Bill Overview
Title: Ensuring Diversity in Community Banking Act
Description: This bill establishes and revises provisions related to minority depository institutions, community development financial institutions, and impact banks. The bill (1) expands the definition of minority depository institutions to include women-owned banks, and (2) establishes impact banks as depository institutions with total assets less than $10 billion and where a certain total dollar value of loans are extended to low-income borrowers. The bill establishes a program allowing minority depository institutions and impact banks to receive deposits from certain Department of the Treasury accounts through designated custodial entities. It also establishes the Minority Bank Deposit Program to prioritize the use of minority depository institutions to the maximum extent possible to serve the financial needs of federal departments and agencies. Federal banking agencies must issue rules allowing new minority depository institutions and impact banks three years to meet capital requirements.
Sponsors: Rep. Meeks, Gregory W. [D-NY-5]
Target Audience
Population: Individuals relying on minority depository institutions, community development financial institutions, and impact banks globally
Estimated Size: 30000000
- The bill targets minority depository institutions and impact banks.
- The bill impacts institutions with assets less than $10 billion, focusing on those providing loans to low-income borrowers.
- Minority depository institutions include those owned by minority groups and now will include women-owned banks.
- The legislation aims to direct federal and Treasury funds to these institutions, likely affecting their operations and potentially increasing their capacity to serve communities.
- Community development financial institutions, which often support underrepresented communities, will benefit from these changes, increasing access to financial services for those communities.
Reasoning
- The policy primarily affects minority depository institutions, community development financial institutions, and impact banks, which serve low-income communities. Thus, people using these services are affected.
- A small percentage of the population is directly served by these institutions, as these banks tend to have fewer assets but are deeply rooted in their communities.
- Women and minority bank owners are directly impacted, potentially improving their business viability and capacity to serve more clients.
- Low-income borrowers might see increased access to loans, while unbanked households might gain banking access through these institutions.
- Not everyone will be impacted; those without relationships with these banks or who do not fit the target demographics will likely see no change.
Simulated Interviews
Owner of a small manufacturing business (Atlanta, GA)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I think this policy could really boost my bank's ability to provide better loan options for my business.
- It may increase the amount of business support and finance options available to meet the needs of local minority entrepreneurs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 7 | 5 |
Teacher (Detroit, MI)
Age: 34 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- Access to more affordable banking could make a difference in saving for emergencies.
- Hopefully, the policy will bring more options and better customer service at my financial institution.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 8 | 5 |
Bank executive (New York, NY)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I don't expect this policy to directly impact my work or life.
- It seems more focused on niche institutions and doesn't affect the broader financial sector.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Social worker (Los Angeles, CA)
Age: 27 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- I hope this policy will make it easier for my clients to access loans and manage finances.
- Improving the reach of these banks could have a positive community impact.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 6 |
Retired engineer (Houston, TX)
Age: 68 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I hope this will help keep my bank open and thriving.
- Access to good banking facilities is crucial, especially in retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Homemaker (Seattle, WA)
Age: 45 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This policy sounds like it could bring much-needed attention and funds to banks serving people like me.
- I'd love to see expanded services and lower fees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Student (Chicago, IL)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- I'm concerned about whether my bank will get any support from this policy.
- Better services can help me focus more on my studies rather than financial worries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Entrepreneur (Miami, FL)
Age: 50 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- If this policy brings more funding options, it could really propel my business forward.
- Women-owned banks being included is encouraging for gender equality in business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Farm owner (Arizona)
Age: 39 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 7/20
Statement of Opinion:
- Better loan facilities could significantly stabilize my farm business.
- Reducing financial stress is crucial for us and policies like this give hope.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 4 |
Tech worker (San Francisco, CA)
Age: 31 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I don't think this policy will change much for people using large banks like me.
- It's great for underrepresented communities but has no direct effect on my financial choices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $80000000 (Low: $60000000, High: $100000000)
Year 2: $85000000 (Low: $65000000, High: $105000000)
Year 3: $90000000 (Low: $70000000, High: $110000000)
Year 5: $100000000 (Low: $80000000, High: $120000000)
Year 10: $120000000 (Low: $100000000, High: $140000000)
Year 100: $160000000 (Low: $140000000, High: $180000000)
Key Considerations
- The impact on financial markets' stability due to increased support for minority and community banks.
- Adjustments in the financial regulatory landscape influencing stakeholders.
- Potential need for increased oversight and compliance checks.