Congressional Record, Volume 166 Issue 7 (Monday, January 13, 2020)

[Congressional Record Volume 166, Number 7 (Monday, January 13, 2020)]
[House]
[Pages H192-H194]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

EXPANDING OPPORTUNITY FOR MINORITY DEPOSITORY INSTITUTIONS ACT

Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 5315) to amend the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 to establish a Financial Agent Mentor-
Protege Program within the Department of the Treasury, and for other
purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 5315

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Expanding Opportunity for
Minority Depository Institutions Act'' or the ``Expanding
Opportunity for MDIs Act''.

SEC. 2. ESTABLISHMENT OF FINANCIAL AGENT MENTOR-PROTEGE
PROGRAM.

(a) In General.--Section 308 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463
note) is amended by adding at the end the following new
subsection:
``(d) Financial Agent Mentor-Protege Program.--
``(1) In general.--The Secretary of the Treasury shall
establish a program to be known as the `Financial Agent
Mentor-Protege Program' (in this subsection referred to as
the `Program') under which a financial agent designated by
the Secretary or a large financial institution may serve as a
mentor, under guidance or regulations prescribed by the
Secretary, to a small financial institution to allow such
small financial institution--
``(A) to be prepared to perform as a financial agent; or
``(B) to improve capacity to provide services to the
customers of the small financial institution.
``(2) Outreach.--The Secretary shall hold outreach events
to promote the participation of financial agents, large
financial institutions, and small financial institutions in
the Program at least once a year.
``(3) Exclusion.--The Secretary shall issue guidance or
regulations to establish a process under which a financial
agent, large financial institution, or small financial
institution may be excluded from participation in the
Program.
``(4) Report.--The Office of Minority and Women Inclusion
of the Department of the Treasury shall include in the report
submitted to Congress under section 342(e) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act information
pertaining to the Program, including--
``(A) the number of financial agents, large financial
institutions, and small financial institutions participating
in such Program; and
``(B) the number of outreach events described in paragraph
(2) held during the year covered by such report.
``(5) Definitions.--In this subsection:
``(A) Financial agent.--The term `financial agent' means
any national banking association designated by the Secretary
of the Treasury to be employed as a financial agent of the
Government.
``(B) Large financial institution.--The term `large
financial institution' means any entity regulated by the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance
Corporation, or the National Credit Union Administration that
has total consolidated assets greater than or equal to
$50,000,000,000.
``(C) Small financial institution.--The term `small
financial institution' means--
``(i) any entity regulated by the Comptroller of the
Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, or the
National Credit Union Administration that has total
consolidated assets lesser than or equal to $2,000,000,000;
or
``(ii) a minority depository institution.''.
(b) Effective Date.--This Act and the amendments made by
this Act shall take effect 90 days after the date of the
enactment of this Act.

The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each
will control 20 minutes.
The Chair recognizes the gentlewoman from California.

General Leave

Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 5315, the Expanding Opportunity for
Minority Depository Institutions Act, which is sponsored by
Representative Joyce Beatty of Ohio, who chairs our Diversity and
Inclusion Subcommittee. The bill is cosponsored by Representatives
Gregory Meeks, Al Green, Emanuel Cleaver, David Scott, and Denny
Heck.
This bill would codify the Department of the Treasury's Mentor-
Protege Program, which is designed to encourage large banks to partner
with smaller banks and minority depository institutions in enhancing
their capabilities.
These partnerships can be critical for MDIs, in particular, to have
access to the capital and investments they need to better serve their
communities. The Subcommittee on Consumer Protection and Financial
Institutions, led by Chairman Meeks, held two hearings on the
importance of minority depository institutions in October and November
of 2019.
We learned that MDIs face several challenges, including the ability
to raise capital despite overall strong financial performance and
challenges experienced as a result of serving communities that are
often the first and the hardest hit in economic down cycles. This
decline is contributing to growing banking deserts in minority
communities.
We discussed the decline of MDIs and how alarming the numbers are.
Since the financial crisis, we have seen the numbers of MDI banks
decline from 215 to 148; and today, we only have 18 Black-owned banks
in this country. It is clear regulators have failed to fulfill their
statutory obligations to preserve and promote MDIs and that Congress
must act.
In addition to Representative Beatty's bill, Representative Meeks has
drafted a complementary bill, that is, H.R. 5322, the Ensuring
Diversity in Community Banking Act, that will take additional steps to
help MDIs. We hope this bill will move to the House floor very soon.
We must do what we can to ensure all current MDIs and, hopefully,
future MDIs have access to the investments and partnerships they need
to thrive while serving the communities that need them the most.
Encouraging more partnerships, as H.R. 5315 would provide for, is one
important step we can take to ensure MDIs have the support and,
eventually, the capital they need

