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FDIC Federal Register Citations

February 25, 2002

Mr. Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th St, NW
Washington, DC 20429
Attention:     Comments/OES

RE: FDIC Minority-Owned Institution Policy Revision

Dear Mr. Feldman:

The purpose of this letter is to provide comments on the above referenced matter. The area of concern that I have relates to failed minority owned institutions. It is my opinion that the FDIC should have a defined process in which it works with the nearest other minority bank in assisting that institution in taking over the assets of the failed institution.

It is my understanding that the new policy takes into account the decision of the United States Supreme Court in Adarand Constructors, Inc. v. Pena, 115 S. Ct. 2097 (1995) and the statutory requirement that failed institutions be resolved in a manner that results in the least cost to the insurance fund. Both Adarand and the statutory requirement have greatly reduced the FDIC's ability to give preference to other minority institutions.

While these additional restraints exist, the FDIC should make every effort to determine methods in which other minority institutions are allowed to fully participate in the process. Some suggested methods include notifying each minority institution as soon as the failure occurs. Another method would be to notify National Bankers Association (NBA) officials so that the information can be disseminated among NBA members.

If further information is required, please do not hesitate to contact me at (919) 683-1521 Ext. 812.

Thank you for your consideration.

Lee Johnson, Jr.
President and CEO
Mechanics and Farmers Bank
Durham, NC
Last Updated 03/08/2002

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