[Federal Register Volume 87, Number 146 (Monday, August 1, 2022)]
[Notices]
[Pages 47028-47034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16345]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

[Docket ID OCC-2022-0009]


OCC Policy Statement on Minority Depository Institutions

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Policy statement.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
amending its 2013 Policy Statement on Minority National Banks and 
Federal Savings Associations to update and streamline the description 
of its policies, procedures, and programs on minority depository 
institutions.

DATES: The issuance date of this policy statement is July 26, 2022.

FOR FURTHER INFORMATION CONTACT: Charlotte M. Bahin, Senior Advisor for 
Thrift Supervision, (202) 649-6281; or Karen E. McSweeney, Special 
Counsel, Emily Boyes, Counsel, (202) 649-5490; or Karen Bellesi, 
Director for Community Development, (202) 649-6420, Office of the 
Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. 
For persons who are deaf, hard of hearing, or have a speech disability, 
please dial 7-1-1 to access telecommunications relay services.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Office of the Comptroller of the Currency (OCC or agency) 
recognizes the vital role of minority depository institutions (MDIs) in 
supporting the economic viability of the communities they serve, 
including but not limited to the economic viability of the minority 
individuals,\1\ women, or other socially and economically disadvantaged 
individuals in those communities. By providing access to credit and 
other financial services to those who otherwise might not have 
sufficient access, MDIs are essential to the well-being of 
disadvantaged and underserved communities across America.\2\
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    \1\ For purposes of this preamble, the word ``individual'' means 
a natural person, corporation, partnership, or entity.
    \2\ Although MDIs account for a small share of banks and bank 
assets, a relatively large share of their branches and branch 
deposits are in socially vulnerable counties. See, e.g., Minority 
Depository Institutions Have Vital Role Serving Vulnerable 
Communities, Federal Reserve Bank of Dallas (Feb. 1, 2022), 
available at https://www.dallasfed.org/research/economics/2022/0201.
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    Over the past decade, the OCC has demonstrated significant support 
for national banks and Federal savings associations (collectively, 
banks) that the agency has designated as MDIs.\3\ For example, since 
2011, the agency has administered the Minority Depository Institutions 
Advisory Committee (MDIAC), which is comprised of officers and 
directors of OCC-supervised MDIs and other banks committed to 
supporting MDIs.\4\ The MDIAC provides the OCC with insight on the 
unique challenges MDIs face and advises the agency on ways to help 
ensure their continued health and sustainability.
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    \3\ ``Designation'' is the process by which the OCC classifies a 
bank as an MDI and is discussed in greater detail below.
    \4\ The MDIAC is a Federal advisory committee chartered under 
the Federal Advisory Committee Act. See 5 U.S.C. Appendix. The MDIAC 
replaced a similar advisory group established by the former Office 
of Thrift Supervision (OTS) prior to Congress' transfer of OTS' 
responsibilities for oversight of Federal savings associations to 
the OCC on July 21, 2011. See Title III, Dodd-Frank Wall Street 
Reform and Consumer Protection Act (Dodd-Frank Act), Public Law 111-
203, 124 Stat. 1376, 1520 (2010).
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    In 2013, the OCC issued a policy statement on MDIs (2013 Policy 
Statement), reaffirming its commitment to their creation and 
preservation.\5\ The

[[Page 47029]]

2013 Policy Statement sets out the agency's MDI designation process, 
explains how the agency supports MDIs, and provides other useful 
information to stakeholders and interested parties.
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    \5\ Policy Statement on Minority National Banks and Federal 
Savings Associations (June 7, 2013), available at https://www.occ.treas.gov/static/licensing/form-minority-owned-policy.pdf. 
Previously, in 2001, the agency issued the Policy Statement on 
Minority-Owned National Banks, which (1) included information for 
persons interested in establishing an OCC-regulated MDI; (2) 
provided guidance on investing in MDIs; and (3) discussed available 
OCC examination support for MDIs. The 2001 policy statement defined 
``minority-owned bank'' to include minority-owned or controlled 
national banks, as well as national banks owned, controlled, and 
operated by women, consistent with the U.S. Department of the 
Treasury's Bank Deposit Program. See Exhibit E to A Guide to Tribal 
Ownership of a National Bank, available at https://www.occ.gov/publications-and-resources/publications/comptrollers-licensing-manual/files/a-guide-to-tribal-ownership-of-a-national-bank.html.
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    In 2020, the OCC formed Project REACh,\6\ which brings together 
leaders from banking, business, technology, and civil rights 
organizations to reduce specific barriers that prevent full, equal, and 
fair participation in the nation's economy.\7\ One focus of Project 
REACh is to strengthen MDIs through a dedicated workstream that seeks 
to identify and address operational impediments to MDI creation and 
growth. Among other things, Project REACh provides MDIs with targeted 
technical assistance and help developing executive exchange programs; 
improving access to cost effective and shared services; and 
establishing revenue-generating partnerships and collaborations. Also 
in 2020, Congress created the Emergency Capital Investment Program 
(ECIP), which directed nine billion dollars to MDIs and certified 
Community Development Financial Institutions to, among other things, 
provide financial assistance for businesses and consumers in 
disadvantaged and underserved communities disproportionately impacted 
by the economic effects of the COVID-19 pandemic.\8\
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    \6\ Project REACh stands for the Roundtable for Economic Access 
and Change.
    \7\ Information about Project REACh is available at https://www.occ.gov/topics/consumers-and-communities/minority-outreach/project-reach.html.
    \8\ See Public Law 116-260, 134 Stat. 1182, 2079 (2020), 
codified at 12 U.S.C. 4703a.
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    Following the formation of Project REACh and establishment of ECIP, 
the OCC witnessed increased interest from banks and other stakeholders 
in working with MDIs and the MDI designation process. In response, the 
agency undertook a review of the 2013 Policy Statement to determine 
whether clarifications or other changes were necessary. This revised 
policy statement is a result of that review.

