and promote these financial institutions. This 

Policy Statement describes the framework the FDIC has put into place and the initiatives the FDIC will 

undertake to fulfill its statutory goals with respect to minority depository institutions (MDI Program). 

Statutory Framework 

In August 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 

1989 (FIRREA). Section 308 of FIRREA established the following goals: 

• Preserve the number of minority depository institutions; 

• Preserve the minority character in cases of merger or acquisition; 

• Provide technical assistance to prevent insolvency of institutions not now insolvent; 

• Promote and encourage creation of new minority depository institutions; and 

• Provide for training, technical assistance, and educational programs. 

Definition 

Section 308 of FIRREA defines "minority depository institution" as any Federally insured depository 

institution where 51 percent or more of the voting stock is owned by one or more "socially and 

economically disadvantaged individuals." "Minority" as defined by Section 308 of FIRREA means any 

"Black American, Native American, Hispanic American, or Asian American." Therefore, for the purposes 

of this Policy Statement, “minority depository institution” is defined as any Federally insured depository 

institution where 51 percent or more of the voting stock is owned by minority individuals. This includes 

institutions collectively owned by a group of minority individuals, such as a Native American Tribe. 

Ownership must be by U.S. citizens or permanent legal U.S. residents to be counted in determining 

minority ownership. In addition to the institutions that meet the ownership test, for the purposes of this 

Policy Statement, institutions will be considered minority depository institutions if a majority of the Board 

of Directors is minority and the community that the institution serves is predominantly minority. 

Identification of Minority Depository Institutions 

To ensure that all minority depository institutions are able to participate in the MDI Program, the FDIC will 

maintain a list of Federally insured minority depository institutions. Institutions that are not already 

identified as minority depository institutions can request to be designated as such by certifying that they 

meet the above definition. For institutions supervised directly by the FDIC, examiners will review the 

appropriateness of their inclusion on the list during the examination process. In addition, case managers 

in regional offices will note changes to the list while processing deposit insurance applications, merger 

applications, change of control notices, or failures of minority depository institutions. The FDIC will work 

closely with the other Federal regulatory agencies to ensure that institutions not directly supervised by the 

FDIC are accurately captured on the list. In addition, the FDIC will periodically provide the list to relevant 

trade associations and seek input regarding the accuracy of the list. Inclusion in the FDIC's MDI Program 

is voluntary. Any minority depository institution not wishing to participate in this Program will be removed 

from the official list upon request. 

Organizational Structure 

The FDIC has designated a national director for the FDIC's MDI Program in the Washington Office and a 

regional coordinator in each Regional Office. The national director will consult with officials from the 

following FDIC Divisions to ensure appropriate personnel are involved and resources are made available 

with regard to MDI Program initiatives: Division of Risk Management Supervision, Division of Depositor 

1 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DRAFT 

and Consumer Protection, Division of Resolutions and Receiverships, Division of Insurance and 

Research, Legal Division, and the Office of Minority and Women Inclusion. The national director will also 

consult with other organizations within the FDIC as appropriate. 

As the primary Federal regulator for State nonmember banks and State savings associations, the FDIC 

will focus its efforts on minority depository institutions with those charters. However, the national director 

will meet periodically with the other Federal banking regulators to discuss each agency's outreach efforts, 

to share ideas, and to identify opportunities where the agencies can work together to assist minority 

depository institutions. Representatives of other divisions and offices may participate in these meetings. 

Engagement with Minority Depository Institutions 

The FDIC’s MDI Program will provide for continual engagement with minority depository institutions 

through ongoing interaction with the Washington, Regional, and Field Office staff. This interaction 

includes providing technical assistance to share information and expertise on supervisory topics, outreach 

initiatives to provide opportunities for open dialogue with senior FDIC staff, and training initiatives to offer 

opportunities to gain additional knowledge about specific regulatory requirements. Further, trade 

associations affiliated with minority depository institutions serve as a significant resource in identifying 

specific interests or concerns for those institutions. 

The national director will regularly contact minority depository institution trade associations to seek 

feedback on the FDIC's efforts under the MDI Program, discuss possible training initiatives, and explore 

options for promoting and preserving minority depository institutions. The national director and the 

regional coordinators also will solicit information from trade associations and other organizations about 

groups that may be interested in establishing new minority depository institutions. FDIC representatives 

will be available to address such groups to discuss the application process, the requirements of becoming 

FDIC insured, and the various programs supporting minority depository institutions. The regional 

coordinators will contact all new minority state nonmember banks and state savings associations 

identified through insurance applications, merger applications, or change in control notices to familiarize 

the institutions with the resources available through the MDI Program. 

Technical Assistance 

Technical assistance, as defined by the FDIC’s MDI Program, is individual assistance that a regulator will 

provide to a minority depository institution in response to an institution’s request for assistance in 

understanding supervisory topics or findings. At any time, the FDIC will share information and expertise 

with bank management on various topics including, but not limited to, understanding bank regulations, 

FDIC policies, examination procedures, accounting practices, supervisory recommendations, risk 

management procedures, and compliance management procedures. In providing technical assistance, 

FDIC staff will not actually perform tasks expected of an institution's management or employees. For 

example, FDIC staff may explain Call Report instructions as they relate to specific accounts, but will not 

assist in preparing an institution's Call Report. FDIC staff may provide information on community 

reinvestment opportunities, but will not recommend a specific transaction. 

