Agency Quietly Erased 'Minority' From the Rule That Protects Minority-Owned Banks
To comply with Trump's anti-DEI crusade, the Office of the Comptroller of the Currency strips out the word “minority” from federal banking rules, worrying institutions that serve Black communities.
While most of the country was thawing out their Juneteenth meat or trying to see if they could buy an African soccer outfit off Temu, the Office of the Comptroller of the Currency—the federal agency that regulates national banks— issued a five-page bulletin that quietly rewrote three decades of policy on what counts as a “minority depository institution.”
If you’ve never heard of an MDI, here’s all you need to know:
Banks are racist.
This is not my opinion. According to multiple studies, racial disparities at many large financial institutions are unrelated to credit or income. The data also show that white-owned banks are more likely to lend to Black borrowers when their lending processes are automated. Since 2008, JPMorgan Chase & Co., Bank of America, Wells Fargo, Citigroup and U.S. Bank have paid billions to settle claims of racial discrimination.
Apparently, banks think banks are racist.
In fact, whenever anyone asks me to “name one thing Obama did for Black people,” I remind them that his Department of Justice successfully sued the five biggest banks in America for systemic discrimination.
Conversely, banks built by and for Black, Hispanic, Asian-American, and Native-American communities show up when Chase and Wells Fargo won’t. So, in 1989, Congress created the designation of minority depository institutions to protect and grow these banks. And because mainstream banking has a long, well-documented history of redlining Black neighborhoods, mortgage discrimination, auto loan bias and even cashing checks, the MDI designation comes with access to grants, technical assistance and federal deposits.
Until Trump changed the rules.
Now, everyone in Black banking is asking whether this is just bureaucratic housekeeping or the first crack in a foundation that took 37 years to build.
What Actually Changed
The OCC’s new policy statement still defines an MDI the same basic way the 1989 law does: a national bank that’s at least 51% owned by “socially and economically disadvantaged individuals.” What's gone is the OCC's own long-standing interpretive guidance—the part where the agency explicitly recognized that ownership by members of a minority group satisfies that standard. Specifically, the word “minority” has been erased from the very definition of an MDI, which the 1989 law defines as “any black American, Native American, Hispanic American, or Asian American.”
Put simply, according to the old rules, all Black-owned banks had MDI status. But now, a bank that is 100% Black, Hispanic or Native American-owned won’t necessarily qualify as “minority-owned,” unless…
And there’s the problem. The new rules don’t actually define a “socially or economically disadvantaged individual.” It gives the OCC the power to do it. But the agency has quietly removed the specifics of how it will apply that law, and no one at the OCC has publicly said what will replace it.
The OCC frames this as routine. Citing Executive Order 14219, the Department of Government Efficiency directive to “clean up” burdensome regulations, the OCC bulletin notes that it also deleted references to outdated agency programs to “minimize confusion.” The new rules also guarantee that banks that held MDI status before June 16 will retain that status, even if their ownership changes.
Still, no one knows what qualifies as “socially disadvantaged.” By removing the word “minority,” does that mean a bank’s owners have to be poor to qualify as Black-owned? If Elon Musk opens a bank in a predominantly white community filled with Karens who won’t fuck him, does that mean he’s “socially disadvantaged”? Can Target open a bank in its stores and claim it has been “economically disadvantaged” by the boycott? Will Jamal Bryant tell us he’s depositing his church’s money there to support minorities? No one knows!
I do.
The Justice Department just made it almost impossible to prove racial discrimination...again. The U.S. Department of Transportation is making similar efforts. And Trump Equal Employment Opportunity Commission Chair Andrea Lucas recently moved to rescind a 50-year-old federal EEOC rule that protected minority workers from discrimination.
“The rule has proved a barrier to her efforts to bring lawsuits on behalf of white men who say they were discriminated against at work,” the Intercept reports. “The agency has filed lawsuits under her watch on behalf of white men at the New York Times and Coca-Cola, as well as investigations into Nike and Northwestern Mutual.”
According to bankers who spoke to ContrabandCamp, the new change won’t simply make it more difficult for Black-owned banks to become MDIs. If this administration believes white men are “socially disadvantaged”…
Then white people can own “minority-owned” banks.
Why Black-Owned Banks Are Nervous
“The OCC’s revised policy removes the established understanding that ownership by members of minority communities satisfies the statutory designation standard,” reads a statement from the National Bankers Association, a trade group that represents MDIs across 43 states.
"[T]he NBA is concerned that the change introduces real uncertainty; for institutions seeking designation and for existing MDIs navigating future growth and capital transactions, uncertainty that could chill the very formation and preservation of MDIs that the law was enacted to encourage.”
NBA (not that one) President and CEO Nicole Elam didn’t mince words in her response. While she called the move disappointing, she noted that the new policy doesn’t affect existing MDIs, the FDIC, the Federal Reserve or the National Credit Union Administration, which together oversee the overwhelming majority of the nation’s MDIs. For now, the new rules only affect the banks that Trump has the power to influence…
“For now” is doing a lot of work in that sentence.
The NBA’s real concern isn’t what happened on June 16—it’s what happens next. If a bank seeking new MDI status or an existing MDI going through a merger, recapitalization or ownership change can no longer point to clear federal guidance saying “minority ownership counts,” it’s left negotiating in the dark with examiners using an undefined standard. For an industry where access to capital is already the central struggle, that kind of uncertainty isn’t an abstraction. It’s the difference between a bank successfully bringing in new minority investors during a capital raise and that deal falling apart over ambiguity about whether the new ownership will still qualify.
There’s also the fear of contagion. The FDIC and the Fed haven’t touched their own MDI rules, but these agencies tend to share the same regulatory philosophy, especially when it’s being pushed by the same executive order across the entire federal government. If the OCC’s stripped-down approach becomes the model, the protections at sister agencies could be next.
Meanwhile, the NBA is trying to thread a needle: hold the OCC accountable without setting off a panic that could destabilize confidence in MDIs themselves. They have emphasized that the “overwhelming majority” of MDIs are untouched…
For now.
“We are asking Treasury and the other banking regulators to stand with us in preserving a framework that Congress built and that has served this country well,” Elam added.
The law that established MDIs actually requires the Treasury Department to consult with federal banking regulators before changing rules and gives Congress oversight of the agency. While this gives the NBA a real lever to pull—and it has already signaled it intends to pull it—in an administration that has aggressively targeted diversity-related federal policy, a rule built around recognizing “minority” ownership was always going to be in the crosshairs eventually.
Why, though?
Why do this?
Well, this has always been the plan. Again, this is not an opinion. You can read it for yourself in the conservative blueprint.
Under the Biden Administration…Treasury has created several new offices to promote “equity” and has made this its first of five strategic goals in its Fiscal Year 2022–2226 Strategic Plan. “Equity” is identified as a cross-cutting theme in 15 of 19 of the plan’s objectives.
The avowed purpose of these initiatives is to implement policies that deliberately favor some races or ethnicities over others. The casual acceptance and rapid spread of racist policymaking in the federal government must be forcefully opposed and reversed.
While the policy doesn’t apply to most MDIs, Black-owned banks are disproportionately regulated by the OCC. On Dec. 31, 2025, the OCC supervised more than a quarter of all Black-owned banks in America.
And to be clear: No Black-owned bank lost its designation this week. But the federal government just removed the language that made it harder for Black-owned banks to get MDI status. More importantly, they made it easier for white men to be classified as “minorities.”
Besides that, nothing has really changed…
For now.