32728 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 

47The Bureau’s previous concerns that it lacked 

authority under section 1024(b)(1)(C) were also 

applicable to section 1025(b)(1)(C). But for the 

reasons already discussed in the context of section 

1024(b)(1)(C), the Bureau no longer finds those 

arguments persuasive. 

48 12 U.S.C. 5512(b)(1). 

49 5 U.S.C. 553(b). 

50 5 U.S.C. 603(a), 604(a). 

51 44 U.S.C. 3501–3521. 

52 5 U.S.C. 801 et seq. 

1Public Law 101–73, title III, § 308, Aug. 9, 1989, 

103 Stat. 353, as amended by Public Law 111–203, 

title III, § 367(4), July 21, 2010, 124 Stat. 1556, 

codified at 12 U.S.C. 1463 note. 

consumer financial law. The analysis 

under section 1025(b)(1)(C) of the CFPA 

is otherwise similar to that under 

section 1024(b)(1)(C) of the CFPA, and 

so there is no need to repeat it here.47

The Bureau recognizes the role of the 

prudential regulators in conducting 

MLA supervision, including 

examinations, at very large banks and 

credit unions. Applicable statutes grant 

the prudential regulators broad 

supervisory and examination powers, 

which they use for various purposes, 

including assuring the safety and 

soundness of supervised institutions, 

assuring compliance with laws and 

regulations at those institutions, and 

other purposes. By contrast, the 

Bureau’s authority under section 

1025(b)(1)(C) concerns a targeted 

purpose: Detecting and assessing those 

‘‘risks to consumers’’ that are 

‘‘associated’’ with ‘‘activities subject to’’ 

Federal consumer financial laws, such 

as TILA. Conducting examinations for 

that particular purpose is distinct from 

the prudential regulators’ authority to 

conduct examinations for the purpose of 

assessing compliance with the MLA (or 

for safety and soundness or other 

purposes) —including the fact that the 

prudential regulators’ purposes are not 

based on the association with Federal 

consumer financial law discussed 

above. Even though some of the 

activities in Bureau examinations may 

be similar to activities in prudential 

regulators’ examinations, they are for a 

different purpose. Nothing in the CFPA 

or in this interpretive rule limits in any 

way, or should be deemed to limit in 

any way, the prudential regulators’ 

consumer compliance examinations of 

very large banks or credit unions, or 

their subsidiaries, for the purpose of 

assessing compliance with the MLA. 

Section 1025 has a number of 

provisions that promote coordination 

and efficiency among the Bureau and 

the prudential regulators. The agencies 

work with each other to minimize 

regulatory burden that may result from 

their complementary authorities, while 

ensuring the efficient and effective 

protection of covered borrowers. 

V. Regulatory Matters 

This is an interpretive rule issued 

under the Bureau’s authority to interpret 

the CFPA, including under section 

1022(b)(1) of CFPA, which authorizes 

guidance as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of Federal consumer 

financial laws, such as the CFPA.48

As an interpretive rule, this rule is 

exempt from the notice-and-comment 

rulemaking requirements of the 

Administrative Procedure Act.49

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not require an 

initial or final regulatory flexibility 

analysis.50 The Bureau has also 

determined that this interpretive rule 

does not impose any new or revise any 

existing recordkeeping, reporting, or 

disclosure requirements on covered 

entities or members of the public that 

would be collections of information 

requiring approval by the Office of 

Management and Budget under the 

Paperwork Reduction Act.51

Pursuant to the Congressional Review 

Act,52 the Bureau will submit a report 

containing this interpretive rule and 

other required information to the United 

States Senate, the United States House 

of Representatives, and the Comptroller 

General of the United States prior to the 

rule’s published effective date. The 

Office of Information and Regulatory 

Affairs has designated this interpretive 

rule as not a ‘‘major rule’’ as defined by 

5 U.S.C. 804(2). 

Dated: June 16, 2021. 

David Uejio, 

Acting Director, Bureau of Consumer 

Financial Protection. 

[FR Doc. 2021–13074 Filed 6–22–21; 8:45 am] 

BILLING CODE 4810–AM–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Chapter III 

RIN 3064–ZA19 

Statement of Policy Regarding Minority 

Depository Institutions 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Final statement of policy. 

