A bill introduced in the House would reform the Minority Bank Deposit Program (MBDP) to encourage federal agencies to utilize minority-owned banks and low-income credit unions as financial agents and depositories.
MBDP was created in 1969 to help minority-owned banks obtain access to reliable and stable sources of funding to better provide loans within their local communities, many of which are underserved and lacking affordable financial services.
Although over 80 minority banks and low-income credit unions are certified to work with the federal government under the MBDP program, most of the certified institutions do not have an existing relationship with the federal government. A task force appointed by the Congressional Black Caucus took on the challenge of reforming MBDP after reports that the 2008 recession hit the black banking sector especially hard.
“Limited access to affordable financial services is a persistent problem in my community, and many other underbanked communities around the US. Since the financial crisis, over 5,000 bank branches have closed their doors, leaving communities like mine with less safe and costlier financial services options,” said Rep. Gregory Meeks (D-NY), who co-chairs the Congressional Black Caucus’s Economic Development and Wealth Creation Task Force along with Reps. Joyce Beatty (D-OH), and Dwight Evans (D-PA).
“Our bill strengthens minority-owned banks, improves the financial health of the communities in which they serve, and provides more Americans with reliable and affordable banking options. I urge all of my colleagues to join us in this effort,” Meeks said.
Meeks said the number of minority-owned and women-owned banks and credit unions have plummeted since the 2008 Financial Crisis.
“In our commonwealth, the Pennsylvania MBDA Business Center has generated over $290 million contracts and financing, and created hundreds of jobs since 2004,” Evans added. “The numbers don’t lie—they clearly demonstrate the viability of a model that creates jobs, spurs economic growth and facilitates community investment. I am pleased to join with my colleagues to introduce the Minority Banking Deposit Program, which reinforces, strengthens, and modernizes these critical financial institutions.”