The 2019 Interagency Minority Depository Institution and CDFI Bank Conference
Focus on the Future: Prospering in a Changing Industry
Sponsored by The FDIC, Federal Reserve Board, and Office of the Comptroller of the Currency
Agenda (As of June 21, 2019)
Tuesday, June 25, 2019
Join FDIC, OCC and Federal Reserve leaders for a critical conversation about each agency’s role in preserving and promoting minority depository institutions (MDIs). After brief opening remarks, all leaders will engage in an interactive dialogue, followed by a question and answer period with bank CEOs. They will reflect on the key role MDIs play in serving their communities, resources available to MDIs, actions taken by the agencies to preserve and promote MDIs, and their thoughts for moving forward.
CEOs must be strategic and thoughtful in their approach to their customers, employees, and communities in order to succeed in today’s marketplace. This panel of MDI and community development financial institution (CDFI) CEOs will discuss top leadership issues, current trends in banking, as well as what they see they will need to compete in the future. They will share their thoughts on the challenges and opportunities MDIs should consider as technology continues to evolve, and what tools can be used to meet customers and employee needs.
Changes in the competitive landscape make it critical for banks to continually stay up to date on issues in the regulatory environment. In this session, hear from top regulatory officials about trending topics that are pertinent for MDIs. They will discuss current issues and challenges facing these banks today, as well as how the regulatory environment will affect community banking and MDIs in the years ahead.
Choose one of the following three workshops:
Workshop 1A: Cybersecurity Threat Monitoring, Tools and Resources
Cyber threats are a major risk to the banking system, and community banks have a role in monitoring and information sharing. This workshop provides an overview of tools and resources for bankers designed to assist in financial sector resilience, many of them free of charge, which can help MDIs bolster their cyber protection.
Workshop 1B: Understanding MDIs and Their Markets – A Research Discussion
MDIs are a diverse set of institutions serving diverse communities around the country. In order to better understand MDIs and their markets, the Federal Reserve has been commissioning and producing new research on MDIs over the past several years. This session will present some of the recent research findings from the Federal Reserve, as well as encourage discussion of what additional research is needed and would be impactful for MDIs.
Workshop 1C: Federal Programs Supporting MDIs
Hear directly from the experts running federal programs that can help build capacity in MDIs. Additionally, participants will have the opportunity to learn how best to leverage federal products that will spur small business growth, development and lending.
Choose one of the following three workshops:
Workshop 2A: Succession Management
Minority depository institutions and CDFI banks, like many community banks, face challenges with regard to succession management and human capital development. This panel will share a variety of strategies to identify potential leaders for their institutions and to enable them to gain the experience they will need to carry out these roles. The panel will discuss their challenges and successes in attracting, developing, and retaining the next generation of bank leaders and managers.
Workshop 2B: A Peer Dialogue on the Benefits of Participating in the CDFI Fund’s Programs
Since its creation in 1994, the CDFI Fund has awarded more than $3.3 billion to CDFIs, community development organizations, and financial institutions through its monetary award programs, and allocated $54 billion in New Markets Tax Credits. In this session, MDIs and CDFI banks will discuss how their institutions have benefitted from the following CDFI Fund programs, including lessons learned: Bank Enterprise Award Program, Capital Magnet Fund, CDFI Program, and New Markets Tax Credit Program.
Workshop 2C: Preserving the Minority Character: FDIC Franchise Marketing Updates
This session highlights how the FDIC works to support the statutory goal ’to preserve the minority character in cases involving merger or acquisition of an MDI.’ The FDIC markets failed bank franchises to other eligible insured banks, and MDIs have special benefits that help to preserve the minority character in the local banking community when an MDI fails. The FDIC does not expect significant failure activity in the near future, but this session offers an opportunity for institutions that have never considered bidding on a failing institution to learn more about the process. In addition, the FDIC recently updated its franchise marketing documents and this is an opportunity for experienced bidders to learn more about the updated process.
Location: Sheila C. Bair Auditorium Foyer
Wednesday, June 26, 2019
Mark Pearce, Director, Division of Depositor and Consumer Protection, FDIC
Arthur W. Lindo, Deputy Director of Policy, Federal Reserve Board
Morris Morgan, Senior Deputy Comptroller and Chief Operating Officer, OCC
Technological advances, together with evolving consumer preferences, are reshaping the financial services industry at an accelerated pace. New technology firms have entered the financial service space and are delivering banking services directly to consumers. Although banks have a long history of adapting to new technology and introducing innovative products and services, it is beneficial that banks understand the impact of the evolving landscape on their business strategies and leverage their unique advantages so they can continue to meet the needs of their customers, businesses, and communities. This plenary session will provide MDI and CDFI banks with an understanding of the evolving financial services landscape and explore examples of successful responses by community and midsize banks.
MDIs and CDFI banks play an important role across the country supporting the financial needs of businesses, communities, and families. They face challenges in providing the competitive products and services their customers expect, and they compete with other traditional and nontraditional financial service providers that are expanding their activities. Collaboration can help unlock opportunities for community banks to manage expenses and meet regulatory requirements that may require specialized expertise. This session explores the benefits of collaboration, describes how minority-owned and CDFI banks can structure collaborative arrangements, and provides examples of how institutions can work together to support minority consumers.
The FDIC recently updated and expanded upon its 2014 study, Minority Depository Institutions: Structure, Performance, and Social Impact. This session will highlight the results of the study, including trends in the structure, financial performance, and social impact of MDIs. New elements of the study include differences between urban and rural MDIs, and analysis of MDI participation in small business lending programs.
There is likely an Opportunity Zone (OZ) in the service area of most, if not all, of the MDI and CDFI banks. What role should MDI and CDFI banks play in OZ transactions? How can OZs benefit the communities in which the MDI and CDFI banks do business?
This extended session will consist of a moderated discussion that explores how some have attempted to “find their lane” with respect to OZs. Resources to support that discussion include banks that have participated in OZ transactions, Opportunity Fund managers connecting investors and deals, and professionals with technical knowledge of the program. While a very brief overview of OZs is planned, this is not a presentation/discussion on the mechanics of the program. Instead, it is a discussion among peers on potential business strategy approaches that capitalize on the OZ tax provision.
This workshop will be structured as a peer-to-peer dialogue so participants can learn from other MDIs and CDFI banks about the various ways they have successfully participated in the New Markets Tax Credit Program. The workshop will also include an investor that has financed MDI and CDFI banks’ NMTC projects.
The New Markets Tax Credit program reinvigorates economically distressed communities by attracting private investment capital, generating an estimated $8 of private investment for every $1 of federal funding. Individual and corporate investors receive a tax credit against their federal income tax in exchange for making equity investments in Community Development Entities to finance businesses in underserved low-income communities. The credit totals 39 percent of the original investment amount and is claimed over a period of seven years.