Minority-Owned Bank Report Spurs Talk of Legislative Fix
Sloan, Steven, American Banker
WASHINGTON -- A Government Accountability Office report on minority banking released Tuesday prompted some lawmakers to question whether Congress should enact laws that would strengthen protection for these institutions.
The report, released last year and updated this month, found that banking regulators have done little to judge whether their efforts in minority communities have been effective. Since the initial version of the report was released, the GAO said, regulators have begun to survey banks on the success of minority outreach, but it is too soon to draw conclusions.
Still, a House Financial Services subcommittee hearing showed divisions between regulators and some of the 205 minority-owned banks in the United States.
"To put it bluntly, we are tired of the banking agencies focusing solely on training and ignoring the more difficult but ultimately more important task of meaningfully addressing the challenges facing minority banks," Robert Patrick Cooper, a senior vice president and the general counsel at the nation's largest African-American-owned bank, the $638 million-asset OneUnited Bank, told lawmakers. "We can go many places for training, but the regulators thus far steadfastly have refused to focus on the benefits and changes they are uniquely empowered to provide."
Rep. Maxine Waters, D-Calif., told representatives of each banking agency that she did not want to blame them, butthat they should do more to support minority banking. "Let me say to our agencies testifying today that the report on minority banking ... is an indictment on your ineffectiveness," she said. "We do not believe that our agencies who are charged with this responsibility - and it's pretty much documented in this report - are doing enough."
Regulators said they have devoted significant energy to minority institutions through a variety of programs.
"Through our regulatory, supervisory, and community development functions, we consistently provide assistance that addresses the unique challenges and needs of minority-owned banks, while at the same time holding these institutions to the same supervisory standards that we apply to all state member banks" said Sandra Braunstein, the Federal Reserve Board's director of consumer and community affairs. …