SUMMARY: The FDIC is issuing its 

Statement of Policy Regarding Minority 

Depository Institutions. Section 308 of 

the Financial Institutions Reform, 

Recovery and Enforcement Act of 1989 

established several goals related to 

encouraging, assisting, and preserving 

minority depository institutions. The 

FDIC has long recognized the unique 

role and importance of minority 

depository institutions and historically 

has taken steps to preserve and 

encourage minority-owned and 

minority-led financial institutions. The 

Statement of Policy updates, 

strengthens, and clarifies the agency’s 

policies and procedures related to 

minority depository institutions. 

DATES: The Statement of Policy is 

effective August 23, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Misty Mobley, Senior Review Examiner, 

Division of Risk Management and 

Supervision, (202) 898–3771, 

mimobley@fdic.gov; Lauren Whitaker, 

Senior Attorney, (202) 898–3872, 

lwhitaker@fdic.gov; Jason Pan, Senior 

Attorney, (202) 898–7272, jpan@

fdic.gov; or Gregory Feder, Counsel, 

(202) 898–8724, gfeder@fdic.gov, Legal 

Division, Federal Deposit Insurance 

Corporation, 550 17th Street NW, 

Washington, DC 20429. For the hearing 

impaired only, TDD users may contact 

(202) 925–4618. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. The Proposed Statement of Policy 

A. Proposed Revisions 

B. Comments 

III. Final Statement of Policy Regarding 

Minority Depository Institutions 

IV. Administrative Matters 

I. Background 

Section 308 of the Financial 

Institutions Reform, Recovery, and 

Enforcement Act of 1989 (FIRREA) 1

established several goals related to 

minority depository institutions (MDIs): 

(1) Preserving the number of MDIs; (2) 

preserving the minority character in 

cases of merger or acquisition; (3) 

providing technical assistance to 

prevent insolvency of institutions not 

now insolvent; (4) promoting and 

encouraging creation of new MDIs; and 

(5) providing for training, technical 

assistance, and education programs. 

On April 3, 1990, the Board of 

Directors of the Federal Deposit 

Insurance Corporation (FDIC Board and 

FDIC, respectively) adopted the Policy 

Statement on Encouragement and 

Preservation of Minority Ownership of 

Financial Institutions (1990 Policy 

Statement). The framework for the 1990 

Policy Statement resulted from key 

provisions contained in Section 308 of 

FIRREA. The 1990 Policy Statement 

provided information to the public and 

minority banking industry regarding the 


jbell on DSKJLSW7X2PROD with RULES
Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 32729 

2 67 FR 18618 (Apr. 16, 2002). 

3See FDIC MDI research study, published June 

2019, Minority Depository Institutions: Structure, 

Performance, and Social Impact, https://

www.fdic.gov/regulations/resources/minority/2019- 

mdi-study/full.pdf. 

4See Chairman Jelena McWilliams Keynote 

Remarks, MDI and Community Development 

Financial Institution bank conference, Focus on the 

Future: Prospering in a Changing Industry (Mar. 3, 

2020), https://www.youtube.com/ 

watch?v=o0H6Ko00qTk&feature=youtu.be. 5 85 FR 60466 (Sept. 25, 2020). 

agency’s efforts in achieving the goals of 

Section 308. 

During the 1990s, many MDIs 

continued to underperform industry 

averages for profitability and experience 

failure rates that were significantly 

higher than those of the industry 

overall. In order to discuss the 

challenges that MDIs faced, and identify 

best practices and possible ways the 

regulatory agencies could promote and 

preserve MDIs, the FDIC and other 

banking regulatory agencies—with 

assistance from several minority bank 

trade associations—invited officers from 

156 MDIs to participate in a ‘‘Bankers 

and Supervisors Regulatory Forum’’ 

held in March of 2001. Approximately 

70 bankers attended. 

The FDIC also formed an 

Interdivisional Working Group to 

consider measures to modernize the 

policies and procedures related to MDIs. 