II. Background

    Congress has long recognized the important role of MDIs in the U.S. 
banking system. For example, over 30 years ago, Congress enacted 
section 308 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (FIRREA), which established goals to preserve, 
promote, encourage, and provide for MDIs.\9\ Specifically, section 308 
directs the Secretary of the U.S. Department of the Treasury (Treasury) 
to consult with the Comptroller of the Currency, Chairman of the Board 
of Governors of the Federal Reserve System (Board), Chairperson of the 
Board of Directors of the Federal Deposit Insurance Corporation (FDIC), 
and Chairman of the National Credit Union Administration (NCUA) on the 
methods for best (1) preserving the present number of MDIs; (2) 
preserving MDIs' minority character in cases of merger or acquisition; 
(3) providing technical assistance to help MDIs remain healthy; (4) 
promoting and encouraging the creation of new MDIs; and (5) providing 
MDIs with training, technical assistance, and educational programs.\10\ 
Section 308 also requires each referenced agency to submit an annual 
report to Congress describing its actions to carry out these goals.\11\
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    \9\ 12 U.S.C. 1463 (note).
    \10\ Prior to the Dodd-Frank Act, section 308 of FIRREA applied 
only to the FDIC and OTS. See Public Law 101-73, 103 Stat. 183, 353 
(Aug. 9, 1989). Section 367 of the Dodd-Frank Act amended the scope 
of section 308 to include the OCC, Board, and NCUA and to remove the 
OTS. See Dodd-Frank Act, 124 Stat. at 1556. It should be noted, 
however, that the OCC recognized MDIs long before its inclusion in 
the scope of section 308.
    \11\ Congress added this requirement to FIRREA in section 
367(4)(B) of the Dodd-Frank Act. See 124 Stat. at 1556. The OCC's 
2020 Report to Congress on Preserving and Promoting Minority 
Depository Institutions is available at https://www.occ.gov/publications-and-resources/publications/banker-education/files/2020-report-to-congress-minority-depository-instit.html.
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    For purposes of OCC-regulated entities, section 308(b)(1) of FIRREA 
defines ``minority depository institution'' as (1) a national bank or 
Federal stock \12\ savings association that is at least 51 percent 
owned (the ownership threshold) by one or more socially and 
economically disadvantaged individuals or (2) a Federal mutual savings 
association in which the majority of its board of directors, its 
account holders, and the community it serves is predominantly 
minority.\13\ Section 308(b)(2) of FIRREA defines ``minority'' as ``any 
black American, Native American, Hispanic American, or Asian 
American.'' The statute does not define ``socially and economically 
disadvantaged individuals.''
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    \12\ Section 308(b) of FIRREA uses the terms ``privately owned'' 
MDI and ``publicly owned'' MDI and distinguishes these MDIs from 
MDIs that are mutual savings associations. In this preamble and the 
revised policy statement, the OCC uses the term ``stock'' to capture 
both privately and publicly owned MDIs and to distinguish them from 
MDIs that are mutual savings associations. A Federal stock savings 
association may be publicly or privately owned.
    \13\ Other federal statutes include other definitions of MDI. 
See, e.g., 12 U.S.C. 2907. As a matter of policy, Federal agencies 
also recognize MDIs other than those specifically identified in 
section 308 of FIRREA. This includes OCC recognition of (1) Federal 
mutual savings associations where women comprise a majority of the 
Board of Directors and hold a significant percentage of senior 
management positions; and (2) previously designated MDIs, both as 
described in the OCC's current policy statement. In addition, the 
Board and the FDIC consider a bank to be an MDI if a majority of the 
bank's board of directors consists of minority individuals and the 
community that the bank serves is predominantly minority.
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    As noted previously, the OCC's 2013 Policy Statement sets forth the 
agency's policy with respect to MDIs. It (1) incorporates the 
definitions of MDI from section 308 of FIRREA; (2) describes other 
Federal mutual savings associations that the OCC recognizes as MDIs as 
a matter of policy; and (3) recognizes the agency's discretion to treat 
previously designated national banks that no longer meet the ownership 
threshold as MDIs if they primarily serve the credit and other economic 
needs of a predominantly minority community. The 2013 Policy Statement 
defines ``minority'' \14\ in the same way it is defined in section 308 
of FIRREA and, also like section 308, does not define ``socially and 
economically disadvantaged individuals.'' The 2013 Policy Statement 
also (1) includes information about forming an OCC-supervised MDI; (2) 
describes the OCC's examination support for MDIs; (3) discusses banks' 
investments in MDIs pursuant to their respective investment 
authorities; (4) sets forth the agency's goals in the event of 
resolution of an MDI; (5) explains the role of the Community 
Reinvestment Act (CRA) in supporting MDIs; (6) describes the role and 
responsibilities of the MDIAC and other outreach efforts; (7) explains 
the information, education, and outreach resources available to MDIs 
from the OCC; and (8) explains that the OCC submits an annual report to 
Congress.
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    \14\ The 2013 Policy Statement defines ``minority'' in 
essentially the same way that section 308 of FIRREA defines the 
term, except that FIRREA uses the term ``black American'' and the 
2013 Policy Statement uses the term ``African American.'' For the 
purposes of this preamble and the revised policy statement, the OCC 
does not interpret this difference to be materially significant.

