Minority Depository Institutions

Minority depository institutions play a unique and critical role serving as catalysts for economic growth and revitalization to low-to-moderate income and minority communities. These banks provide credit, capital and financial services to neighborhoods that are economically distressed and/or have historically been underserved by the financial industry.

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Position & Background

ICBA supports a regulatory framework that accommodates and promotes the unique business model, markets and portfolio of minority depository institutions (MDIs or minority banks).
ICBA advocates for the exemption of MDIs from documenting compliance with Community Reinvestment Act (CRA) regulations or a streamlined approach with a presumed rating of “satisfactory.” MDIs should receive CRA credit for supporting other MDIs.
ICBA supports legislation that would create and strengthen federal programs that provide capital, investments, deposits, and technical assistance; promote de novo MDIs; streamline the CDFI certification process for MDIs; mentorship programs for MDIs; and otherwise help MDIs better serve their customers and communities.
ICBA encourages regulators to incorporate the distinct characteristics and objectives of MDIs into their examination manuals. Additionally, we support a requirement that at least one field examiner possess experience with MDI portfolios during examinations.
ICBA supports collaborative, mutually beneficial relationships between minority banks and other community banks.
ICBA strongly supports the existence of the FDIC’s MDI Subcommittee of the Advisory Committee on Community Banking and the OCC’s Minority Depository Institutions Advisory Committee.
ICBA supports tax incentives to encourage deposits and investments in MDIs. (See Tax Policy resolution above.)

Minority depository institutions (MDIs) play a vital role in fostering economic growth and revitalizing low-to-moderate income and minority communities. These institutions provide credit, capital, and financial services to historically underserved areas, offering culturally informed products tailored to community needs. They support small businesses, affordable housing, and community development while delivering financial education and technical assistance.

To ensure their sustainability and growth, MDIs require strong legislative, regulatory, and financial support. ICBA advocates for reducing compliance burdens, expanding access to capital, and promoting

Section 308 of FIRREA, which directs federal agencies to preserve and strengthen MDIs. These efforts will enable MDIs to continue serving their communities and foster the creation of new institutions.