The working group incorporated many 

suggestions from the March 2001 forum 

into a revised Policy Statement 

Regarding Minority Depository 

Institutions, issued by the FDIC, after 

notice and comment, in April of 2002 

(2002 Policy Statement).2 The FDIC 

issued the 2002 Policy Statement to 

provide additional information 

regarding the FDIC’s initiatives related 

to Section 308. The 2002 Policy 

Statement provided a more structured 

framework that set forth initiatives of 

the FDIC to promote the preservation of, 

as well as to provide technical 

assistance, training, and educational 

programs for, MDIs by working with 

those institutions, their trade 

associations, and the other federal 

financial regulatory agencies. 

Over the years, the FDIC has 

continued to modify and enhance its 

MDI program to better carry out the 

FDIC’s efforts to meet the goals in 

Section 308 of FIRREA. The revisions in 

the proposed Statement of Policy are 

intended, in part, to strengthen and 

improve the various aspects of the MDI 

program and how each component of 

the MDI program is carried out by 

various responsible entities that are part 

of the MDI program. The proposed 

revisions to the 2002 Policy Statement 

reflected in the proposed Statement of 

Policy describe the FDIC’s enduring and 

strengthened commitment to, and 

engagement with, MDIs in furtherance 

of its goal of preserving and promoting 

MDIs. 

In 2019, the FDIC established a new 

MDI Subcommittee of the Advisory 

Committee on Community Banking 

(CBAC). The MDI Subcommittee held its 

inaugural meeting in December 2019. 

There are nine executives serving as 

members of the MDI Subcommittee, 

representing African American, Native 

American, Hispanic American, and 

Asian American MDIs across the 

country. The MDI Subcommittee 

provides recommendations regarding 

the FDIC’s MDI program to the CBAC for 

consideration. The MDI Subcommittee 

serves as a source of feedback with 

regard to the FDIC’s efforts to fulfill its 

statutory goals to preserve and promote 

MDIs; provides a platform for MDIs to 

promote collaboration, partnerships, 

and best practices; and identifies ways 

to highlight the work of MDIs in their 

communities. 

The FDIC published, also in 2019, an 

MDI research study, which explores 

changes in MDIs, their role in the 

financial services industry, and their 

impact on the communities they serve.3

The study period covered 2001 to 2018 

and looked at the demographics, 

structural change, geography, financial 

performance, and social impact of MDIs. 

Additionally, to discuss the 

challenges that MDIs face, provide 

information on best practices, and 

collaborate on possible ways the 

regulatory agencies can promote and 

preserve MDIs, in June of 2019, the 

FDIC hosted the Interagency MDI and 

Community Development Financial 

Institution (CDFI) Bank Conference, 

Focus on the Future: Prospering in a 

Changing Industry, in collaboration 

with the Office of the Comptroller of 

Currency and the Board of Governors of 

the Federal Reserve System. More than 

80 MDI and CDFI bankers, representing 

61 banks, attended the two-day 

conference.4

All of these various efforts by the 

FDIC to enhance its MDI program have 

informed the proposed revisions to the 

Statement of Policy. The FDIC has 

received suggestions from bankers at 

outreach and trade association meetings 

as well as feedback from the June 2019 

conference. The MDI Subcommittee has 

also provided feedback to the CBAC for 

consideration and recommendation to 

the FDIC. Many of these suggestions and 

feedback have been incorporated into 

the revised Statement of Policy. The 

following section summarizes the 

significant changes from the 2002 Policy 

Statement. 

II. The Revised Policy Statement 

A. Proposed Revisions 

On September 25, 2020, the FDIC 

published in the Federal Register 

proposed revisions to its MDI Policy 

Statement.5 The FDIC proposed changes 

in the following seven areas: 

Technical assistance and other 

engagement. The proposed Statement of 

Policy clarified that technical assistance 

is not a supervisory activity and is not 

intended to present additional 

regulatory burden. Further, the 

proposed Statement of Policy stated that 

examination teams will not view 

requests for, or acceptance of, technical 

assistance negatively when evaluating 

institution performance or assigning 

ratings. 

FDIC outreach. The proposed 

Statement of Policy was updated to 

provide additional outreach 

opportunities, including with the 

Chairman’s office and the National 

Director for Minority and Community 

Development Banking. 

