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Fed clarifies MDI definition

The Federal Reserve Board has issued Supervision and Regulation Letter 21-6 (also issued as Consumer Affairs Letter 21-4) with clarified guidance as it relates to definitions for minority depository institutions (MDIs), expanded the MDI definition to include women-owned financial institutions, and highlighted resources available to MDIs through its Partnership for Progress (PFP) program.

The PFP program is the Federal Reserve's national MDI outreach program and implements efforts to preserve and promote MDIs. Since its creation in 2008, the program has provided MDIs with resources to help them operate in a safe-and-sound manner, adhere to laws that protect consumers, and meet Federal Reserve Board supervisory standards. PFP program staff engages with MDIs by conducting outreach and providing technical assistance, training, education, and convenings for MDIs. By law, the term "minority" means any Black American, Native American, Hispanic American, or Asian American. The System's definition of MDI is consistent with the statutory definition of "minority bank," and states that an MDI is any depository institution where a majority of the voting stock is owned by one or more socially and economically disadvantaged individuals.

The System's definition of MDI also recognizes women’s depository institutions, and the System will provide women’s depository institutions with the same PFP resources as other MDIs. The System’s definition of “women’s depository institution” is consistent with the definition of this term in the Community Reinvestment Act, and includes any depository institution (a) in which more than 50 percent of the ownership or control of which is held by 1 or more women; (b) more than 50 percent of the net profit or loss of which accrues to 1 or more women; and (c) a significant percentage of senior management positions of which are held by women.

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