[[Page H193]]

to continue their good work of serving their communities.
Madam Speaker, I urge all Members to support this legislation, and I
reserve the balance of my time.
Mr. HILL of Arkansas. Madam Speaker, I yield myself such time as I
may consume.
I rise in support in H.R. 5315, the Expanding Opportunity for
Minority Depository Institutions Act.
Madam Speaker, I thank the gentlewoman from Ohio (Mrs. Beatty) for
offering this bill and for working to keep important institutions
having access to the capital they need to support the communities that
rely on them.
H.R. 5315 would codify the U.S. Treasury Department's Financial Agent
Mentor-Protege Program into law.
Minority-owned depository institutions play a vital role in our
communities across America. The significant decline in the number of
banks and credit unions since the financial crisis is concerning.
MDIs have a substantial impact on consumers and communities, in
particular, those small businesses and families that reside in low- and
moderate-income census tracts that depend on services, often from MDIs
in order to prosper.
MDIs are essential to promoting and expanding greater access to
financial services in low- and moderate-income communities. As the
number of minority depository institutions continues to decline,
Congress should act to preserve these vital institutions.
In a hearing earlier this year, the Financial Services Committee
heard directly from a number of MDIs that post-crisis regulations have
taken a serious financial toll on their ability to compete and provide
low-cost services, thus, making it harder for them to survive.
In this instance, MDIs have that in common with many, many community
bank organizations across the country. Compliance costs have risen
since the crisis; and the smaller the institution, the higher the
burden of those costs.
So what better way to try to overcome that than to try to create a
mentorship program to provide the talent and extra resources necessary
to cope with raising capital, having expertise, developing human
resources, and developing alternative compliance procedures that will
allow MDIs to thrive?
The Financial Agent Mentor-Protege Program has a proven track record
of success in doing just this. Codifying the Financial Agent Mentor-
Protege Program into law signals Congress' intent to promote the
program and increase mentor participation, potentially expanding the
number of MDIs participating in the program.
Committee Republicans support free-market solutions. The Financial
Agent Mentor-Protege Program can encourage stronger partnerships
between larger institutions and the financial sector with their
minority depository institution partners, thereby benefiting more
households and more consumers across our country.
Madam Speaker, I would once again like to thank the gentlewoman from
Ohio for her work on this bill and urge all my colleagues to support
H.R. 5315.
Madam Speaker, I reserve the balance of my time.
Ms. WATERS. Madam Speaker, I yield such time as she may consume to
the gentlewoman from Ohio (Mrs. Beatty), the chair of the Subcommittee
on Diversity and Inclusion and the sponsor of this legislation.
Mrs. BEATTY. Madam Speaker, first, let me start by thanking the chair
of the Committee on Financial Services, Congresswoman Maxine Waters,
for allowing me to bring this bill before the committee and for her
support.
Also, I thank the rest of the members on the Financial Services
Committee for supporting this bill and moving the bill out of committee
unanimously with a vote of 57-0.
Madam Speaker, I also thank my colleague, Congressman Hill, for his
words and his support on this very important piece of legislation.

