The FDIC today launched its new mission-driven bank fund, through which private investors—including corporations, financial institutions and philanthropic organizations—have the opportunity to support mission-driven banks that support low- and moderate-income, minority and rural communities.
Mission-driven banks—which include minority depository institutions and community development financial institutions—will be able to make pitches to the fund for potential investments that will help them build size, scale and capacity to provide affordable financial products and services and stimulate economic and community development.
The fund will be managed by a private sector fund manager, and the FDIC will not be involved in funding or investment decisions. To date, the fund has secured $120 million in investments to date from two anchor investors and one founding investor, and FDIC Chairman Jelena McWilliams said she hopes that “more private equity investors will join the growing ranks of those committed to building opportunity and prosperity where this support is needed the most.”
The FDIC is currently in the process of selecting and onboarding a private fund manager, and expects to finalize guidelines for the pitch process by the end of the year, with the goal of accepting a first round of pitches by the first quarter of 2022.