Federal Reserve Board clarifies guidance as it relates to definitions for minority depository institutions.
WASHINGTON, DC (STL.News) The Federal Reserve on Friday clarified guidance as it relates to definitions for minority depository institutions (MDIs), expanded the MDI definition to include women-owned financial institutions, and highlighted resources available to MDIs through its Partnership for Progress (PFP) program. The Federal Reserve System supports an inclusive financial system and understands the challenges inherent in providing access to credit and other financial services in traditionally underserved areas. The System remains strongly committed to identifying and carrying through all opportunities to support MDIs, consistent with its statutory mandates.
The PFP program is the Federal Reserve’s national MDI outreach program and implements efforts to preserve and promote MDIs. Since its creation in 2008, the program has provided MDIs with resources to help them operate safely, adhere to laws that protect consumers, and meet Federal Reserve Board supervisory standards. PFP program staff engages with MDIs by conducting outreach and providing technical assistance, training, education, and convenings for MDIs.
By law, the term “minority” means any Black American, Native American, Hispanic American, or Asian American. The System’s definition of MDI is consistent with the statutory definition of “minority bank” and states that an MDI is any depository institution where most voting stock is owned by one or more socially and economically disadvantaged individuals.
In addition to institutions that meet that qualifying criterion, the System considers an institution to be an MDI if most of its board of directors consists of minority individuals and the community that the institution serves is predominantly minority.
In addition to the statutory provisions, the System’s definition of MDI recognizes women’s depository institutions and will provide women’s depository institutions with the same PFP resources as other MDIs. The System’s definition of “women’s depository institution” is consistent with the definition of this term in the Community Reinvestment Act and includes any depository institution where a majority of ownership or a majority of revenue is held by at least one woman and a significant percentage of senior management positions of which are held by women.
The PFP website (www.fedpartnership.gov) is maintained as a primary resource for providing updates to MDIs and System supervisory staff concerning the program and any enhancements to it.
Released March 5, 2021