Frequently Asked Questions (FAQs)

What is the definition of a minority-owned institution?
Why is the program important?
Why are minority banks important?
What are the objectives of the program?
What are the components of the Partnership for Progress program?
What tools and resources are available through the Partnership for Progress website?
What is the life cycle of bank development?
How will the life cycle of bank development help banks?
Why are some data not displayed in the demographic tables?
How do I submit a milestone suggestion for the minority banking timeline?
How will the program materials be made available?
Does the program include FRB examiner training?
How did the program get started?
Who is coordinating the program?
Whom can I contact to get more information?

What is the definition of a minority-owned institution?

In August 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Section 308 of FIRREA established the following goals:

Preserve the number of minority depository institutions;
Preserve the minority character in cases of merger or acquisition;
Provide technical assistance to prevent insolvency of institutions not now insolvent;
Promote and encourage creation of new minority depository institutions; and
Provide for training, technical assistance, and educational programs.

Section 308 of FIRREA defines "minority depository institution" as any federally insured depository institution where 51 percent or more of the voting stock is owned by one or more "socially and economically disadvantaged individuals."

Why is the program important?

Minority-owned and de novo institutions that remain stable, operate in a safe and sound manner, and grow to a size that allows them to continue providing capital and financial services to a growing population will add strength and vitality to the local communities they serve and help provide economic stability to the U.S. economy. The Federal Reserve is committed to supporting the success of minority-owned institutions.

Why are minority banks important?

The Fed understands that minority banks are important to the communities they serve and vital to many inner cities. Many minority banks also follow a mission to help communities that are challenged with demographic and economic weaknesses, where the costs of operating have been generally higher, and the deposit base has been generally lower. Banks operating in such an environment may generally lag behind their peers in profitability. Despite the challenge to achieve profits comparable to standard community bank peers, many minority banks are committed to helping such communities. Minority banks that remain stable, operate in a safe and sound manner, and grow to a size that allows them to meet credit needs and provide financial services, often to underserved populations and markets, add strength and vitality to the communities they serve and provide stability to the U.S. economy.

What are the objectives of the program?

The objectives of the program include the following:

Address issues that might inhibit the financial and operating performance of minority-owned institutions and de novos.
Offer a network of outreach and relationship building, director training, and technical assistance.
Enhance the supervisory awareness of minority-owned institutions.
Provide guidance to minority-owned and de novo institutions.
Ensure a safe, sound, and accessible banking system aligned with Federal Reserve System objectives.

What are the components of the Partnership for Progress program?

The overall program consists of the following elements:

One-on-one discussions with minority bankers to determine their needs and goals.
Online content on topics relevant to minority-owned institutions as expressed by minority bankers.
Outreach programs designed specifically for the minority-owned institution audience.
Technical assistance tailored to meet the needs of minority-owned institutions.
Links to online tools and resources.
Training programs to increase examiner awareness of minority-owned institutions.

What tools and resources are available through the Partnership for Progress website?

The Partnership for Progress website contains certain demographic data for areas around the country, by metropolitan statistical areas. These data include information concerning population, income, unemployment, homeownership, and advanced education. Certain bank peer data will also be available, containing industry averages for banks designated as African-American, Asian, Hispanic, Native American, and a combined minority group. In addition, the site provides information on the historical significance and contributions of minority banks and individuals, as well as regulatory and supervisory guidance.

What is the life cycle of bank development?

Online content has been developed that relates to three distinct stages of bank development:

Start a Bank: Covers topics related to filing a membership application, charter selection, and certain challenges start-up institutions face.
Manage Transition: Designed for new institutions (typically five years old and younger) trying to reach and maintain stable performance in a competitive banking environment.
Grow Shareholder Value: Designed for mature institutions striving to achieve growth in a safe and sound manner.

How will the life cycle of bank development help banks?

The online content is organized into three easily accessible modules, representing three distinct stages of a bank's development. Each stage is divided into topics that were recommended by minority bank and de novo bank officials. The selected topics are intended to provide a brief explanation of the related issues. Applicable regulatory guidance and supervisory reference materials provide additional detail.

Why are some data not displayed in the demographic tables?

According to the U.S. Census Bureau, even if a geography meets the population threshold of 65,000, some very detailed tables might include estimates whose reliability are unacceptable. Since 2005, data release rules based on the statistical reliability of the estimates have been used to determine whether a table is published for a geography.

The main data release rule for the ACS tables works as follows. Every detailed table consists of a series of data cells that contain estimates. If more than half of those estimates are not statistically different from 0, then the table fails.

Each estimate is subject to sampling variability that can be summarized by its standard error. Dividing the standard error by the estimate yields the coefficient of variation (CV) for each of the estimates. (If the estimate is 0, a CV of 100 is assigned.) To implement the data release requirement, CVs are calculated for each of the table's estimates and the median CV value is determined. If the median CV value for the table is less than or equal to 61 percent, the table passes for that geographic area; if it is greater than 61 percent, the table fails. Tables that are too sparse, meaning that not enough data are available to adequately populate the data cells, will fail this test. In that case, the table will not be published for that geographic area.

How do I submit a milestone suggestion for the minority banking timeline?

All milestone suggestions should be submitted using the feedback form. Please provide clear detail and relevant supporting documentation including photos, if applicable. All suggestions will be reviewed by the Partnership for Progress program manager, and verified by certified archivists. Updates to the timeline will be made according to a pre-determined site maintenance schedule.

How will the program materials be made available?

Materials will be accessible from the program's web page. Banks may also contact the national coordinators in their Districts for additional material. In connection with the program, the Federal Reserve will provide information and materials at workshops around the country and in meetings with representatives from minority-owned institutions.

Does the program include FRB examiner training?

The program is designed to provide examination staff with a deeper understanding of minority bank issues, including how minority banks operate within their communities and the challenges they face. The national coordinators will work with the Federal Reserve System training and development staff to introduce concepts from the program into the System's examiner education program.

How did the program get started?

At the request of the Board of Governors, the Federal Reserve Bank (FRB) of Philadelphia expanded a new Third District minority bank program into a System-wide project. Several FRBs joined a workgroup led by FRB Philadelphia. While developing the framework, the group met with minority-owned and de novo institutions across the nation, trade groups, bank consultants, and other federal banking agencies. The workgroup members also attended regular interagency meetings related to minority-owned institutions and discussed the program with the National Bankers Association (NBA) and the Conference of State Bank Supervisors (CSBS). The program represents the Federal Reserve System's first attempt at providing MOI guidance in a formal System-wide program.

Who is coordinating the program?

The Federal Reserve Board of Governors has appointed a District coordinator at each Reserve Bank to oversee the program under the leadership and daily management of FRB Philadelphia.

District coordinators will work with the Partnership for Progress program manager to coordinate outreach activities for the minority-owned institutions they supervise within their District. Activities that the District coordinators may be asked to coordinate within their Districts include:

Discussions with minority institutions to determine their needs and goals.
Ongoing dialogue with District minority-owned institutions.
Participation with state or federal agencies in local interagency minority bank workshops.
Identification of potential enhancements to the Partnership for Progress program.

Whom can I contact to get more information?

For information about the overall program, you can call the organizers listed below. For specific questions about your bank, how the program may apply to your bank, or information on outreach programs, please contact the District coordinator in your Federal Reserve District.