FDIC proposes revisions to policy statement on minority depository institutions

Revisions to its policy statement on how the agency will encourage and preserve minority depository institutions (MDIs) – including, among other things, in the area of technical assistance – were proposed by the Federal Deposit Insurance Corp. (FDIC) Monday.

In a Financial Institution Letter (FIL), the federal bank deposit insurer said the proposed changes would “update, strengthen, and clarify the FDIC’s policies and procedures related to the existing framework for preservation and promotion of MDIs.”

The proposed revisions are out for a 60-day comment period that begins upon their publication in the Federal Register. According to the Register notice, areas slated for change are:

  • Technical assistance and other engagement: The proposed statement adds definitions for adds definitions for terms used in the MDI program, including technical assistance, training and education, and outreach. It clarifies that technical assistance is not a supervisory activity and is not intended to present additional regulatory burden. Further, it states that examination teams will not view requests for, or acceptance of, technical assistance negatively when evaluating institution performance or assigning ratings.
  • FDIC outreach: The proposed statement was updated to provide additional outreach opportunities, including with the FDIC chairman’s office and the National Director for Minority and Community Development Banking.
  • MDI Subcommittee: The proposed statement describes the newly established FDIC MDI Subcommittee of the Advisory Committee on Community Banking (CBAC), which serves as source of feedback on FDIC strategies to fulfill statutory goals to preserve and promote MDIs. The MDI Subcommittee may also make recommendations or offer ideas to the CBAC for consideration and presentation to the FDIC. It provides a platform for MDIs to promote collaboration, partnerships, and best practices; and identifies ways to highlight the work of MDIs in their communities.
  • Examinations: The proposed statement adds a description of how the FDIC applies rating systems at examinations of MDIs. The FDIC said the policy will describe how the Uniform Financial Rating System (UFIRS) and the Uniform Interagency Consumer Compliance Rating System (UICCR) are designed to reflect an assessment of the individual institution, including its size and sophistication, the nature and complexity of its business activities, and its risk profile rather than a comparison to peer institutions.

FDIC FIL-80-2020