The Federal Deposit Insurance Corporation (FDIC) has launched a “Mission-Driven Bank Fund” to support minority depository institutions and community development financial institutions.
The investment vehicle is backed by Microsoft and Truist Financial Corporation, alongside Discovery – owner of TV networks including Discovery and Eurosport – as a founding investor, bringing the initial commitment to $120 million.
The fund will provide capital and financial services to minority, lower income, and rural communities as part of a wider effort across the US banking sector to provide affordable financial products and services to individuals and businesses. It is also aimed at stimulating economic and community development.
FDIC chair Jelena McWilliams said: “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.
“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.”
Anita Mehra, corporate vice president of global treasury and financial services at Microsoft, added that the initiative “aligns perfectly with Microsoft’s commitments to address racial injustice and inequity”.
“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.
The FDIC has made a sustained effort to target minority and underbanked individuals. In April, the agency launched its Get Banked campaign in Houston and Atlanta to promote financial inclusion, and it has since launched a “tech sprint” to find solutions to serving the US’s unbanked and underbanked populations.
In May, trade groups including the American Bankers Association called for more action from banks and policymakers to bring banking services to unserved or underserved audiences.
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