FDIC teams up with Microsoft and Truist to create fund to invest in minority-owned banks

fdic teams up with microsoft and truist to create fund to invest in minority owned banks

Sumary of FDIC teams up with Microsoft and Truist to create fund to invest in minority-owned banks:

  • Jelena McWilliams, chair of the Federal Deposit Insurance Corporation (FDIC), speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.
  • 3, 2021.Al Drago | Bloomberg | Getty ImagesThe Federal Deposit Insurance Corp.
  • will unveil this week a new investment fund backed by corporate giants that will offer stakeholders a way to channel much-needed capital to banks owned by and in support of people of color.
  • The new Mission-Driven Bank Fund will exclusively invest at banks that service minority, lower-income and rural communities that often suffer from a lack of long-term capital, according to documents seen by CNBC.
  • The project represents the latest government-backed effort to support minority-owned banks, which have struggled in recent decades because of failed loans, competitors that are larger as a result of mergers and acquisitions, and financial downturns that have an outsized impact on smaller banks.
  • “One of the things that I heard in the beginning, and in particular for Black banks, was a lack of capital.
  • Finding good capital to come to the banks was the No. 1 thing,” FDIC Chair Jelena McWilliams told CNBC on Monday.
  • The fund’s conception and design also implicitly endorse a new school of thinking on the best ways to support minority-owned, community-focused banks that center on the importance of long-term “patient” capital.

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