Financial Update (Fourth Quarter 2007)

Federal Reserve Develops Training Program for Minority-Owned Banks

photo of a man talking to coupleThe Federal Reserve is developing a comprehensive training program for minority-owned banks that will be introduced in 2008, said Sandra Braunstein, director of the Federal Reserve Board of Governors Division of Consumer and Community Affairs.

The program reflects the Fed's experience in helping minority-owned institutions and incorporates insights from the 2006 report on minority-owned banks issued by the Government Accountability Office.

The Fed's training and technical assistance program will be accessible through various means: classroom-style workshops, computer-based programs, and an online resource and information center, Braunstein explained. Her remarks came during Oct. 30 testimony before the U.S. House Subcommittee on Oversight and Investigations, which is part of the House Committee on Financial Services.

Covering the evolution of a bank
The training program includes three modules, each focusing on particular points in a bank's life cycle. For example, the first section deals with obtaining a bank charter and forming a bank. Module two is titled "Managing Transition in Years 1–5," and the third segment covers enhancing shareholder value and operating a bank in a safe and sound manner.

Transcript of Braunstein's testimony off-site image
Federal Reserve community development resources off-site image
2008 conference information off-site image

Across the United States, about 200 minority-owned depository institutions serve a broad range of communities. Many of the banks offer credit and financial services in traditionally underserved markets, Braunstein noted. The institutions have diverse ownership, including African-American, Native American, Asian, and Hispanic owners.

Program is part of the Fed's ongoing community work
This program is the latest Fed initiative to support minority-owned banks. For one, the Fed and other financial regulatory agencies hosted national conferences for minority-owned financial institutions in 2006 and 2007. Braunstein said the Fed plans to present the new training program at the 2008 Interagency National Conference next summer in San Francisco.

"We are dedicated to using our roles as supervisors, regulators, community development facilitators, and consumer educators to support the minority-owned institutions and other organizations that contribute to our robust financial services system—and the consumers who are vital to that system's success," Braunstein said.

November 13, 2007