Our Bank Deposit Financial Assistance Program was developed for the purpose of strengthening and expanding the Nation's minority and women-owned small business enterprises. In order to classify as “minority” the institution’s majority ownership must include African Americans, Hispanic Americans, Asian Americans, American Indians, Eskimos, Aleuts, and women. The minority institution must certify minority ownership with the Department of the Treasury and appear on Treasury’s Roster of Financial Institutions Participating in the Federal Government’s Minority Bank Deposit Program.
In keeping with the intent of the Program, we purchase certificates of deposit from those minority financial institutions which desire to participate in the Program. The institutions in turn use the principal obtained from purchase of the certificates of deposit by the Department to provide development loans to minority and women-owned small business enterprises. We believe that the opportunity for full participation in our Nation's free market enterprise system by minority and women-owned small business enterprises is essential for a strong national economy.
How does the program operate?
Administrative financial institutions serve as “trustees” for our Bank Deposit Financial Assistance Program. In order to become administrative financial institutions, banks must first pass a financial evaluation to determine their suitability to act as a “trustee.” Once approved to participate in the program, we sign a Declaration of Trust agreement with the administrative financial institution describing each party’s responsibilities for the program. As trustee, the administrative financial institution administers the investment of the Petroleum Pricing Violation Escrow Funds in the minority financial institutions participating in the program.
Administrative financial institutions may invest up to $100,000 in six-month certificates of deposit in one or more minority financial institutions participating in the program. Limiting investments to $95, 000.00 provides for Federal Deposit Insurance Corporation (FDIC) insurance coverage of $250,000 for both the principal and accrued interest. In order for an minority financial institution to be approved for participation in the program, it must meet the following three criteria: (1) classified as a minority-owned financial institution by the U.S. Department of the Treasury, (2) maintain FDIC insurance coverage, and (3) meet the minimum requirements of FDIC regulations for adequately capitalized, as well as, our requirements for participation as defined by the Office of Economic Impact and Diversity. Minority financial institutions are required to sign a “Participation Agreement” with us in order to receive these deposits.
How are institutions added?
Expanding the Bank Deposit Financial Assistance Program involves adding additional administrative financial institutions and minority financial institutions to the program. These additional institutions go through an evaluation process before participation in the program is granted.
Interested in becoming a trustee bank?
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How does a bank qualify as a Minority Financial Institution?
In order to qualify as a minority financial institution you must certify its minority status with the U.S. Department of the Treasury and be adequately capitalized by FDIC criteria. Minority status is determined by the Treasury Certification Form. The minority financial institution must sign and return the Participation Agreement along with the appropriate wire transfer instructions for receipt of the deposit from the administration financial institution and automated clearing house instructions for us to collect the interest semi-annually. For help with Automated Clearinghouse transactions, please contact: Kyong Rhee and Dwight Williams