{time} 1730

My bill, the Expanding Opportunity for Minority Depository
Institutions Act, H.R. 5315, would formally establish and codify the
United States Department of Treasury's Financial Agent Mentor-Protege
program into law. This mentorship program was established by the
Treasury Department under the Office of Minority and Women Inclusion,
otherwise known as OMWI, to facilitate the program.
The relationship between minority-owned banking institutions and
larger banks--which is very important and key to this piece of
legislation--helps minority-owned banks improve their capacity to
better serve their communities and their customers. At the same time it
allows larger banks the opportunity to expand their network and
facilitate potential subcontracting relationships with their proteges
as well as receive credit under the Community Reinvestment Act.
I am talking about a win-win, Madam Speaker, for everyone, especially
the communities served by these minority-owned banks who have been hurt
the most since the dramatic decline in the number of these institutions
during the financial crisis of 2008, which has left many communities of
color unbanked and underbanked.
While there are no minority-owned banks in the State of Ohio where my
district is, this bill could help change that calculus. I know because
I remember when we had a minority-owned bank not far from my district
in Dayton, Ohio.
Madam Speaker, focusing on this important issue will allow Congress
to stand up and get something done, especially for African Americans
and other minorities who find themselves unbanked or underbanked.
Congress needs to incentivize and formally establish programs such as
this to turn around this downward trend because minority-owned banks
have a history of making a difference in the communities.
Let me just give you an example, Madam Speaker. Just a few years ago
the FDIC surveyed my district, Columbus, Ohio, and reported that 25.2
percent of those in that district were either unbanked or underbanked.
Also, I wanted to be able to say that the Main Street financial
institutions that provide mortgage and small business loans to
communities are often unbanked and underbanked. Just ask African
Americans right here in Washington, D.C., what it means to them.
Finally, let me say, in fact, minority-owned banks originate a
greater share of mortgages and Small Business Administration 7(a) loans
to borrowers in low- and moderate-income areas than nonminority-owned
banks. They also originate a greater share of loans to minorities in
general than nonminority-owned banks.
That is why, Madam Speaker, it is so important for Congress to pass
this bill to formally establish the Treasury Department's mentor-
protege program so that minority-owned financial institutions can
receive resources, as you have heard Congressman Hill say, and training
and technical assistance, as Congresswoman Maxine Waters has mentioned,
from larger financial institutions to better serve their community and
their customers.
Madam Speaker, I am asking my colleagues to support this opportunity
for this program and for H.R. 5315 to become law.
Mr. HILL of Arkansas. Madam Speaker, I yield myself such time as I
may consume to close.
Madam Speaker, again, I want to thank my friend from Ohio for her
work on this bill, for calling attention to it and for suggesting that
it is a great sense of partnership to have technical compliance and
technical assistance that is available in so many of our larger
institutions, those certainly $50 billion and up, and how they can help
mentor a minority depository institution and try to create a better
working environment for them to serve their communities and serve their
households that are important in each of their towns and communities
across this country.
Madam Speaker, I urge my colleagues to support H.R. 5315, and I yield
back the balance of my time.
Ms. WATERS. Madam Speaker, I yield myself the balance of my time to
close.
Madam Speaker, we have a crisis with MDIs, and Congress must take
action. H.R. 5315 codifies the Department of the Treasury's mentor-
protege program which is designed to encourage large firms to assist
these small financial institutions, including MDIs, in enhancing their
capability. The program has fostered the establishment of long-term
business relationships between large banks and MDIs that can

[[Page H194]]

be critical for MDIs to have access to the kind of capital they need to
better serve their communities.
Madam Speaker, the Financial Services Committee approved the bill by
a vote of 57-0, and the full House should also unanimously support this
important legislation.
I urge Members to support H.R. 5315, I urge my colleagues to join me
in supporting this important piece of legislation, and I yield back the
balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Waters) that the House suspend the
rules and pass the bill, H.R. 5315, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

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