News Release 2006-112 | October 12, 2006

Comptroller Dugan Highlights OCC Efforts to Assist Minority Banks

HENDERSON, NEV. – Comptroller of the Currency John C. Dugan said today that the OCC is exploring new ways of providing minority-owned national banks with tools that may assist them in strengthening their operations and financial performance.

In a speech to the annual convention of the National Bankers Association, a trade group for minority-owned institutions, Mr. Dugan said that while the OCC has a positive record in this area, he wants the agency to do more.  A recent report by the Government Accountability Office, he noted, found that only about 25 percent of eligible minority-owned institutions have taken advantage of services provided by the OCC.

The first step, he said, will be to survey the field staff that supervises minority institutions.  The survey will catalog existing efforts and identify agency "best practices" that can be shared by the supervisory staff.  The agency will use conclusions from that study to frame an external assessment of the OCC’s efforts on behalf of minority banks.

"Responding to the principal GAO recommendation, the agency will survey all OCC minority banks to find out how better to target our education, outreach, and technical assistance efforts so they are more useful and effective," he said.  "In particular, we hope to better understand the phenomenon, identified in the GAO study, that few minority banks take advantage of the training, education, and technical assistance efforts the federal banking agencies now provide."

The Comptroller also thanked Congress for passing OCC-supported legislation expanding the authority of national banks to make public welfare investments.  The so-called "Part 24" authority has resulted in more than $16 billion of such investments over the past 10 years, and the OCC was instrumental in pushing for the legislation.

"The Part 24 authority provides one mechanism through which national banks can make equity investments in minority-owned financial institutions," the Comptroller said.  "As the OCC indicated publicly earlier this year, these investments will be considered favorably under the Community Reinvestment Act if they help meet the credit needs of the communities in which the minority-owned institution is chartered."

The Comptroller said one key to the success of the OCC’s relationship with minority banks is the quality of the relationship between the bank and the Portfolio Manager, the examiner with responsibility for a bank’s overall supervision.  Portfolio Managers are expected to have a detailed knowledge of the banks under their supervision, and the OCC makes special efforts to ensure that those assigned to minority institutions understand the cultures of the banks they supervise.

For example, he said, "In an OCC field office where a substantial number of minority-owned banks served Asian-American markets, the OCC manager organized a "Diversity-in-Action" training session for examiners by a diversity consultant to better understand Asian business practices and cultural perceptions."

The Comptroller said minority-owned banks play a unique role in their communities.  Among the examples he cited was that of Omni Bank in Alhambra, California, where the staff speaks eight languages, including three dialects of Chinese.

"What these institutions have in common is a commitment to treat their customers with respect, and to deliver the banking services they need," he said.  "And that commitment, in turn, is why the OCC is committed to the success of minority banking in America."

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