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[[Page 47030]]

III. Revised Policy Statement

    The OCC is issuing this revised policy statement, which replaces 
its 2013 Policy Statement, to update the description of the agency's 
MDI policies, procedures, and programs, including by removing obsolete 
references and streamlining the document.
    Section 1. Introduction. The 2013 Policy Statement begins by 
recognizing the important role of MDIs in the communities they serve 
and affirming the agency's commitment to MDIs. In a section entitled 
``Statutory Framework,'' the OCC describes the goals of section 308 of 
FIRREA and the agency's commitment to these goals. Similarly, the 
revised policy statement begins by recognizing the important role of 
MDIs in the communities they serve and affirming both the OCC's support 
for MDIs and the goals of section 308 of FIRREA.
    Section 2. Meaning of MDI. In the ``Definition of MDIs'' section, 
the 2013 Policy Statement defines a ``minority depository institution'' 
as a national bank or Federal stock savings association that (1) is not 
a U.S. subsidiary of a foreign-owned bank and (2) is at least 51 
percent owned by minorities, women, or socially and economically 
disadvantaged individuals. In this same section, the 2013 Policy 
Statement also states that when evaluating a Federal mutual savings 
association, the OCC may consider whether (1) the majority of its Board 
of Directors is minority and the communities it serves are 
predominantly minority or (2) women comprise a majority of its Board of 
Directors and hold a significant percentage of its senior management 
positions. The 2013 Policy Statement also states that the OCC, at its 
discretion, may continue to treat a national bank or Federal savings 
association previously designated as an MDI as covered by the policy 
statement even if the bank no longer meets the ownership threshold, 
provided it primarily serves the credit and other economic needs of the 
community in which it is chartered, and the community is predominantly 
minority.
    Structural changes. The OCC has made a number of changes to 
streamline and clarify this section. First, the revised policy 
statement divides the discussion of types of MDIs into subsection A 
(which discusses national banks and Federal stock savings associations 
that are MDIs) and subsection B (which discusses Federal mutual savings 
associations that are MDIs).\15\ Second, the revised policy statement 
moves the discussion about previously designated MDIs into section 3 
(entitled ``Formation, Designation, and On-Going Review''), where all 
designation issues are addressed.
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    \15\ The revised policy statement also moves the statement that 
an MDI may not be a U.S. subsidiary of a foreign-owned bank to a 
footnote. Under both the 2013 Policy Statement and the revised 
policy statement, this requirement applies to all MDIs in all 
situations.
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    Minority individuals. As noted above, the 2013 Policy Statement 
defines and uses the word ``minority'' to reference four categories of 
individuals (African Americans, Asian Americans, Hispanic Americans, 
and Native Americans). The 2013 Policy Statement also uses the word 
``minority'' as part of the term ``minority depository institution'' 
but, in this context, ``minority'' may have several possible meanings. 
To address any confusion caused by the use of the word ``minority,'' 
the revised policy statement uses (1) ``minority individual'' to mean 
the four categories of individuals discussed above and (2) ``minority'' 
to mean minority individuals, women, and other socially and 
economically disadvantaged individuals, including when ``minority'' is 
