Why Banking With a Minority Depository Institution Matters for Your Mission

Whether you run a nonprofit or a business with a guiding principle to give back to the community, you know that every decision you make can move your mission forward. This can include who you bank with. While it seems easy to pick a big-name bank and open an account, minority depository institutions (MDIs) can help you further your cause and help you feel good about who you bank with.  

MDIs are led or owned by individuals from minority groups, holding more than half the institution’s ownership or board seats. These banks understand the importance of nonprofits and businesses to the local communities and want to invest in your future. You can learn more about MDIs and how you can partner with them to invest in a brighter future for our community. MDI is more than a status. For the Commercial Bank of California, it’s a philosophy. 

What Is an MDI?

A minority depository institution (MDI) is a bank or credit union that is either majority-owned or majority-governed by a minority group. The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 created the idea of an MDI. This act defines a minority and typically includes Native Americans, Black Americans, Asian Americans, and Hispanic Americans. Not only is CBC a certified MDI, but it’s also the largest Latino-owned bank in California.

MDIs are important because they often serve underrepresented segments of the American population. This includes low-income, minority, rural, and underserved communities needing a reliable bank that understands their unique needs and goals. In many cases, the minority owners or minority governors of an MDI are part of the community the bank serves, making them uniquely positioned to help. 

MDIs can improve the economic climate in the communities they serve by offering the most needed financial products and services to make them more prosperous. They can also work with nonprofits that want to improve the community and help with financing and basic financial services needed by businesses within the community. 

The Federal Deposit Insurance Company (FDIC) and the National Credit Union Administration (NCUA) provide support and oversight to MDIs. They offer resources to guarantee deposits and explore the types of businesses and nonprofits that can ultimately benefit the area. To become an MDI, a bank or credit union must apply to the correct government agency to get the designation. 

Why Minority Depository Institutions Matter to Nonprofits & Businesses

If you’re a nonprofit or a business, does it really matter who you bank with? Yes, it does. As much as possible, you want to work with other businesses, suppliers, and financial institutions that align with your core mission. It makes it easier for you and them to understand each other’s needs and help to meet them. 

When you work with an MDI, your nonprofit or business reinforces its mission. Especially for nonprofits, your mission is one of service to others and your local community, and working with an MDI helps you live up to your mission. You want your business or nonprofit to help those who generally don’t get the help they need, and it’s the same with an MDI.

Sometimes, even when all things are equal, they still aren’t fair. This is when you need things to be equitable. Essentially, it means getting all the banking services and products you need to feel as supported as the next person. You might need more services and products than some people and fewer than others, who require more services than you do. An MDI knows what the businesses and nonprofits in their communities need to survive and thrive. 

If you care about the success of our diverse communities, you want to work with a financial institution that believes in inclusivity. As a minority owned or governed entity, an MDI understands the benefits of inclusion and works with everyone who comes through the doors.

Real Impact of Banking With Minority Depository Institutions

When you deposit funds into your savings or checking account, the bank takes part of that money and loans it to other people. When you bank with an MDI, your funds are being loaned to people within your community and businesses who are historically underserved or who struggle to get conventional funding from larger institutions, even though they have the necessary credit and financial history. You might find that your MDI offers microloans to help small businesses open and thrive, giving the community more access to the goods and services they offer.

As a whole, the economic health of the community improves when more and more businesses open within it and do business with the MDI. Nonprofits and businesses that partner with an MDI create a cascading effect of positive credit and financial effects for the community. 

MDIs hold real sway with the communities they serve. With your partnership, they can help more residents become homeowners and develop more initiatives that serve everyone. While other banks and credit unions are active in their local communities, an MDI uses its available funding for loans and services to invest in the economic growth of the entire community. 

Commercial Bank of California is an MDI That Can Partner With You for Your Financial Success

Your business or nonprofit has a mission statement, and you want to ensure that everything you do aligns with your core mission. Working with minority depository institutions can help you obtain and live up to that goal. You’ll be investing your money and financial well-being in a bank that understands the importance of your work and can help you grow a bright financial future. These institutions are more than financial partners—they’re part of the same communities you’re working to uplift.

Commercial Bank of California is an MDI as the largest Latino-owned bank in California. Our team believes in building a relationship with our clients and crafting products and services that help them meet their financial goals. We offer a shared commitment to community growth, inclusion, and financial empowerment. We want to work with you and help you be a part of how we serve the underrepresented and the community as a whole. Contact us today to get started.