Meaning of MDI
The OCC defines an MDI to include a national bank or federal stock savings association that is at least 51% owned by one or more minority individuals, women, or other socially and economically disadvantaged individuals. An MDI also includes a federal mutual savings association (1) where minority individuals comprise a majority of the Board of Directors and its account holders and (2) that serves the credit and other economic needs of a community predominantly of minority individuals. A federal mutual savings association is also considered to be an MDI if (1) a majority of its Board of Directors is comprised of minority individuals, women, or other socially and economically disadvantaged individuals, and (2) minority individuals, women, or other socially and economically disadvantaged individuals hold a significant percentage of its senior management positions.
The revised policy statement clarifies the use of the term “minority individual” to mean African Americans, Asian Americans, Hispanic Americans, and Native Americans; and clarifies the use of the term “minority” to mean minority individuals, women, and other socially and economically disadvantaged individuals. In addition, the revision adds a minority account holder element to the description of federal mutual savings association. The revised policy statement streamlines and clarifies the meaning of an MDI, but the OCC does not intend for the definitional revisions to have a substantive effect.
Formation, Designation, and Ongoing Review
The process of forming a de novo bank that is designated as an MDI or, on the other hand, receiving an MDI designation as an existing bank, is rather simple. For individuals interested in forming a de novo bank, the applicant must (1) file an application and receive approval to form a bank, and (2) request that the bank be designated as an MDI. If the OCC determines that all the applicable requirements are met, the OCC will provide (1) a letter approving the formation of a bank and (2) a separate MDI designation letter. An existing bank that believes it satisfies the meaning of MDI, as set forth above, may request that the OCC designate it as an MDI. If the OCC determines the bank satisfies the meaning of MDI, the agency will provide the bank with an MDI designation letter.
At its discretion, the OCC may continue to designate as an MDI a bank that no longer satisfies the meaning of MDI if the bank supports the economic viability of a community comprised predominantly of minority individuals, women, or other socially and economically disadvantaged individuals. A bank that no longer satisfies the meaning of MDI is one that falls below the 51% ownership threshold. On an annual basis, the OCC reviews whether banks continue to satisfy the meaning of MDI or if continued designation is appropriate.
Support for MDIs
The OCC develops an annual strategy to support the financial vitality and safe and sound operations of MDIs and to address unique risks MDIs face. Specifically, the OCC supports MDIs by providing training, technical assistance, and educational programs in such areas as compliance, risk management, and operations.
Further, the OCC recognizes that depository institutions that are not MDIs (a.k.a. non-minority depository institutions or NMDIs) can be key partners with MDIs, and it supports these relationships, which can be valuable tools for assisting MDIs. The OCC also provides resources to help identify relevant partnership opportunities. In assessing the record of an NMDI under the Community Reinvestment Act (CRA) and its implementing regulations, the OCC considers capital investments, loan participations, and other ventures undertaken in cooperation with minority- and women-owned financial institutions and low-income credit unions if such activities help meet the credit needs of the local communities served by the MDI or low-income credit union. NMDIs that invest in MDIs may receive positive consideration under the CRA if those investments are consistent with the requirements of the CRA and its implementing regulations.