Final Rule Summary NCUA: Minority Depository Institution Preservation Program

Final Rule Summary NCUA: Minority Depository Institution Preservation Program

NASCUS Legislative and Regulatory Affairs Department
February 29, 2024

The NCUA Board issued final revisions to the Interpretive Ruling and Policy Statement (IRPS) 13-1 regarding the Minority Depository Institution (MDI) Preservation Program. IRPS 13-1 was initially proposed in 2013 and finalized in 2015, establishing the MDI Preservation Program to encourage the preservation of existing MDIs and establish new MDIs.  

In June 2023, the Board invited comment on proposed revisions to IRPS 13-1. The proposed revisions included:

  • Transferring the administration of MDIs to CURE to reflect the agency’s current structure;
  • Clarifying the meaning of “community it services” means a credit union’s field of membership;
  • Adding a reference to agency guidance to examiners regarding the supervision of MDIs
  • Clarifying the process for reviewing an MDI’s designation status and
  • Adding new subsection headings and expanding the discussion of agency actions and policies in MDI engagement, technical assistance for MDIs, examinations of MDIs, grants and loans, and training. 

The revisions were adopted as proposed and are effective March 27, 2024. 

Summary

The final IRPS 13-1 consists of four categories with subcategories reflecting the proposed revisions. The categories consist of:

A. Goals and Objectives of the Minority Depository Institution Preservation Program. 

  • Preserve the number of MDIs;
  • Preserve the minority character of MDIs involved in mergers and acquisitions;
  • Provide technical assistance to prevent insolvency of MDIs that are not now insolvent;
  • Promote and encourage the creation of new MDIs; and
  • Provide training, technical assistance, and educational programs for MDIs.

B. Description of the Minority Depository Institution Preservation Program

  • NCUA’s CURE office administers the MDI Program. NCUA will meet periodically with state regulators, other federal regulators, and stakeholders to discuss outreach efforts and identify areas to work together to assist MDIs.
  • NCUA initiatives to assist MDIs;
    • Consulting and support programs
    • Training and education;
    • Grants and loans through the NCUA’s Community Development Revolving Loan Fund (CDRLF) 
    • Technical assistance

C. Minority Depository Institution Designation Eligibility

  • A majority of the credit union’s current members are from any of the eligible minority groups;
  • A majority of the members of the credit union’s Board of directors are from any of the eligible minority groups and
  • A majority of the community the credit union serves, as designated in its field of membership, are from any eligible minority groups.

D. Monitoring and Reporting on Minority Depository Institutions 

NCUA will monitor MDIs and report to Congress annually:

  • The number and overall financial condition of MDIs;
  • Any actions taken by the agency to preserve and strengthen MDIs and encourage the chartering of new MDIs;
  • A summary of the NCUA’s efforts to obtain feedback from MDIs on the effectiveness of the agency’s MDI support and preservation activities and 
  • A list of MDIs is on its website.