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.