Preservation and Promotion of Minority Depository Institutions – FDIC Report to Congress for 2019

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On June 10, 2020, the Federal Deposit Insurance Corporation (FDIC) issued its 2019 Report to Congress on efforts to preserve and promote minority depository institutions (MDI).  The report provides a summary profile of MDIs and details of 2019 FDIC initiatives to support MDIs.

As of December 31, 2019, there were 144 FDIC-insured MDIs with combined total assets of approximately $249 billion. These institutions employed over 36,000 workers. The FDIC is the primary federal regulator for 96 MDIs (67 percent), while the Office of the Comptroller of the Currency (OCC) and the Federal Reserve (FRB) are the primary federal regulator for 33 (23 percent) and 15 (10 percent) of MDIs, respectively. The number of FDIC-insured MDIs declined by five institutions during the year, although MDI assets increased by $15 billion. At the end of 2019, 73 (51 percent) of MDIs were controlled by Asian or Pacific Islanders, 33 (23 percent) by Hispanic Americans, 21 (14 percent) by African-Americans, and 17 (21 percent) by Native Americans.

MDI financial performance declined slightly during 2019, although approximately 85 percent of MDIs remained profitable. Unprofitable institutions were typically smaller institutions and often serve low- and moderate-income (LMI) areas in urban or rural markets. Only one MDI was less than adequately capitalized at year-end. As with community banks, MDI liabilities are primarily core deposits. MDI asset structures also resemble those of community banks, although MDIs have a greater concentration in commercial real estate (CRE), with more than 60 percent of MDIs classified as CRE specialists.

In 2019, the FDIC contributed to the preservation and promotion of MDIs by:

  • Updating their research report, Minority Depository Institutions: Structure, Performance, and Social Impact;
  • Hosting roundtable discussions to facilitate greater collaboration between large banks and MDIs serving LMI communities;
  • Establishing an MDI Subcommittee of the Advisory Committee on Community Banking;
  • Hosting or participating in workshops, webinars, and conferences promoting MDI development; and
  • Offering technical assistance to MDIs both directly and through outreach to their trade associations.

Since MDIs help provide access to credit in historically underserved communities, partnerships with MDIs can assist larger institutions in meeting both CRA and fair lending goals, especially in metropolitan areas.