Minority Depository Institutions Program
Preservation and Promotion of Minority Depository Institutions
The Federal Deposit Insurance Corporation Report to Congress for 2015

Failing Institutions

In accordance with Section 308 and FDIC Policy, the FDIC seeks to preserve the minority character of failing institutions before and during the resolution process. The FDIC provides ongoing supervisory oversight of troubled institutions, through regular onsite examinations, visitations and off-site monitoring, as well as through numerous offers of technical assistance.

In the event of a potential failure of an MDI, the FDIC contacts all MDIs nationwide that qualify to bid on failing institutions. The FDIC solicits qualified MDIs’ interest in the failing institution and discusses the bidding process. The FDIC also will provide technical assistance regarding completion of the bid forms. During the resolution process, institutions on the final bidders list must be cleared by the appropriate Federal and State regulators.

As noted earlier, three FDIC-insured minority depository institutions failed in 2015 and in all three cases, the least cost bidder for the failed bank franchise was not an MDI. This experience was an anomaly, as the FDIC historically has been able to solicit sufficient MDI bidder interest to preserve the minority character in failures. Between 2002 and 2014, almost two-thirds of the assets of the merged institutions and about 87 percent of the assets of failed institutions remained with MDI acquirers.