The Federal Deposit Insurance Corp. is establishing an office to oversee agency efforts to get more capital to minority-owned banks and community development financial institutions.
The Office of Minority and Community Development Banking “will further promote private sector investments in low- and moderate-income communities,” the FDIC said in a press release Tuesday. The office follows the
“Mission driven banks are the financial lifeblood of their communities, enabling individuals and minority-owned small businesses to securely build savings and obtain credit,” FDIC Chair Jelena McWilliams said in the press release. “By establishing the Office of Minority and Community Development Banking, we expand our engagement and collaboration in support of these institutions as part of a broader commitment to increasing financial inclusion.”
Since 2018, the FDIC has taken several steps to expand the agency’s minority depository institutions program, including raising awareness of the role that minority-owned banks play in the communities they serve, publishing a report on the impact of such banks over an 18-year period and creating a subcommittee that provides guidance to the FDIC’s advisory committee on community banking about the agency’s minority depository institutions program.
Seven weeks ago, the agency launched the Mission-Driven Bank Fund, which is backed by Truist Financial and Microsoft. The companies, along with Discovery Inc., committed $120 million in initial funding.
Truist and Microsoft are hiring a private-sector fund manager. The FDIC will act as an advisor, but it will not make any funding decisions or investment decisions, McWilliams has said.
