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ICBA strongly supports Section 308 of the Financial Institution Reform Recovery Enforcement Act (FIRREA), which establishes goals for federal banking agencies to promote, create, and preserve the number and character of minority depository institutions (MDIs).
ICBA supports regulations that take into account the unique model of minority banks and the communities they serve.
ICBA supports giving minority banks the first right to bid on the assets and deposits of a failed minority bank and giving them greater consideration or weighting over non-MDI bids.
ICBA appreciates the federal banking agencies efforts to encourage collaborative relationships and partnerships between minority banks and community banks at large for financial support, lending activities, or technical assistance.
ICBA supports legislation that would create and strengthen federal programs that provide capital, investments, technical assistance, and mentorship to minority banks, promote de novo minority banks, create a new “Impact Designation” for banks with a specified percentage of loans extended to low-income borrowers, streamline the CDFI certification process for MDIs, and otherwise help MDIs better serve their customers and communities.
ICBA advocates for the exemption of minority depository institutions from documenting compliance with CRA regulations. A streamlined approach should be available for certified community development financial institutions.
ICBA supports and encourages opportunities for minority banks to partner with private sector entities for investment, technical assistance, and product/service discounts. ICBA also supports additional resources and education programs that focus on areas unique to minority banks.
Minority depository institutions (“MDI” or minority banks) play a unique role serving as catalysts for economic growth and revitalization in the neighborhoods they serve.
These banks often play a critical role in providing credit, capital and financial services to low-to-moderate income and minority communities in urban, rural and suburban areas that are economically distressed and have historically been underserved by the financial industry.
Minority banks know and understand the culture of the communities they serve and are able to provide customized and culturally sensitive products and services. They finance small businesses, make housing affordable, revitalize community facilities, and provide financial literacy and technical assistance to their customers.
Minority banks are committed to the social mission of helping to improve lives and stabilize neighborhoods despite the difficulties and challenges of operating in distressed communities. It is crucial that minority banks have the legislative, regulatory, and financial support they need to stay operational and profitable.
ICBA will promote legislation to help existing MDIs serve their communities, grow, and thrive as well as to foster the creation of new MDIs. ICBA will work with the OCC, FDIC, and the Federal Reserve to improve their minority bank programs and identify opportunities for minority banks to collaborate or partner with larger community banks or private entities. Banks may receive Community Reinvestment Act credit considerations for direct investments, loan participations, sharing of bank staff and resources, and information sharing with minority banks.
ICBA believes that CRA regulations should exempt MDIs from documentation and full-scope examinations, thereby supporting these institutions through compliance relief. The mission of MDIs is fully consistent with the CRA, and excessive compliance burden should not keep MDIs from pursing this mission.
Staff Contacts: Kianga Lee, Rhonda Thomas-Whitley, and Susan Sullivan