used in ``minority depository institution.'' The OCC does not intend 
for these changes to have a substantive effect but believes they 
clarify the document.
    Federal mutual savings associations. The 2013 Policy Statement 
provides that the OCC may consider two categories of Federal mutual 
savings associations as MDIs. The first category is a Federal mutual 
savings association where a majority of its Board of Directors and the 
community it serves are predominantly minority. This description 
largely mirrors the definition in section 308 of FIRREA for MDIs that 
are Federal mutual savings associations, except that the statute also 
requires that the majority of savings association's account holders are 
minority individuals. In order to make this reference consistent with 
section 308, the revised policy statement adds the account holder 
element to this description.
    Second, the 2013 Policy Statement provides that the OCC may 
consider a Federal mutual savings association an MDI if women comprise 
a majority of its Board of Directors and hold a significant percentage 
of its senior management positions. In the revised policy statement, 
the OCC expands this category of MDIs to include Federal mutual savings 
associations if (1) minority individuals or (2) other socially and 
economically disadvantaged individuals comprise a majority of the Board 
of Directors and hold a significant percentage of the senior management 
positions. The OCC is not aware of any reason to limit these 
composition requirements to women-led mutual MDIs. By expanding the 
definition, the revised policy statement creates parity for all Federal 
mutual savings associations covered and encourages the creation of new 
MDIs. Therefore, under the revised policy statement, a bank can satisfy 
its ownership threshold or composition component (as applicable, 
depending on whether the bank is a national bank, Federal stock savings 
association, or Federal mutual savings association) with reference to 
(1) minority individuals, (2) women, or (3) other socially and 
economically disadvantaged individuals.
    Other socially and economically disadvantaged individuals. The 2013 
Policy Statement references ``minorities, women, and socially and 
economically disadvantaged individuals.'' To clarify that minority 
individuals (which, as discussed above, references African Americans, 
Asian Americans, Hispanic Americans, and Native Americans) and women 
are examples of individuals that the OCC has determined are ``socially 
and economically disadvantaged,'' the revised policy statement includes 
the word ``other'' before the term ``socially and economically 
disadvantaged individuals.''
    Section 3. Formation, Designation, and On-Going Review. In a 
section entitled ``Formation of MDIs,'' the 2013 Policy Statement 
briefly outlines some of the types of advice and technical assistance 
the OCC provides to individuals interested in a bank charter and an MDI 
designation. It also explains that certain MDIs may be eligible for 
designation as a community development bank and why this is 
advantageous. The 2013 Policy Statement does not explain how an MDI is 
formed or designated. The OCC believes that this information would be 
helpful to stakeholders and other interested parties, and the revised 
policy statement includes a discussion of these topics.
    De novo bank formation and designation. Specifically, in subsection 
A of section 3, the revised policy statement explains that the process 
of forming a de novo bank designated as an MDI involves two steps: an 
applicant must (1) file an application and receive approval to form a 
bank and then (2) request to be designated as an MDI. If the OCC 
determines that all of the applicable requirements are met, the OCC 
will provide (1) a letter approving