MDI Subcommittee. The proposed 

Statement of Policy described the newly 

established FDIC MDI Subcommittee of 

the CBAC, which serves as source of 

feedback on FDIC strategies to fulfill 

statutory goals to preserve and promote 

MDIs. 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 

MDIs to promote collaboration, 

partnerships, and best practices. The 

MDI Subcommittee also identifies ways 

to highlight the work of MDIs in their 

communities. 

Definitions. The proposed Statement 

of Policy added definitions for terms 

used in the MDI program: Technical 

assistance; training and education; and 

outreach. Technical assistance is 

defined as individual assistance that a 

regulator will provide to a MDI in 

response to an institution’s request for 

assistance in addressing specific areas of 

concern. The proposed Statement of 

Policy also noted that technical 

assistance is a tool to provide on-going 

support to institutions in an effort to 

facilitate timely implementation of 

recommendations, full understanding of 

regulatory requirements, and in some 

instances, the viability of the institution. 

Training and education programs 

consist of instruction designed to impart 

proficiency or skills related to a 

particular job, process, or regulatory 

policy. This training and education can 

be provided in person, through 

webinars or conference calls, or in a 


jbell on DSKJLSW7X2PROD with RULES
32730 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 

6See Comments received for proposed revisions 

to Statement of Policy Regarding Minority 

Depository Institutions, available at https://

www.fdic.gov/regulations/laws/federal/2020/2020- 

statement-of-policy-minority-depositoryinstitutions-3064-za19.html. 

conference setting. Outreach 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. 

Reporting. The proposed Statement of 

Policy reflects updated reporting 

requirements applicable to the FDIC, 

including 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. The Section 367 

requirements were enacted since the 

Statement of Policy was last updated in 

2002. 

Measurement of effectiveness. The 

proposed Statement of Policy also 

established new requirements to 

measure the effectiveness of the MDI 

program. The National Director and the 

regional office staff will routinely solicit 

feedback from MDIs to assess the 

effectiveness of the FDIC’s technical 

assistance, training and education, and 

outreach efforts and the MDI program in 

general. The FDIC will track instances of 

technical assistance, training and 

education, and outreach and solicit 

feedback on the effectiveness of these 

activities by administering periodic 

surveys and holding discussions with 

bank management. 

Examinations. The proposed 

Statement of Policy added a description 

of how the FDIC applies rating systems 

to examinations of MDIs. Specifically, 

the proposed Statement of Policy 

described how the Uniform Financial 

Rating System (UFIRS) and the Uniform 

Interagency Consumer Compliance 

Rating System (UICCR) are designed to 

reflect an assessment of the individual 

institution, including its size and 

sophistication, the nature and 

complexity of its business activities, and 

its risk profile rather than a comparison 

to peer institutions 

B. Comments 

The FDIC sought comment generally 

on the proposed revisions to the 

Statement of Policy and asked six 

specific questions regarding aspects of 

the proposal. Seven comment letters 

were received.6 The comments came 

from an insured financial institution, a 

financial institution trade organization, 

a non-profit organization, a service 

provider that serves minority depository 

institutions, and individuals. 

Commenters generally supported the 

proposed revisions to the Statement of 

Policy, however, some commenters also 

made specific recommendations to the 

Statement of Policy. These comments 

are discussed in more detail below. The 

FDIC is making one change to the 

Statement of Policy in response to 

comments received. 

The FDIC received several comments 

on the methods described in the 

Statement of Policy that would be used 

to identify and provide useful 

engagement opportunities. One 

commenter suggested that additional 

technical assistance could be provided 

to MDIs in danger of failing. After 

consideration of this comment, the FDIC 

has decided not to make any related 

changes to the Statement of Policy. The 

FDIC already seeks to preserve the 

minority character of failing institutions 

before and during the resolution 

process, as required by Section 308 of 

FIRREA. Further, the FDIC provides 

ongoing supervisory oversight of 

institutions prior to failure through 

regular on-site examinations, visitations, 

off-site monitoring, and various offers to 

provide technical assistance. 

