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A Look Inside

Comptroller Dugan on Minority-Owned Banks

OCC Affirms Support for Minority-Owned Banks

OCC List of Minority- and Women-Owned Banks

Minority Bank Deposit Program

MinBank Foundation Scholarships

National Bankers Association – The NBA Journey

NBA Promotes Business Partnerships

Canyon National Bank

OCC Resources on Native American Banking

Commonwealth National Bank

United Americas Bank, N.A.

Omni Bank, N.A.

Supervising Minority- Owned Banks: A Two-Way Street

Compliance Corner: Encouraging Investments in Minority-Owned Banks

How Majority and Minority-Owned Institutions Can Work Together

Benefits of CDFI Certification

List of Minority- Owned CDFI Banks

OCC's News from the Districts

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OCC's Community Affairs Department

(202) 874-5556


Articles by non-OCC authors represent their own views and are not necessarily the views of the OCC.

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Encouraging National Bank Investments in Minority-Owned Financial Institutions

by Stephanie Caputo, Community Development Expert, OCC

In 1992, a provision was added to the Community Reinvestment Act authorizing federal bank and thrift regulatory agencies, when evaluating a bank’s CRA performance, to consider as a factor capital investments, loan participations, and other ventures undertaken by the institution in cooperation with minority-owned financial institutions, provided that these activities help meet the credit needs of the local communities in which the minority-owned institutions are chartered.  The statute does not restrict consideration of these activities, for CRA purposes, to those that benefit the assessment area(s) of the investing institutions that undertake these activities.

On January 11, 2006, the four federal bank and thrift regulatory agencies issued an interagency letter, in which they reaffirmed the CRA statutory intent (see  The letter stated that a financial institution’s investments in a minority-owned institution would receive favorable CRA consideration, even if the minority-owned institution is not located in the assessment area(s) of the investing institution or within the broader statewide or regional areas that include the investing institution’s assessment area(s) (emphasis added). 

Examples of CRA-Eligible Activities to Assist Minority-Owned Institutions

The current interagency CRA policy guidance gives examples of qualified investments.  The qualified investments include lawful investments, grants, deposits or membership shares in or to:

Financial intermediaries (including certified community development financial institutions (CDFIs), community development corporations (CDCs), minority- and women-owned financial institutions (emphasis added), community loan funds, and low-income or community development credit unions) that primarily lend or facilitate lending in low- or moderate-income (LMI ) areas or to LMI individuals to promote community development.  (See Interagency Questions and Answers Regarding Community Reinvestment, 71 Fed. Reg. 12,424, 12, 433 (July 12, 2001) (Q&A § __.12(t) – 4)).

For some years, therefore, CRA policy has permitted banks and thrifts to receive favorable consideration for making qualified investments in minority-owned financial institutions that serve LMI areas or LMI individuals.

In addition to making qualified investments, banks may provide loans and financial services to minority-owned institutions that would receive CRA consideration. The following list contains examples of loans, investments, and services for which institutions would receive CRA consideration in support of minority-owned banks and thrifts:

  • A large national bank purchases participations in loans made by a minority-owned bank to businesses in the minority-owned bank’s community, to help reduce the credit exposure of the minority-owned institution (lending activity).
  • A majority-owned bank buys certificates of deposit in several minority-owned institutions located throughout the country (investment activity).
  • A majority-owned bank with assessment areas in the northeastern United States, invests in a CDFI-certified minority-owned bank serving a low- or moderate-income area in the Gulf Coast region (investment activity).
  • Officers of a majority-owned bank serve on the board of directors of a minority-owned bank (provision of financial services).
Sources of Legal Authority for Minority-Owned Investments

National banks may invest in minority-owned financial institutions by using one of several regulatory authorities. Banks contemplating investments in minority-owned institutions can rely on the public welfare investment authority under 12 CFR 24 (“Part 24”), as well as the regulatory authority under 12 CFR 5 (“Part 5”) and 12 CFR 1 (“Part 1”) to make certain types of investments.

Part 24 Investment Authority

Under Part 24, which was promulgated under the authority of 12 USC 24(Eleventh), national banks may make equity investments in minority-owned institutions that serve primarily LMI persons or LMI communities.  In addition, typically, a national bank may make Part 24 investments in minority-owned banks and thrifts that the Community Development Financial Institutions (CDFI) Fund has certified as CDFIs.

The OCC’s District Community Affairs Officers can provide technical assistance to national banks interested in making community development investments under Part 24.