FDIC Definition of Minority Depository Institution

Section 308 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) requires the Secretary of the Treasury to consult with the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, and the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation on methods for best achieving certain goals for preserving existing minority depository institutions and promoting creation of new MDIs, including providing training and technical assistance. Section 308 of FIRREA defines the term "minority depository institution" as any depository institution where 51 percent or more of the stock is owned by one or more "socially and economically disadvantaged individuals."

Given the ambiguous nature of the phrase "socially and economically disadvantaged individuals," the FDIC's Policy Statement defines "minority depository institution" as any Federally insured depository institution where 51 percent or more of the voting stock is owned by minority individuals. "Minority" as defined by Section 308 of FIRREA means any "Black American, Asian American, Hispanic American, or Native American." The voting stock must be held by U.S. citizens or permanent legal U.S. residents to be counted in determining minority ownership.

In addition to institutions that meet the ownership test, institutions will be considered minority depository institutions if a majority of the Board of Directors is minority and the community that the institution serves is predominantly minority. Institutions that are not already identified as minority depository institutions can request to be designated as such by certifying that they meet the above definition. Institutions interested in the MDI designation should contact the National Director of the FDIC's Minority Depository Institutions Program.