As a nation of immigrants, we thought we would take the opportunity that Independence Day offers us to champion our nation’s Minority Depository Institutions (MDIs). (A Minority Depository Institution, or MDI, is a bank or credit union that is at least either 51% owned by minorities and/or serves a majority of one or more minority groups.) The first MDI on record was Freedman’s Savings & Trust Company, Lexington, KY, which was established 156 years ago. More commonly referred to as Freedman’s Bank, this bank is historically significant as the first bank established to “provide economic opportunity to newly emancipated Americans” (JRN 37:12).
Sadly, the economy after the Civil War was volatile. That, coupled with a lack of sufficient oversight, caused the closure of the bank in 1874—long before the FDIC came along with deposit insurance in 1933. Over 61,000 depositors lost nearly $3 million. Comptrollers (plural) tried for decades to return the lost deposits, but after years of waiting, they only regained a fraction.
It took a full century for Congress to take up any kind of meaningful legislation aimed at helping serve the financial needs of minorities. The Community Reinvestment Act, passed in 1977, was aimed at preventing discrimination and redlining and promoting fair and unbiased investment throughout the entire service area of a bank or credit union. This helped but was far from a panacea.
There is no mistaking the benefits that MDIs can, and do, provide to their communities. However, up until 2020, the number of MDIs was on the decline. For the first time in recent memory, the number of MDI’s increased.
Today, there are currently 142 bank and 527 credit union MDIs operating across the country. We know there is a lot of interest by both minorities and non-minorities in investing in these institutions. To facilitate that, we have provided a downloadable list of all MDIs below. All institutions listed are linked to Bauer’s Star-Rating pages on our website. And, if the institution has a website, you may access it from there as well.
One, 5-Star Liberty Bank and Trust in New Orleans has acquired more Black and Asian American MDIs than any other institution in the past 20 years. These are not mere takeovers, but an effort to maintain the MDI status and continue to serve the community as an MDI. Its mission is an inspiration:
At Liberty Bank, we're passionate about helping more people achieve more freedom. There's real freedom here-the freedom you have as an individual to attain your goals, as a business to achieve your idea of success or even as a community that is gathering strength to reach its full potential… Trust Liberty Bank. There's freedom here.