The Federal Deposit Insurance Corporation (FDIC) approved a new proposed statement of policy to enhance efforts to encourage and preserve Minority Depository Institutions (MDIs).
The FDIC said the changes would update, strengthen and clarify policies and procedures related to the existing MDI framework.
Specifically, the FDIC said in a release that the proposed revisions described the initiatives the FDIC has taken and will take to promote the preservation of MDIs and enhance communication between the FDIC and these minority-owned and managed institutions. The proposed statement also would define the program terms for technical assistance, training, education and outreach. Finally, it offers an explanation of how the FDIC applies examination standards in assessing the performance of MDIs.
The text of the proposed statement is: “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.”
The FDIC will take comments on the proposal over a 60-day period.
Over the years, the FDIC has continued to modify and enhance its MDI program to better meet its statutory goals, the release stated. Last updated in 2002, the FDIC’s statement regarding MDIs detailed the framework by which the FDIC implements the goals set forth in The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and administers its MDI program to meet those goals.
The revisions are intended in part to strengthen and improve various aspects of the MDI program to reflect the FDIC’s enduring and strengthened commitment to preserve and promote MDIs, the agency stated.
FIRREA established several goals related to MDIs:
- Preserving the number of minority depository institutions;
- Preserving the minority character in cases of merger or acquisition;
- Providing technical assistance to prevent insolvency of institutions not now insolvent;
- Promoting and encouraging creation of new minority depository institutions; and
- Providing for training, technical assistance and education programs.