The Federal Deposit Insurance Corp. (FDIC) is launching a new capital investment vehicle, the Mission-Driven Bank Fund, to support insured Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs).
MDIs and CDFIs are banks, savings banks, and savings associations that provide capital and financial services to minority, lower income, and rural communities. The Mission-Driven Bank Fund will channel private capital and other resources to these institutions, allowing them to amplify the impact of investments in the communities they serve.
Microsoft and Truist Financial are anchor investors in the initiative while Discovery, Inc. will join as a founding investor in the fund. The combined initial commitment to the effort is $120 million, with additional investments expected.
“Microsoft and Truist have answered the call to become anchor investors and to assist the FDIC in developing this Fund for the benefit of mission-driven banks and, most importantly, the people and places these institutions serve,” FDIC Chairman Jelena McWilliams said. “It is our hope that with the commitment of these industry leaders, more private equity investors will join the growing ranks of those committed to building opportunity and prosperity where this support is needed the most.”
In designing the fund, the FDIC engaged approximately 70 CEOs of MDIs and CDFIs, as well as potential investors, investment consultants, and philanthropic organizations.
“Supporting mission-driven banks aligns perfectly with Microsoft’s commitments to address racial injustice and inequity,” Anita Mehra, corporate vice president of Global Treasury and Financial Services at Microsoft, said. “The Mission-Driven Bank Fund will enable banks to more effectively manage risk, leverage innovative technology solutions, and directly increase funds to diverse and underrepresented communities,” Mehra said. “We look forward to seeing the continued opportunities this will help provide for mission-driven banks and the communities they serve.”
The fund supports the FDIC’s commitment to preserving and promoting mission-driven banks.
“The partnership with Microsoft and the FDIC, as an anchor investor in the Mission-Driven Bank Fund, is a direct investment in advancing our purpose to inspire and build better lives and communities,” Truist CEO William Rogers Jr, said. “MDIs and CDFIs play crucial roles serving the needs of minority and rural neighborhoods, and Truist has an established history of partnering with these organizations. We’re extending this commitment through an innovative approach to capital investments and we believe this will significantly enhance these institutions’ ability to provide positive outcomes for our communities.”
The FDIC will retain an advisory role to support the fund’s mission focus, but will not manage, fund, or be involved in any investment decisions.
“Our investment in the Mission-Driven Bank Fund advances the goals of RISE, our global commitment to reducing inequality and supporting empowerment, by providing minority and rural communities with much needed access to capital and resources. We are proud to be an initial investor in this fund and hope that by joining forces with other private funders, we can drive real opportunity and make a difference in people’s lives and in the communities we serve,” David Zaslav, president and CEO of Discovery, said.