HOPE Partners Submit Comments on NCUA Minority Depository Program

September 15th, 2023

By Kiyadh Burt, Vice President of Policy & Advocacy and Director

At the end of August, Inclusiv, the national trade association of community development credit unions, shared public comments with the National Credit Union Administration (NCUA) on the Minority Depository Institution (MDI) Preservation Program. The letter was signed by 38 MDI credit unions, including HOPE, the African American Credit Union Coalition (AACUC), the National Association of Latino Credit Union Professionals (NLCUP), and the Credit Union National Association (CUNA).

The request for comments comes at a critical juncture in the field’s history. While the number of MDIs has stabilized in recent years, in the decade leading up to the pandemic, the field declined by 38%. MDI credit unions have also been disproportionately harmed by restrictive policies in many states, such as the prohibition against accepting deposits from local units of government.

MDIs have historically played a critical role in serving people and communities of color, and that role continues today. The FDIC has documented that MDIs are a proven way to advance economic mobility, particularly in Black communities. An estimated six out of 10 people living in the service area of Black-owned banks are Black, in contrast to six out of 100 for banks that are not Black-led. Moreover, Black-owned financial institutions originate a substantially higher proportion of mortgages and small business loans to Black borrowers than non-minority financial institutions.

The letter emphasizes six areas of opportunity for NCUA in its work with MDIs:

Deepening engagement between NCUA and MDIs, especially small MDIs, outside of exams;
Making technical assistance more readily available
Increasing transparency around MDI examination standards and continuing to build out the MDI examiner training program
Increasing the accessibility of the Community Development Revolving Loan Fund grants
Support for field of membership expansion
Advocacy for increased federal and private sector investment in MDI credit unions

Importantly, the Inclusiv letter underscores the outsized role of MDIs in closing the racial wealth gap – a goal that will never be attained without institutional and structural change.

Read the full comment here.