The National Bankers Association today called on Congress to bolster protection of deposits in minority and community banks to ease consumers’ fears and increase confidence in a financial system that’s seen a handful of bank closures in recent weeks.
“The closures of both SVB and Signature Bank have led to deposit flights and eroding public trust in the financial institutions that have historically served communities of color and small businesses. Deposits moving into banks that are seen as too big to fail threaten the survivability of minority and community banks. To combat this, we are calling for deposit insurance safeguards and increased protection of deposits,” Nicole Elam, President and CEO of the National Bankers Association, said in a statement.
According to a press release, in meetings with legislators Tuesday, NBA representatives called for:
- Support in urging federal regulators to protect all deposits for the next two years at minority and community banks and support in communicating that minority depository institutions (MDI) are safe;
- Urging the government and corporate America to make deposits in MDIs;
- Response by regulators to bank closures and increasing the deposit insurance fund (DIF);
- MDIs impact on minority and low-to-moderate income communities during and after the pandemic; and
- Views on policy priorities like utilization of the Emergency Capital Investment Program, CDFI Certification, and MDI/CDIF tax investment credits.
An MDI is defined as a federal insured depository institution for which 51 percent or more of the voting stock is owned by minority individuals; or a majority of the board of directors is minority and the community that the institution serves is predominantly minority.
