Letter to the OCC on the Policy Statement on Minority Depository Institutions

Dear Comptroller Gould:

The American Bankers Association (ABA) appreciates the Office of the Comptroller of the Currency's commitment to preserving and promoting Minority Depository Institutions (MDIs). We share the longstanding bipartisan goal reflected in Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to support the formation, preservation, and growth of MDIs.

ABA is concerned that the OCC's revised Policy Statement on Minority Depository Institutions raises several issues that may create uncertainty for institutions seeking to qualify for or maintain MDI designation. MDIs play an essential role in expanding access to credit, supporting small businesses, building wealth, and promoting economic opportunity in communities that have historically faced barriers to full participation in the financial system. A clear, consistent, and workable framework for MDI designation is therefore critical.

ABA respectfully believes that the standard used to evaluate "socially and economically disadvantaged" status should be transparent, consistent, and operationally practical. We are concerned that the new policy could introduce a subjective and individualized framework for evaluating qualifying ownership and control, which may create uncertainty for prospective bank organizers, investors, and existing MDIs. Without a clear and consistently applied standard, institutions will face difficulty determining whether they qualify for, or can maintain, MDI status, particularly in connection with mergers, acquisitions, ownership changes, capital raises, orother strategic transactions.

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