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the formation of the bank and (2) a separate letter approving the MDI 
designation. The revised policy statement also explains that for 
individuals interested in this process, the OCC offers advice and 
technical assistance, including through pre-filing and exploratory 
meetings, and directs requests for assistance to OCC Licensing.
    Designation of existing banks. In subsection B of section 3, the 
revised policy statement explains that an existing bank that believes 
it qualifies as an MDI also may request designation from the OCC. If 
the OCC determines that the bank satisfies the applicable requirements, 
the agency will provide the bank with an MDI designation letter. The 
revised policy statement explains that the OCC offers advice and 
technical assistance to banks interested in MDI designation and 
explains that requests for assistance should be directed to the MDIAC 
Designated Federal Officer.
    Continued designation. The ``Definition of MDIs'' section of the 
2013 Policy Statement states that the OCC, at its discretion, may 
continue to treat a previously designated bank as an MDI even if the 
bank no longer meets the ``ownership'' threshold, provided that (1) the 
bank primarily serves the credit and other economic needs of the 
community in which it is chartered and (2) the community is 
predominantly minority. In subsection C of section 3, the revised 
policy statement addresses continued designation but includes several 
changes from the 2013 Policy Statement.
    First, by referencing ``ownership,'' the 2013 Policy Statement 
limits the continued designation option to national banks and Federal 
stock savings association, to the exclusion of Federal mutual savings 
associations. The OCC is not aware of any reason that continued 
designation should exclude Federal mutual savings associations, and the 
revised policy statement provides that the OCC can exercise its 
discretion to continue to designate a previously designated bank, 
regardless of the type of bank.
    Second, the 2013 Policy Statement provides the OCC with discretion 
to treat a bank previously designated as an MDI as covered by the 2013 
Policy Statement, even if the bank no longer meets the ownership 
criteria, if (1) the bank primarily serves the credit and other 
economic needs of the community in which it is chartered; and (2) the 
bank's community is predominantly minority. In the revised policy 
statement, the OCC revises the wording of both prongs of this 
statement. Specifically, prong (1) states that the agency has the 
discretion to continue to designate a bank as an MDI if the bank 
``supports the economic viability'' of its community. The agency 
believes that this change more effectively highlights the important 
role of MDIs in supporting the economic viability of their communities, 
of which the services the MDIs provide may only be a part. Prong (2) of 
the revised policy statement provides that continued designation is 
possible if the community the bank serves is comprised predominantly of 
minority individuals, women, or other socially and economically 
disadvantaged individuals. This change reflects the fact that the 
communities MDIs serve include not only minority individuals, but also 
women and other socially and economically disadvantaged individuals.
    On-going review. The revised policy statement explains that the 
OCC, on an annual basis, reviews whether a bank designated as an MDI 
continues to satisfy the meaning of MDI described in section 2 or 
whether continued designation is appropriate. Although there is no 
similar provision in the 2013 Policy Statement, this practice ensures 
that banks designated as MDIs continue to merit such designation.
    Community development banks. Finally, as noted previously, the 2013 
Policy Statement includes a discussion of community development banks. 
In the revised policy statement, the OCC removes this discussion 
because it is outside of the scope of this policy statement. This 
change has, however, no substantive effect.
    Section 4. List of OCC-Supervised MDIs and Related Information. 
Both the 2013 Policy Statement and the revised policy statement state 
that the OCC maintains a list of the MDIs it supervises, along with 
related information, at www.occ.gov. There are no material changes to 
this section.
    Section 5. Support for MDIs. In a section entitled ``Examination 
Support for MDIs,'' the 2013 Policy Statement explains that the OCC 
annually develops a supervisory strategy for each MDI based on its 
unique risk profile and need for technical assistance, training, and 
education. This section also outlines how the OCC assigns managers, 
examiners, and expert advisors responsible for MDI supervision; 
provides guidance to MDIs; exchanges relevant information and best 
practices; and keeps up-to-date on important topics and emerging 
concerns about MDIs.
    The revised policy statement includes several structural changes to 
this section. It changes the section's heading to ``Support for MDIs'' 
to align with its focus and moves information related to MDI strategy 
and support from the 2013 Policy Statement's ``Resolution'' section to 
this section. The revised policy statement also sets forth examples of 
support provided to MDIs in section 5, as well as streamlines the 
information presented, as necessary to promote greater clarity and 
transparency.
    The 2013 Policy Statement includes a section entitled ``Capital for 
MDIs,'' which states that the OCC supports banks' investments in MDIs 
pursuant to their public welfare investment authorities and such 
investments may receive positive consideration under CRA. In another 
section, entitled ``Supporting MDIs through the Community Reinvestment 
Act,'' the 2013 Policy Statement notes that majority-owned institutions 
are often key partners with MDIs and that, for purposes of CRA, the OCC 
considers capital investment, loan participation, and other ventures 
undertaken in cooperation with MDIs, if such activities help meet the 
credit needs of the MDIs' communities.
    In the revised policy statement, the information from these two 
sections is combined and updated in new section 5. The revised section 
acknowledges that depository institutions that are not MDIs (non-
minority depository institutions or NMDIs) are often key partners with 
MDIs and notes that the OCC actively supports relationships between 
MDIs and NMDIs and provides resources to help identify relevant 
partnership opportunities.
    This section also provides a streamlined description of the types 
of support that a NMDI can provide to MDIs. It provides examples of 
direct and indirect financial support that NMDIs can provide through an 
applicable investment authority, including investing in MDI-issued 
subordinated debt; placing deposit funds in an MDI; purchasing MDI-
issued capital stock; and engaging in a loan participation with an MDI. 
It also describes other types of support an NMDI can provide, including 
collaborating with MDIs on products and services (e.g., in-kind 
services that aid an MDI in serving its customers) and contributing 
excess real estate to MDIs (e.g., surplus branch facilities). These 
examples are intended to provide stakeholders with clear and useful 
information.
    In addition, the revised policy statement states that the OCC 
considers capital investments, loan participations, and other ventures 
undertaken by NMDIs in cooperation with minority- and women-owned 
financial institutions and low-income credit

