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NCUA Board Member Todd M. Harper Statement on the Minority Depository Institution Briefing

June 2020
NCUA Board Member Todd M. Harper Statement on the Minority Depository Institution Briefing

As Prepared for Delivery on June 25, 2020

Thank you, Martha and Pam, for your work on the NCUA’s 2019 Minority Depository Institution Report to Congress.

MDIs are a critical part of our country’s system of cooperative credit. As you noted in your presentation, the one in ten federally insured credit unions, which self-designate as MDIs expand access to credit for people of color and support minority- and women-owned businesses. They are also often the only financial institution in underserved areas.

Financial Health

Last year, as part of my efforts to get “into the field,” I visited Financial Health Federal Credit Union. The credit union is a minority depository institution with 10,000 members who are primarily low-income and live in a financial desert within Indianapolis. But for Financial Health Federal Credit Union, there would not be one branch of a financial institution in an entire zip code.

The credit union shared information with me about their strategies to educate their members about financial wellness. While there, I also learned how a city bus driver had fortuitously become the credit union’s leading marketer. Each day, the bus driver had become frustrated while driving riders to and from high-cost payday lenders. She knew that these individuals needed access to responsible and affordable credit, so one day she stopped at the credit union and asked them for their brochures. When she was handed a few of the flyers, she insisted she needed many more.

Today, that bus driver is delivering more and more of her riders to the Financial Health Federal Credit Union instead of a payday lender. And these new members of the credit union are obtaining access to affordable small-dollar loans, gaining financial literacy and budgeting skills, and building credit histories.

Commitment to MDIs

By law, the NCUA must allocate resources and efforts toward preserving minority depository institutions, like Financial Health Federal Credit Union, and encouraging new ones, like Otoe-Missouria Federal Credit Union, which the NCUA chartered last year.

This statutory requirement reinforces the importance and value of diversity, so we continue to create a better, stronger and more responsive credit union system that includes everyone.  In doing so, we can ultimately create a “more perfect union.”

Because of the vital work performed by MDIs for their members and the unique services they provide their communities, I am fully committed to supporting MDIs and providing them with needed resources like training, grants, loans, technical assistance, and mentoring opportunities.

According to this most recent report to Congress, nearly nine out of ten MDI credit unions report total assets of $100 million or less, compared to seven out of ten for all federally insured credit unions. Nearly eight out of ten MDI credit unions have the low-income credit union designation, compared to about five in ten federally insured credit unions.

For these reasons, MDI credit unions play an essential role in meeting the financial needs of communities of color and historically underserved and unbanked groups around the country. To preserve and grow these important financial institutions, we need to increase the agency’s support for the MDI Mentoring Pilot, which encourages relationships between low-income designated credit unions as mentors and small MDIs as mentees.

The agency is currently accepting grant applications through July 31 for the mentorship program. I encourage MDIs to apply.

We also need to reinstate the consulting services provided by the NCUA’s Office of Credit Union Resources and Expansion – a request that I have heard over and over again when I speak with credit union leaders across the country.

The agency should continue to ask Congress to provide more money for the Community Development Revolving Loan Fund so that we can help MDIs better weather the COVID-19 pandemic. Because demand for these grants exceeds the supply, I have advocated for an additional $10 million in funding.

MDI Actions

The NCUA should also ramp up its outreach, to encourage more credit unions that qualify to designate their credit unions as MDIs. One of the ways we can do that is to create a more robust MDI program page on the NCUA website. Additionally, we should make the MDI forum an annual event and organize regional collaboration roundtables that bring together MDIs and potential partners.

Knowing more about MDIs will help us to better allocate our support services and tailor programs in CURE to better serve credit unions. For example, more research on MDIs could help us to understand why operating expenses are 61 basis points higher on average at MDIs compared to all federally insured credit unions.

Although we have focused on MDIs this morning, I want to highlight an important tool regarding the broader issue of diversity and inclusion. That issue is the NCUA’s voluntary diversity self-assessment available at

We need to continue to encourage more credit unions to complete the survey.

The business case for diversity and inclusion is very clear:  An investment in diversity and inclusion can result in better performance and growth. And, the NCUA’s voluntary diversity self-assessment is a great place to start that journey.

In closing, the NCUA must support MDIs and grow our MDI program, especially if we are going to close the wealth gap and advance economic equality and justice.

Martha and Pam, thank you again for producing this year’s MDI report and for your ongoing efforts to expand access to responsible credit and thrift and working to ensure that no one gets left behind.

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