Preserving Minority Depository Institutions, December 2015

The Board submits this report pursuant to section 367 of the Dodd-Frank Act. This section requires the Board to submit an annual report to the Congress detailing the actions taken to fulfill requirements outlined in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989, as amended by the Dodd-Frank Act. In addition to the annual reporting requirement, FIRREA section 308 requires the Federal Reserve System (System) to devote efforts toward preserving minority ownership of minority depository institutions (MDIs). Comments on the System’s efforts to fulfill the requirements of FIRREA section 308 are included in the 2008 through 2012 annual reports of the Board to the Congress. However, beginning with the 2013 report the Federal Reserve issues the annual report in separate form to align Board practice with that of the other agencies with section 367 responsibilities. Throughout 2014, the System supervised 19 MDIs, which collectively represented 2.28 percent of the 833 community banks in the System’s community banking organizations portfolio. To support these institutions and to accomplish minority depository-related FIRREA goals, the System continues to dedicate resources to engage in outreach and technical assistance activities. Throughout 2014, staff from the Board as well as staff from each of the 12 Federal Reserve Banks (FRBs) engaged in activities to support MDIs. Highlights of those activities included hosting a Rapid Response training program for examiners for FRB and state regulatory examiners on minority depository institution supervisory guidance, which focused on the Federal Reserve System’s Partnership for Progress (PFP) program and on Dodd-Frank requirements such as preserving MDIs, the state of MDIs, challenges facing MDIs, and supervisory tools; providing technical assistance to MDIs on a wide variety of topics, including topics focused on improving regulatory ratings, navigating the regulatory applications process, and refining capital-planning practices; and maintaining a public website, which offers a full menu of banking resources—including regulatory guidance—relevant to MDIs.