The stand-up of the Mission-Driven Bank Fund by the federal agency that insures bank deposits has made some strides, with a financial advisor and two law firms now engaged to develop the fund’s framework, structure, and concept of operations, the agency chairman said Monday.
If all goes as intended, the fund, created to facilitate capital investments in minority depository institution (MDI) and community development financial institution (CDFI) banks, may be ready to accept pitches to investors in the third quarter, Jelena McWilliams, chairman of the Federal Deposit Insurance Corp. (FDIC) Board, said during remarks Monday before the National Community Investment Fund Conference.
The concept for the fund was announced last year by the Federal Deposit Insurance Corp. (FDIC) and a competition held for the selection of a firm or firms that would manage the fund.
McWilliams reiterated Monday that her agency will have no role in managing the fund or deciding its investments.
She said that some 70 MDI and CDFI bank executives provided input during the fund development phase and that the agency has also worked to get feedback from anchor investors and prospective corporate and philanthropic investors.
“Our goal is for the anchor investors to hire a fund manager in the second quarter, conduct a fundraising round, and be prepared for the fund to accept pitches from MDIs and CDFIs in the third quarter,” she said.
McWilliams said that one of the objectives in establishing the fund was to create the opportunity for MDIs and CDFIs to make pitches for funding tailored to their business models, strategic plans, and vision for building the future. “We also are incorporating a feature for the fund manager to make available advisory services including strategic, financial, operations, and technology consulting support to complement the capital investments provided by the fund,” she said.
McWilliams shared the hope that the Mission-Driven Bank Fund, as well as the Treasury Emergency Economic Capital Investment Program (ECIP), “will help provide an opportunity for communities in need.”