One commenter requested that the 

Statement of Policy more explicitly state 

that outreach will include national and 

state banking industry trade 

associations. Another commenter 

suggested that collaboration with state 

banking agencies might enhance 

program content, delivery, and reach. 

Such collaboration already is 

contemplated by the Statement of 

Policy, so no changes are necessary. 

However, the FDIC agrees that it would 

be useful to explicitly include national 

and state bankers associations among 

the various external organizations with 

whom the FDIC will discuss 

opportunities to collaborate, the 

challenges faced by MDIs, and other 

topics, and has made a change to the 

Statement of Policy to reflect such 

outreach. 

One group of academics suggested 

that MDI resources be centralized in a 

single location. This commenter further 

recommended that the burden of 

requesting services should be 

transferred from the MDIs to FDIC staff 

in Regional and Field offices. The FDIC 

suggests that the current structure of the 

MDI program, with a National Director 

and staff in the FDIC’s Washington 

Office, Regional Coordinators in each of 

the FDIC’s six Regional Offices, and 

additional staff in 82 Field Offices 

spread across the country, all available 

to respond to questions and to provide 

technical assistance, works well to 

provide resources to MDIs. The FDIC 

also assigns to every FDIC-supervised 

institution, of any size or ownership 

form, a case manager and a review 

examiner who are available for all 

supervisory activities or inquiries. The 

FDIC believes it is better to meet the 

needs of MDIs where they are, rather 

than in a central location, and has not 

made a change in response to these 

comments. 

The same commenter suggested more 

could be done to reach out to MDIs and 

those in the process of organizing de 

novo MDIs, specifically recommending 

an annual informational conference for 

entrepreneurs seeking to enter the 

industry. The FDIC has in place a 

number of initiatives to assist existing 

and potential future MDIs. Regional 

Directors and their staff work with MDI 

organizers to help them understand 

application requirements and processes, 

and provide technical assistance 

throughout the process. This work 

includes the National Director’s office 

and senior Regional management in the 

MDI organizer’s respective region, 

hosting conference calls with the 

organizer addressing questions 

regarding MDI designation and other 

topics. The FDIC currently is developing 

videos targeted at entrepreneurs and 

others seeking to establish an MDI. The 

Statement of Policy is intended to 

provide general principles and 

commitments from the FDIC regarding 

the MDI program. In order for the 

Statement of Policy to be a living 

document that allows the FDIC to 

prioritize different initiatives and to 

move away from unsuccessful efforts, 

the Statement of Policy does not include 

many details about specific initiatives. 

The FDIC takes notice of the 

commenter’s suggestion, but has not 

revised the Statement of Policy. 

The FDIC received several comments 

on the definitions included within the 

Statement of Policy. Two commenters 

suggested that the FDIC should broaden 

MDI eligibility in the Statement of 

Policy to include women-led 

institutions. One of these commenters 

specifically recommended that the FDIC 

should consider implementing a 

requirement that in order for an 

institution to obtain MDI status, they 

must have at least a minimum of two 

women on their executive leadership 

boards. The FDIC, in response, notes 

that the Statement of Policy closely 

follows the statutory definitions of 

‘‘minority depository institution’’ and 

‘‘minority’’ set forth in Section 308 of 

FIRREA, which does not include 


jbell on DSKJLSW7X2PROD with RULES
Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 32731 

women-owned or women-led 

institutions. Minority depository 

institutions have very unique challenges 

and serve distinct communities. The 

primary purpose of the FDIC’s MDI 

program is to promote and preserve 

these institutions and develop resources 

specific to the needs of these 

institutions. 

Another commenter recommended 

that the FDIC define the term 

‘‘predominantly minority’’ in the 

context of a community the institution 

serves. The FDIC has established MDI 

Designation Assessment Procedures, 

which will be published and included 

in the publicly available Application 

Procedures Manual. These procedures 

provide the criteria that must be met by 

institutions seeking the MDI 

designation. The procedures also 

describe the FDIC’s process for assessing 

an institution’s eligibility for the 

designation. These procedures include 

steps for performing an assessment of 

the community served by the 

institution, consisting partly of a review 

of the minority population in the 

institution’s target area. 

