How Majority- and Minority-Owned Institutions Can Work Together

Majority and minority-owned banks can help each other in many ways.  The following are examples of investment tools and resource-sharing techniques that have been used successfully to create meaningful partnerships.

• Majority-owned banks can purchase the stock of, or make deposits in, minority-owned institutions to provide the capital needed to grow their franchises.  Minority owned banks can structure and market these offerings to majority banks.

• Majority- and minority-owned banks can establish two-way correspondent relationships on loan business.  Minority-owned institutions can make larger loans in excess of their legal lending limits if majority banks purchase participations in these transactions.  Likewise, majority institutions with large credit facilities might consider participating them to minority-owned institutions.

• Majority-owned banks might offer employee training and consulting on operations with minority-owned institutions. Minority-owned banks can provide incentives for their employees to take advantage of these resources.

• Majority-owned institutions might offer “officer-on-loan” programs to minority-owned banks. Minority-owned banks might take the initiative to join local professional associations and establish peer-to-peer relationships with their colleagues at majority institutions.

• Majority- and minority-owned banks can permit officers to sit on the board of directors of their respective banks provided they conform to the “small market share” exemption to management interlocks covered in [12 USC 3201 et seq.].