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unions,\16\ provided the activities help meet the credit needs of the 
local communities served by the financial institutions or credit 
unions. In addition, as discussed in the revised policy statement, 
NMDIs that invest in MDIs may receive positive consideration under the 
CRA.
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    \16\ See 12 U.S.C. 2903(b).
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    Section 6. Attribution of Investments for Purposes of the Ownership 
Threshold. The 2013 Policy Statement does not address when an 
individual's investment in an MDI can be attributed to the MDI for 
purposes of the ownership threshold. To address this issue, the revised 
policy statement states that an investment in an MDI by a natural 
person may be attributed to the MDI ownership threshold only if the 
natural person is a minority individual, woman, or other socially and 
economically disadvantaged individual.\17\ An investment in an MDI by a 
corporation, partnership, or other entity may be attributed to the MDI 
ownership threshold only if the corporation, partnership, or entity is 
(1) also an MDI or (2) at least 51 percent owned by one or more 
minority individuals, women, or other socially and economically 
disadvantaged individuals. The revised policy statement includes in a 
footnote an example of how this method of attribution would work, 
stating that an investment in an MDI by a private equity fund would 
count toward the 51 percent ownership threshold requirement only if the 
fund itself is at least 51 percent owned by one or more minority 
individuals, women, or other socially and economically disadvantaged 
individuals. This method of attribution is designed to ensure that the 
special character of an MDI is not diluted by investments in the MDI.
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    \17\ As noted previously, (1) ``individual'' means a natural 
person, corporation, partnership or entity and (2) ``woman'' and 
``women'' incorporate the definition of ``individual'' and are not 
limited to natural persons.
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    Section 7. Resolution of Supervisory Cases. The 2013 Policy 
Statement explains that in resolving a supervisory case involving an 
MDI, the OCC encourages remedies, including mergers and acquisitions, 
which are consistent with the MDI's safety and soundness and the goal 
of maintaining its minority ownership. The revised policy statement 
includes a similar explanation, streamlined for clarity, stating that 
in the unlikely event that the OCC must resolve an MDI, the agency 
seeks remedies (including mergers and acquisitions) that are consistent 
with and aim to maintain the MDI's safety and soundness and its 
character, in accordance with the goals of section 308 of FIRREA. These 
changes do not signal a policy change.
    Section 8. The MDIAC and Other MDI-Focused Initiatives. The 2013 
Policy Statement includes a discussion of OCC initiatives that, as of 
2013, provided support to MDIs and helped inform agency decision-making 
with respect to MDIs. The revised policy statement updates this 
information and removes obsolete references where appropriate. 
Specifically, the revised policy statement discusses (1) the MDIAC, 
including the role of the MDIAC Designated Federal Officer; (2) the 
OCC's Director of Minority Outreach; (3) the agency's Minority 
Depository Institution Collaboration Initiative; (4) Project REACh; and 
(5) the OCC's District Community Affairs Officers.
    Section 9. Consultation and Annual Report. The 2013 Policy 
Statement states that the OCC consults with the Secretary of the 
Treasury on achieving the goals of section 308 of FIRREA and, as 
required by law, submits an annual report to Congress on actions take 
to carry out those goals. The revised policy statement includes this 
information and adds that the OCC's Director of Minority Outreach is 
responsible for submitting the annual report to Congress.
    Section 10. Conclusion. Both the 2013 Policy Statement and the 
revised policy statement conclude with a statement of support for MDIs.
    The text of the policy statement is as follows:

OCC Policy Statement on Minority Depository Institutions

1. Introduction

    Minority depository institutions (MDIs) are national banks and 
Federal savings associations (banks) that support the economic 
viability of the communities they serve, including but not limited to 
the minority individuals, women, or other socially and economically 
disadvantaged individuals in those communities.
    The Office of the Comptroller of the Currency (OCC or agency) 
recognizes the important role of MDIs in the communities they serve 
and, consistent with the agency's mission to ensure a safe and sound 
Federal banking system, the OCC actively supports MDIs through a number 
of initiatives. The agency's efforts to support MDIs also reflect its 
commitment to the goals of section 308 of Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (FIRREA).\1\
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    \1\ 12 U.S.C. 1463 (note). The goals of section 308 are to 
preserve the number of MDIs; preserve MDIs minority character in 
cases of merger or acquisition; provide technical assistance to help 
MDIs remain healthy; promote and encourage the creation of new MDIs; 
and provide training, technical assistance, and educational 
programs.
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2. Meaning of MDI \2\
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    \2\ In addition to the other requirements discussed in this 
policy statement, an MDI may not be a U.S. subsidiary of a foreign-
owned bank.
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    A. National banks or Federal stock savings associations.\3\ The OCC 
defines an MDI to include a national bank or Federal stock savings 
association that is at least 51 percent owned by one or more minority 
individuals, women, or other socially and economically disadvantaged 
individuals.\4\
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    \3\ A Federal stock savings association may be publicly or 
privately owned.
    \4\ For purposes of this policy statement, ``individual'' means 
a natural person, corporation, partnership or entity. ``Minority 
individual'' means a black American, Native American, Hispanic 
American, or Asian American individual. Therefore, a bank that is 
owned by a minority-owned corporation is owned by a minority 
individual. ``Women'' incorporates the definition of ``individual'' 
and is not limited to natural persons. Therefore, a bank that is 
owned by a women-owned corporation is owned by women.
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    B. Federal mutual savings associations. The OCC--
    i. Defines an MDI to include a Federal mutual savings association 
(1) where minority individuals comprise a majority of both its Board of 
Directors and its account holders and (2) that serves the credit and 
other economic needs of a community comprised predominantly of minority 
individuals; and
    ii. Considers a Federal mutual savings association to be an MDI if 
(1) a majority of its Board of Directors is comprised of minority 
individuals, women, or other socially and economically disadvantaged 
individuals and (2) minority individuals, women, or other socially and 
economically disadvantaged individuals hold a significant percentage of 
its senior management positions.