An institution can contact its field office representatives, case manager, or review examiner to request 

technical assistance. In addition, the regional coordinators and the institution’s assigned case manager 

and review examiner are knowledgeable about minority bank issues and are available to answer 

questions or to direct inquiries to the appropriate FDIC office or staff member with expertise on the 

subject for response. Case managers can explain the application process and the type of analysis and 

information required for different applications. Field office representatives also serve as a significant 

resource to minority depository institutions by readily answering examination related questions and 

explaining regulatory requirements. Other staff members within the FDIC with expertise in various 

regulatory topics will also be available to share knowledge to assist minority depository institutions in 

complying with regulations or implementing supervisory recommendations. 

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During examinations, the FDIC expects examiners to fully explain supervisory recommendations and offer 

to help management understand satisfactory methods to address such recommendations. At the 

conclusion of each examination of a minority depository institution directly supervised by the FDIC, the 

FDIC will be available to return to the institution to provide technical assistance by reviewing areas of 

concern or topics of interest to the institution. The purpose of return visits is to assist management in 

understanding and implementing examination recommendations, not to identify new problems. 

Technical assistance is a tool to provide on-going support to institutions in an effort to ensure timely 

implementation of recommendations, full understanding of regulatory requirements, and in some 

instances, the viability of the institution. Technical assistance is not a supervisory activity and is not 

intended to present additional regulatory burden. Further, examination teams will not view requests for, 

or acceptance of, technical assistance negatively when evaluating institution performance or assigning 

ratings. 

Outreach 

Outreach, as defined by the FDIC’s MDI Program, consists of FDIC representatives meeting with financial 

institutions with a primary focus of building relationships and open communication and providing 

information and resources. Outreach is generally offered by the FDIC and can include meetings between 

financial institution management and senior FDIC management. 

The FDIC maintains an MDI Subcommittee of its Advisory Committee on Community Banking (CBAC) 

comprised of executives of minority depository institutions. The MDI Subcommittee serves as a source of 

feedback on FDIC strategies to fulfill statutory goals to preserve and promote minority depository 

institutions. The MDI Subcommittee may also make recommendations or offer ideas to the CBAC for 

consideration and presentation to the FDIC. The MDI Subcommittee provides a platform for minority 

depository institutions to promote collaboration, partnerships, and best practices. The Subcommittee will 

also identify ways to highlight the work of minority depository institutions in their communities. 

Executives and staff in the FDIC’s regional offices will communicate regularly with each minority 

depository institution to outline the FDIC’s efforts to promote and preserve minority depository institutions; 

will offer annually to have a member of regional management meet with the institution’s board of directors 

to discuss issues of interest, including through roundtable discussions and training sessions; and will 

seek input regarding any training or other technical assistance the institution may desire. 

The FDIC will explore opportunities to facilitate collaboration and partnering initiatives among minority 

depository institutions or between minority depository institutions and non-minority depository institutions. 

The FDIC recognizes that by facilitating these collaborative relationships, institutions can have 

opportunities to better meet the needs of their communities. 

Training and Educational Programs 

Training and educational programs, as defined by the FDIC’s MDI program, consists of instruction 

designed to impart proficiency or skills related to a particular job, process, or regulatory policy. The FDIC 

will work with other banking regulatory agencies and trade associations representing minority depository 

institutions to periodically assess the need for, and provide for, training and educational opportunities. 

The FDIC will partner with other agencies and trade associations to offer training programs. This training 

and education can be provided in person, through webinars or conference calls, or in a conference 

setting. 

Reporting 

The regional coordinators will report regional office activities related to the MDI Program to the national 

director quarterly. The national director will develop a comprehensive report on all MDI Program activities 

and submit the report quarterly to the Chairman. The FDIC’s efforts to preserve and promote minority 

depository institutions will also be highlighted in the FDIC's Annual Report and the Annual Report to 

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Congress on the Preservation and Promotion of Minority Depository Institutions pursuant to Section 367 

of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 308 of FIRREA. 

Measuring Program Effectiveness 

The national director and the regional office staff will routinely solicit feedback from minority depository 

institutions to assess the effectiveness of the FDIC’s technical assistance, outreach, and 

training/education efforts and the MDI Program in general. The FDIC will track instances of technical 

assistance, outreach, and training and education and solicit feedback on the effectiveness of these 

activities by administering periodic surveys and holding discussions with bank management. 

Examinations 

All insured institutions must be operated in a safe and sound manner, in accordance with FDIC’s 

regulations. Likewise, all examinations must be conducted within the parameters of FDIC exam policies 

and should consistently measure the risk an institution poses to the FDIC’s deposit insurance fund. 

