What is an MDI, and How Does It Benefit a Credit Union?

A minority depository institution, or MDI, credit union has a majority of its current members, board of directors, and the community it serves fall into one of the “eligible minority groups” defined in federal law: Black American, Asian American, Hispanic American, or Native American.

Credit unions self-certify to be MDIs through the NCUA’s online credit union profile. More than one in 10 federally insured credit unions have made that certification.

That’s what MDIs are; what do they do?

MDIs serve people and communities that are often low-income and underserved by financial services. It is not uncommon for an MDI to be the only source of affordable, insured financial services in its community. So, they play an essential role in helping the people in those communities build a measure of financial security and stimulating local economic activity. Some MDIs offer financial literacy programs for members and create partnerships with community-service organizations. Through these efforts, MDIs promote greater inclusion in the financial system.

More than 400 MDIs are also low-income-designated credit unions, and more than 100 are designated as community development financial institutions.

One significant benefit of MDI certification is access to Community Development Revolving Loan Fund grants and loans. For the 2023, grant round, Congress added the MDI certification as a qualifier for CDRLF funding. Previously, an MDI was required to also be a low-income credit union.

These grants provide financial support in the form of loans and technical assistance grants that help credit unions support their communities. For 2023, the agency has an MDI capacity-building grant initiative as part of the grant round. Through the CDRLF, MDIs also can receive funding for training, digital services and cybersecurity, consumer financial protection, underserved outreach, impact through innovation, and small credit union partnerships.

This year’s grant round closes June 30, so visit our Grants page for information about applying.

The NCUA in 2015 launched its MDI Preservation Program to provide technical assistance and training targeted for these credit unions. In 2022, the agency introduced its Small Credit Union and MDI Support Program to allocate staff hours in each of its regional offices specifically to provide these credit unions with help on challenges they face. (See the companion article on this program)

Becoming an MDI can also be a source of pride for credit unions that are committed to serving minority communities. By becoming an MDI, a credit union can show its dedication to promoting financial inclusion and economic opportunity in underserved areas.

To learn more about MDIs, visit our MDI Preservation Program webpage. If you have questions about MDI certification, please contact us at [email protected].