3. Formation, Designation, and On-Going Review

    A. De novo bank formation and designation. The process of forming a 
de novo bank that is designated as an MDI involves two steps: an 
applicant must (1) file an application and receive approval to form a 
bank and (2) request that the bank be designated as an MDI. If the OCC 
determines that all of the applicable requirements are met, the OCC 
will provide (1) a letter approving the formation of a bank and (2) a 
separate MDI designation letter. For individuals interested in this 
process, the OCC offers advice and technical assistance, including 
guidance on determining whether the applicant

[[Page 47033]]

satisfies the meaning of MDI as set forth in section 2 of this policy 
statement, through pre-filing and exploratory meetings. Requests for 
assistance should be directed to OCC Licensing.
    B. Designation of existing banks. A bank that believes it satisfies 
the meaning of MDI as set forth in section 2 of this policy statement 
may request the OCC designate it as an MDI. If the OCC determines the 
bank satisfies the meaning of MDI, the agency will provide the bank 
with an MDI designation letter. For banks interested in this process, 
the OCC offers advice and technical assistance, including guidance on 
determining whether the bank satisfies the meaning of MDI. Requests for 
assistance should be directed to the Minority Depository Institution 
Advisory Committee Designated Federal Officer.
    C. Continued designation. At its discretion, the OCC may continue 
to designate as an MDI a bank that no longer satisfies the meaning of 
MDI as set forth in section 2 of this policy statement if the bank 
supports the economic viability of a community comprised predominantly 
of minority individuals, women, or other socially and economically 
disadvantaged individuals.
    D. On-going review. On an annual basis, the OCC reviews whether (1) 
a bank designated as an MDI continues to satisfy the meaning of MDI as 
set forth in section 2 of this policy statement or (2) continued 
designation is appropriate.

4. List of OCC-Supervised MDIs and Related Information

    The OCC maintains a list of OCC-supervised MDIs and information 
about MDI initiatives and related events on its website at www.occ.gov.

5. Support for MDIs

    The OCC develops an annual strategy to support MDIs. The strategy 
is designed to support their financial vitality and safe and sound 
operations and to address unique risks facing MDIs. As needed, the OCC 
supports MDIs by providing training, technical assistance, and 
educational programs in such areas as compliance, risk management, and 
operations.
    The OCC recognizes that depository institutions that are not MDIs 
(non-minority depository institutions or NMDIs) can be key partners 
with MDIs. The agency actively supports these relationships, which can 
be valuable tools for assisting MDIs, and provides resources to help 
identify relevant partnership opportunities.
    For example, NMDIs may provide direct or indirect financial support 
for MDIs through an applicable investment authority.\5\ This type of 
support includes an NMDI (1) investing in subordinated debt issued by 
an MDI; (2) placing deposit funds in an MDI; (3) purchasing MDI-issued 
capital stock (e.g., common or preferred stock); and (4) engaging in a 
loan participation with an MDI. Other types of support that an NMDI can 
offer include collaborating with an MDI on products and services (e.g., 
in-kind services that aid an MDI in serving its customers) and 
contributing excess real estate to an MDI (e.g., surplus branch 
facilities).
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    \5\ See, e.g., national banks' public welfare investment 
authority (12 CFR part 24) and Federal savings associations' 
community development investment authority (12 CFR 160.36).
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    In assessing the record of an NMDI under the Community Reinvestment 
Act (CRA) and its implementing regulations,\6\ the OCC considers 
capital investments, loan participations, and other ventures undertaken 
in cooperation with minority- and women-owned financial institutions 
and low-income credit unions if such activities help meet the credit 
needs of the local communities served by the MDI or low-income credit 
union. NMDIs that invest in MDIs may receive positive consideration 
under the CRA if those investments are consistent with the requirements 
of the CRA and its implementing regulations.
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    \6\ See 12 U.S.C. 2901 et seq. and 12 CFR part 25.
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6. Attribution of Investments for Purposes of the Ownership Threshold

