Meeks Minority Bank Bill Passes HFS Committee Markup

Washington, DC – Yesterday, Congressman Gregory W. Meeks' minority banking bill passed out of the House Financial Services Committee with a bipartisan vote of 52-0. The legislation, the Ensuring Diversity in Community Banking Act of 2019 (H.R. 5322), puts forward regulatory initiatives to preserve and promote minority banks and credit unions. It strengthens programs that provide capital to these crucial institutions and creates an Impact Bank designation for community banks that predominantly serve low-income communities.

"Minority banks and credit unions are disappearing at an alarming rate, with devastating implications for under-banked communities of color across the country. Low-income communities in banking deserts are increasingly reliant on predatory payday loans, or other options that cause them to fall in debt traps. My bill clears hurdles faced by Minority banks and credit unions, creating a new Impact Bank designation for banks that lend predominantly to low-income communities. The bill is an important step in ensuring that banks and credit unions that serve under-banked minority and low-income communities remain key pillars of the American banking ecosystem. I look forward to bringing the bill to the House floor for a vote and having a Senate sponsor introduce it in the other chamber," said Congressman Gregory W. Meeks.

Research confirms that Minority banks and credit unions play an active role in addressing persistent discrimination in banking, as they are far more likely to serve underbanked communities of color and low and moderate income (LMI) communities than both large banks and non-minority owned community banks. As a result of the financial crisis of 2008, and the disproportionate impact of the housing crisis and recession on minority communities, the number of MDIs shrank by over 30% over the following decade, falling from a peak of 215 institutions in 2008 to 149 at year-end 2018.

The bill builds on findings from a series of hearings held in the House Financial Services Subcommittee on Consumer Protection and Financial Institutions, including two consecutive hearings on October 22 and November 20 on the state of Minority Depository Institutions (MDIs). By rejuvenating MDIs, this legislation will promote investments in communities of color and increase access to financial products in underserved areas.