The FDIC also received comments 

specifically relating to the definitions 

assigned to technical assistance, 

education, and outreach. One 

commenter recommended that the FDIC 

interpret as broadly as possible the 

specific instances within each category 

(technical assistance, training and 

education, outreach) which will likely 

benefit MDIs. In measuring the 

effectiveness of the MDI program, the 

FDIC regularly solicits comments from 

MDIs regarding the usefulness and 

quality of technical assistance, outreach, 

and education and training efforts of the 

FDIC. The FDIC thus has developed an 

understanding of, and will continue to 

assess, the most beneficial resources 

made available to institutions. The 

definitions in the Statement of Policy 

provide the FDIC with the flexibility to 

meet the evolving needs of the MDI 

program and will not be changed. 

Regarding the term ‘‘technical 

assistance,’’ the FDIC received a 

comment suggesting that the FDIC use 

the term ‘‘professional consultation’’ in 

place of ‘‘technical assistance’’ to 

encourage working relationships with 

MDI executives. The FDIC responds that 

the term ‘‘technical assistance’’ is 

widely used throughout the banking 

industry and specifically set forth in 

Section 308 of FIRREA. The FDIC has 

not received any comments from 

institutions indicating they have any 

concerns with the term itself. Many 

institutions use the technical assistance 

and other resources, such as outreach, 

made available by the FDIC and have 

found the resources beneficial as they 

address challenges or require 

clarification on supervisory 

recommendations and processes as well 

as laws and regulations. 

The same commenter noted that the 

proposed Statement of Policy provides a 

statement regarding the supervisory 

impact of requests for, or acceptance of, 

technical assistance. The commenter 

noted that, while its member 

institutions did not perceive a negative 

impact that served as a barrier to 

seeking technical assistance, the 

proposed clarification is laudable. 

One commenter recommended that 

the FDIC consider whether MDIs might 

benefit from a clearly stated supervisory 

impact from participating in outreach 

activities similar to the statement 

included in the technical assistance 

definition, noting that technical 

assistance is not a supervisory activity. 

The FDIC has not received any feedback 

from MDI management indicating any 

perceived reluctance to communicate 

freely during outreach activities. 

Further, the FDIC understands the 

importance of developing strong 

working relationships with institution 

management, the development of which 

requires open communication. The 

FDIC encourages participants of all 

outreach activities to communicate any 

recommendations, questions, or 

concerns without worry of repercussion. 

The FDIC received several comments 

on the types of information regarding 

the MDI program that would be useful 

to include in annual reports or the MDI 

program website. One commenter 

suggested, to encourage MDIs to use 

resources offered by the FDIC more 

fully, that the FDIC’s annual report 

should highlight the FDIC’s efforts in 

establishing new MDIs, success stories 

with growing MDIs, how the FDIC has 

assisted struggling MDIs, and, in the 

event of a failure, how the minority 

focus of the failed MDI has been 

retained by the acquiring institution. 

The FDIC does, and will continue to, 

highlight achievements made by MDIs 

within the Annual Report to Congress 

and other publications featuring the 

activities of MDIs. These publications 

will also capture supervisory activities 

promoting the creation of new MDIs, 

including the support provided during 

the de novo application process. 

One commenter suggested the FDIC 

research the potential impact of MDIs 

on rural areas and how to successfully 

scale MDIs in rural areas. While not 

described in the proposed Statement of 

Policy, the FDIC considers the most 

pertinent studies for MDIs and the 

banking industry as a whole, as well as 

the timing of such research. The 

commenter also suggested the FDIC’s 

website organization should be designed 

for users such as entrepreneurs, new 

managers of MDIs, growing MDIs, and 

faltering MDIs. The FDIC is updating the 

MDI program website to expand the 

scope of information contained therein. 

The FDIC will develop informational 

videos promoting the creation of MDIs 

and providing education on applying for 

deposit insurance and obtaining the 

MDI designation. As noted above, the 

FDIC is developing videos specifically 

for entrepreneurs and other parties 

interested in establishing a de novo 

MDI. 