Notwithstanding, and consistent with the Uniform Financial Institutions Rating System (UFIRS)1 and the 

Uniform Interagency Consumer Compliance Rating System (UICCR)2, examiners are expected to 

recognize the distinctive characteristics and differences in core objectives of each financial institution and 

to consider those unique factors when evaluating an institution’s financial condition and risk management 

practices. 

Under the UFIRS and UICCR, each financial institution is assigned a composite rating based on an 

evaluation of specific components, which are also rated. For UFIRS, these component ratings reflect an 

institution’s capital adequacy, asset quality, management capabilities, earnings sufficiency, liquidity 

position, and sensitivity to market risk (commonly referred to as the CAMELS ratings). Likewise, the 

UICCR is organized under broad components that assess the institution’s board and management 

oversight, compliance program, and violations of law and consumer harm. The uniform rating systems 

and evaluation and rating criteria are specific to the examination types performed. Further, the 

assignment of the rating is based solely on the subject institution’s individual performance under the 

specific components. 

Management practices, particularly as they relate to risk management, vary considerably among financial 

institutions depending on size and sophistication, the nature and complexity of business activities, and 

risk profile. Each institution must properly manage risks and have appropriate policies, processes, or 

practices in place that management follows and uses. Activities undertaken in a less complex institution 

engaging in less sophisticated risk-taking activities may only need basic management and control 

systems compared to the detailed and formalized systems and controls used for the broader and more 

complex range of activities undertaken at a larger and more complex institution. 

Peer comparison data are not included in the rating systems. The principal reason is to avoid over 

reliance on statistical comparisons to justify the component rating being assigned. This is very important 

when evaluating minority depository institutions due to their unique characteristics. For example, many 

minority depository institutions were established to serve an otherwise under-served market. High 

profitability may not be as essential to the organizers and shareholders of the institution. Instead, 

community development, improving consumer services, and promoting banking services to the unbanked 

1 The UFIRS takes into consideration certain financial, managerial, and compliance factors that are common to all institutions. 

Compliance with laws and regulations is considered under the management component. Specialty examination findings 

(Compliance, Community Reinvestment Act, Government Security Dealers, Information Technology, Municipal Security Dealers, 

Transfer Agent, and Trust (or Fiduciary)) and the ratings assigned to those areas are taken into consideration, as appropriate, 

when assigning a composite rating and component ratings under UFIRS. 2 UICCR is a supervisory policy for evaluating financial institutions’ adherence to consumer compliance requirements. It 

provides a general framework for evaluating compliance assessment factors in order to assign a consumer compliance rating to 

each federally regulated financial institution. The consumer compliance rating reflects the effectiveness of an institution’s CMS 

to ensure compliance with consumer protection laws and regulations and reduce the risk of harm to consumers. 

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or under-banked segment of its community may drive many of the organization’s decisions. The UFIRS 

allows for consideration of the characteristics by considering not only the level of an institution’s earnings, 

but also the trend and stability of earnings, the ability to provide for adequate capital, the quality and 

sources of earnings, and the adequacy of budgeting systems. 

Examiners are instructed to consider all relevant factors when assigning a component rating. The rating 

systems are designed to reflect an assessment of the individual institution, including its size and 

sophistication, the nature and complexity of its business activities, and risk profile.3 

Failing Institutions 

The FDIC will attempt to preserve the minority character of failing institutions during the resolution 

process. In the event of a potential failure of a minority depository institution, the Division of Resolutions 

and Receiverships will contact all minority depository institutions nationwide that qualify to bid on failing 

institutions. The Division of Resolutions and Receiverships will solicit qualified minority depository 

institutions' interest in the failing institution, discuss the bidding process, and offer to provide technical 

assistance regarding completion of the bid forms. In addition, the Division of Resolutions and 

Receiverships, with assistance from the Office of Minority and Women Inclusion, will maintain a list of 

minority individuals and nonbank entities that have expressed an interest in acquiring failing minority 

depository institutions and have been pre-approved by the Division of Risk Management Supervision and 

the chartering authority for access to the FDIC’s virtual data room for online due diligence.4 

Internet Site 

The FDIC will maintain a website5 to promote the MDI Program. Among other things, the website will 

describe the tools and resources available under the program. The website will include the name, phone 

number, and email address of the national director, each regional coordinator, and additional staff. The 

website will also contain links to the list of minority depository institutions, pertinent trade associations, 

and other Federal agency programs. The FDIC will also explore the feasibility and usefulness of posting 

other items to the page, such as statistical information and comparative data for minority depository 

institutions. Visitors will have the opportunity to provide feedback regarding the FDIC's program and the 

usefulness of the website. 

By order of the Board of Directors. 

3 Peer data are used in specific examination procedures for performance testing. For example, peer data are used to determine 

whether an insured depository institution serves the credit needs of its community as required under the Community 

Reinvestment Act and its implementing regulations. 

4 Investors should also reference the FDIC’s Final Statement of Policy on Qualifications for Failed Bank Acquisitions at 

https://www.fdic.gov/regulations/laws/rules/5000-850.html#fdic5000qualforfailedbank. 5 https://www.fdic.gov/regulations/resources/minority/index.html 

5