What is the ECIP? Everything you need to know about the $80 million investment into M&F Bank.

Oct 21, 2022

The U.S. Treasury has invested $80 million into M&F Bancorp as part of the Emergency Capital Investment Program (ECIP). M&F Bank is using this funding to deepen our impact on small businesses and individuals in North Carolina by expanding lending and credit opportunities to low income and minority communities that have been disproportionately impacted by the COVID-19 pandemic.

We’re going to break down exactly what this means — for you, the community you live in, and M&F Bank.

What is the ECIP?

Through the ECIP, the Treasury has invested approximately $9 billion into Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) across the United States.

The goal is to provide funding and relief to underserved communities — ones severely impacted both by the pandemic and decades of neglect. Capital has long been withheld from these communities, and the ECIP will have a transformative effect across the country.

M&F Bank is one of 162 financial institutions invested in by the U.S. Treasury.



Why Was It Created?

The Consolidated Appropriations Act, 2021 allowed for the creation of the Emergency Capital Investment Program. It was officially launched by the U.S. Department of the Treasury on March 4, 2021.

The COVID-19 pandemic has had a profound impact on underserved and underprivileged communities throughout the U.S. The ECIP was created to support the recovery of small- and minority-owned businesses and consumers disproportionately affected by COVID-19.

The program aims to empower financial institutions that serve low-to-moderate income populations to increase access to capital through lending to individuals and small businesses that make up these communities.

To do this, the program will direct up to $9 billion in capital to CDFIs and MDIs. These institutions will use the funding to provide loans, grants, and forbearance for small and minority businesses and consumers in low-income and underserved communities.



What is a CDFI and an MDI?

A Community Development Financial Institution (CDFI) is a financial institution, including banks and credit unions, that helps facilitate growth in disadvantaged communities. In order to be considered a CDFI, it must be certified by the government. CDFI banks are committed to community development — at least 60% of their financing must be targeted to one or more low- and moderate-income (LMI) populations or underserved communities.

A Minority Depository Institution (MDI) is a depository institution, such as a consumer bank or savings association, in which at least 51% of voting stock is owned by minorities OR a majority of the board members are minorities AND the institution primarily serves communities whose populations are predominantly minority-based.



Why has the U.S. Treasury Invested $80 million into M&F Bank?

As a CDFI and MDI, M&F Bank is eligible for funding from the ECIP. Because of this status, we have an intentional focus on providing low- and moderate-income communities, individuals, and businesses with access to capital.

We have also developed a comprehensive lending plan that details how we intend to deploy the capital, which contributed to our ability to receive ECIP funding. Supporting low- and moderate-income communities has been a part of our model since we opened our doors, and the ECIP program allows us to intensify this focus.

We believe that this investment is a testament to the strength of M&F Bank and the health and soundness of our company and its stakeholders. It also allows us to amplify the positive impact we can make on the disadvantaged communities within the markets we serve across North Carolina.



What does this mean for the Communities M&F Bank Serves?

This investment will allow us to build on recent successes and expand our impact to new communities in North Carolina. The additional capital will be used to support businesses in low-income communities that have been disproportionately impacted by the economic effects of the COVID-19 pandemic.

In addition, we’ll continue our mission to provide capital, resources, and support to communities that continue to be affected by systemic neglect.

With this investment, we will be able to build on our existing offerings to create solutions that are specific to the needs of low- and moderate-income communities. This allows us to help reduce barriers to accessing funding.

This will be a transformational investment for M&F Bank. It will allow us to continue implementing technology enhancements, provide greater lending capacity in both current markets and additional communities, and build relationships with new financial partners to provide our customers with additional services.

We will also be able to provide more robust financial literacy platforms to benefit the communities we serve and upgrade facilities to extend our reach and impact.

Learn more about the ECIP and M&F by contacting us today. Be sure to follow us on social media, LinkedIn, Facebook, Twitter, and Instagram, to stay up to date on what we’re doing.

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