One commenter recommended the 

FDIC clarify whether the intended use 

of the results from periodic surveys and 

discussions with bank management will 

be shared with the MDI Subcommittee, 

the FDIC’s Board, and the general 

public. The FDIC notes that the results 

of the effectiveness survey and 

comments provided by institution 

management informs the MDI program 

on key areas where the MDI program 

has been successful and areas where the 

FDIC can improve program delivery. 

These findings and discussions 

strengthen the MDI program by 

identifying key resources that have been 

or could be beneficial to institutions. 

The findings of the survey are shared 

with the MDI Subcommittee, CBAC, and 

the FDIC Board. The FDIC may consider 

including summary survey information 

in the Annual Report to Congress. 

The FDIC received comments on 

methods to identify and provide 

technical assistance, outreach, and 

training education and resources that 

would be beneficial to minority 

depository institutions. One commenter 

suggested expanding the training and 

educational programs portion of the 

Engagement with MDIs section of the 

Statement of Policy to specifically 

include virtual environments and the 

services of private organizations in 

order to ensure that MDIs have a wide 

variety of solutions to meet their needs. 

The FDIC develops training material on 

laws, regulations, and guidance 

pertinent to the financial institutions it 

supervises. Any private companies 

interested in providing training to MDIs 

can contact trade associations or 

institutions directly. 


jbell on DSKJLSW7X2PROD with RULES
32732 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 

One commenter suggested the FDIC 

facilitate training and education through 

written materials, such as manuals or 

whitepapers. The FDIC is evaluating 

options for additional training and 

education resources. The FDIC will 

engage the MDI Subcommittee to seek 

its ideas on topics and alternative 

methods of providing training and 

education material. 

Finally, one commenter urged the 

FDIC to play a larger role in addressing 

the challenges facing minority 

communities, including racial gaps in 

financial and economic opportunity. 

The Statement of Policy focuses on 

strategies to facilitate the viability of 

MDIs to enable MDIs to serve their 

communities. As noted above, the FDIC 

recognizes the importance of the 

broader societal issues and, indeed, is 

taking steps to address them, but 

revisions to the rules implementing the 

Community Reinvestment Act, 

enforcing the law against predatory 

lenders, and bank staff diversity are 

beyond the scope of the Statement of 

Policy. 

III. Final Statement of Policy Regarding 

Minority Depository Institutions 

The text of the Statement of Policy 

follows: 

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 

historically has implemented programs 

to preserve and promote these financial 

institutions. This Statement of Policy 

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. 

Definitions 

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 Statement of Policy, ‘‘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 Statement 

of Policy, institutions will be considered 

minority depository institutions if a 

majority of the Board of Directors 

consists of minority individuals 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 banking regulators to capture 

accurately on the list institutions not 

directly supervised by the FDIC. 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 the MDI 

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 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, 

including national and state bankers’ 


jbell on DSKJLSW7X2PROD with RULES
Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 32733 

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. 

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) composed 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 nonminority 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, 

consist 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 federal 

banking 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 


jbell on DSKJLSW7X2PROD with RULES
32734 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations 

7 44 U.S.C. 3501, et seq. 

8 5 CFR 1320.3(b)(2). 

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) and 

the Uniform Interagency Consumer 

Compliance Rating System (UICCR), 

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, 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 need only 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. Avoiding such overreliance 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 underbanked 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. 

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. 

Internet Site 

The FDIC will maintain a website 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. 

IV. Administrative Law Matters 

The Paperwork Reduction Act of 1995 

(PRA) 7 states that no agency may 

conduct or sponsor, and no respondent 

is required to respond to, an information 

collection unless it displays a currently 

valid Office of Management and Budget 

(OMB) control number. 

The Statement of Policy Regarding 

Minority Depository Institutions does 

not create any new or revise any 

existing information collections 

pursuant to the PRA. Rather, any 

reporting, recordkeeping, or disclosure 

activities mentioned in the Statement of 

Policy Regarding Minority Depository 

Institutions are usual and customary 

and should occur in the normal course 

of business as defined in the PRA.8

Consequently, no submissions will be 

made to the OMB for review. No 

comments were received regarding PRA 

or other burdens. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on June 15, 2021. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2021–12972 Filed 6–22–21; 8:45 am] 

BILLING CODE 6714–01–P 


jbell on DSKJLSW7X2PROD with RULES