    An investment in an MDI by a natural person may be attributed to 
the MDI ownership threshold only if the natural person is a minority 
individual, woman, or other socially and economically disadvantaged 
individual.
    An investment in an MDI by a corporation, partnership, or entity 
may be attributed to the MDI ownership threshold only if the 
corporation, partnership, or entity is (1) also an MDI or (2) at least 
51 percent owned by one or more minority individuals, women, or other 
socially and economically disadvantaged individuals.\7\
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    \7\ See supra note 4 (meaning of ``individual,'' ``minority 
individual,'' and ``women''). For example, an investment in an MDI 
by a private equity fund would count toward the 51 percent ownership 
threshold only if the fund itself is at least 51 percent owned by 
one or more minority individuals, women, or other socially and 
economically disadvantaged individuals.
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7. Resolution of Supervisory Cases

    In the unlikely event that it is necessary to resolve an MDI, the 
OCC seeks remedies (including mergers and acquisitions) that are 
consistent with and aim to maintain the MDI's safety and soundness and 
its character, in accordance with the goals of section 308 of FIRREA.

8. Minority Depository Institution Advisory Committee and Other MDI- 
Focused Initiatives

    In addition to the initiatives discussed above, the OCC's Minority 
Depository Institution Advisory Committee (MDIAC) and other MDI-focused 
initiatives also help to support MDIs. Information about these 
initiatives can be found on the website at www.occ.gov and include the 
following:
    A. MDIAC. The MDIAC is an OCC-chartered advisory committee 
organized in accordance with the Federal Advisory Committee Act 
(FACA).\8\ The MDIAC includes officers and directors of MDIs and other 
depository institutions committed to supporting MDIs and provides 
advice to the OCC on meeting the goals in section 308 of FIRREA. As 
required by FACA, the OCC has an MDIAC Designated Federal Officer, who 
is responsible for the MDIAC and serves as the OCC's primary point of 
contact on MDI matters.
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    \8\ See 5 U.S.C. appendix 2.
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    B. Director of Minority Outreach. The OCC's Director of Minority 
Outreach coordinates the agency's interdepartmental and interagency 
outreach efforts, including interagency conferences and other 
activities.
    C. Minority Depository Institution Collaboration Initiative. The 
OCC's Minority Depository Institution Collaboration Initiative promotes 
collaboration and relationships between MDIs and larger NMDIs and is 
designed to provide access to products and services that promote 
empowerment to disadvantaged and underserved communities, economic 
independence, job creation, and community development/revitalization. 
This initiative is coordinated by the OCC's Midsize and Community Bank 
Supervision (MCBS) staff.
    D. Project Roundtable for Economic Access and Change (REACh). The 
OCC-established Project REACh promotes financial inclusion through 
greater access to credit and capital. Project REACh brings together 
leaders from the banking industry, national civil rights organizations, 
other businesses, and the technology industry to reduce specific 
barriers that prevent full, equal, and fair participation in the 
nation's economy. Project REACh supports MDIs through its MDI 
Revitalization Workstream, which addresses the challenges MDIs face in 
accessing capital, expanding

[[Page 47034]]

technology capabilities, and modernizing infrastructure. Project REACh 
is coordinated by the OCC's Director of Minority Outreach. Information 
on Project REACh is available at Project REACh.
    E. District Community Affairs Officers. The OCC's District 
Community Affairs Officers provide advice and technical assistance to 
MDIs interested in structuring community development investments and 
initiatives and identifying opportunities for relationships between 
NMDIs and MDIs.

9. Consultation and Annual Report

    The Secretary of the U.S. Department of the Treasury consults with 
the Comptroller of the Currency, under section 308 of FIRREA, on the 
methods for best achieving the goals of section 308 of FIRREA. The law 
also directs the OCC to submit an annual report to Congress on the 
actions taken to carry out these goals. The OCC's Director of Minority 
Outreach is responsible for submitting the annual report to Congress.

10. Conclusion

    The OCC recognizes the important role of MDIs in the communities 
they serve and actively supports MDIs through the initiatives discussed 
above.

Michael J. Hsu,
Acting Comptroller of the Currency.
    Dated: July 26, 2022.
Michael J. Hsu,
Acting Comptroller of the Currency.

[FR Doc. 2022-16345 Filed 7-29-22; 8:45 am]
BILLING CODE 4810-33-P