Congresswoman Maxine Waters (D-CA) and Congresswoman Joyce Beatty (D-OH) released a 56-page report Thursday that found that the financial services industry remains white and male and that banks need to be held accountable for their failure to be inclusive.
The report entitled “Diversity and Inclusion: Holding America’s Large Banks Accountable” documents the attempts by Waters, chairwoman of the House Financial Services Committee, and Beatty, chairwoman of the Subcommittee on Diversity and Inclusion, to look at the diversity practices of 44 financial institutions. On behalf of the Committee, Waters and Beatty sent requests to the banks asking for their diversity and inclusion data and policies and found the banks to be widely failing to meet their commitments to diversity and inclusion, even though they say otherwise.
“This landmark report marks the first of several deep dives the Committee will take into the diversity practices of financial services industries,” Waters wrote in the report. “I hope that banks and others will pay heed to these recommendations and work to ensure their institutions are as inclusive and diverse as the customers and communities they serve.”
The report follows two Committee hearings last March and April, in which financial services leaders say they believe diverse, inclusive organizations are more profitable and productive. Despite the talk, however, the report found banks had taken little action in terms of diversifying their workforces and leadership, as well as bank boards of directors, suppliers and asset managers.
Further, the report found banks conducted “limited spending and investments with diverse firms.”
One way banks get away with this is by failing to fully disclose their diversity and inclusion data or policies, the report found. Plus, there hasn’t been much pressure by the Office of Minority and Women Inclusion (OMWI), created out of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), to make banks report this data. OMWI allows banks to submit this information voluntarily, according to the report.
Because of this failure to submit diversity and inclusion numbers, Waters and Beatty asked the 44 largest banks and savings and loan holding companies—those that had at least $50 billion in assets or more—to share their diversity data with the Committee. All 44 institutions responded although not all responded fully, according to the report.
Now the congresswomen are asking their colleagues to get tougher on this issue.
To make banks comply with Section 342 of the Dodd-Frank Act and to “increase transparency into banks’ diversity and inclusion results,” the report is asking Congress to consider legislative action to force banks to improve their diversity and inclusion numbers by:
- Requiring that they share diversity and inclusion data with their regulators and the public;
- Requiring banks to track and make efforts to increase their spending with diverse firms; and,
- By requiring banks to publicly disclose the diversity of their boards.