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Banks Praise Supreme Court's Gay-Rights Rulings

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The banking industry hailed two Supreme Court decisions Wednesday that expanded gay rights and struck down some restrictions on same-sex marriage.

In two landmark decisions, the court on Wednesday ruled that married gay and lesbian couples are entitled to federal benefits and declined to issue a ruling on California's Proposition 8 ban on same-sex marriage. That decision should effectively lift the ban, once again allowing gay and lesbian couples to marry in California.

Both cases had been closely watched in the banking industry, where high-profile diversity efforts have overcome anti-gay discrimination and some of Wall Street's entrenched conservative culture.

The court's rulings mean "it will be harder for companies to discriminate, and it's also going to be easier for gay and lesbian bankers to come out, because they're on increasingly solid ground," says Bill Donius, the former chief executive and chairman of Pulaski Bank in St. Louis and one of the very few openly gay bank CEOs.

"It's not a home run, but … it's way different than it was a day ago," he adds.

The rulings were also praised by some of the big banks that have vocally supported same-sex marriage and other equal rights. Companies including JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (NYSE:C) and Goldman Sachs (GS) are some of the most progressive employers in corporate America in terms of their nondiscrimination policies and the domestic-partner benefits they provide to employees, according to the nonprofit Human Rights Campaign Foundation.

"We strongly support the court's affirmation today of marriage equality," Goldman Sachs said on its official Twitter account Wednesday. "We believe that marriage equality lowers burdens and challenges imposed on employers, and will lead to building successful businesses and a stronger American economy."

It also posted a photo of a rainbow flag flying outside of what appeared to be its downtown New York headquarters.

Jamie Dimon, JPMorgan's chairman and CEO, called the rulings "good for our company and clients, but more importantly, it's the right thing to do."

Citigroup said in an email that it welcomed the ruling overturning part of the Defense of Marriage Act, and that it "promotes a work environment where diversity is embraced and where our differences are valued and respected."

Wells Fargo's (WFC) official Twitter account did not directly address the rulings, but it posted messages reiterating its support of Gay Pride events taking place this month.

Other financial firms also praised the rulings; in an emailed statement, Moody's CEO Raymond McDaniel called them "a significant step forward in ensuring workplace equality."

In April, Goldman hosted a 300-person conference devoted to lesbian, gay, bisexual and transgender equality on Wall Street. The event was organized by Out on the Street, an organization founded by former Merrill Lynch banker Todd Sears, who on Wednesday gave qualified praise to the Supreme Court's rulings.

"These decisions bring the federal government more in line with the position common to much of corporate America, particularly Wall Street and the financial services industry," Sears said in an emailed statement.

But "despite these unquestionable advances, the issue is not fully resolved," he added, in part because the ruling did not affect states' abilities to refuse to recognize same-sex marriages performed in other states.

"Also, from a workplace perspective, it is still legal in 29 states to fire someone for being gay and in 35 states you can be fired for being transgendered," Sears said. "For global companies, who seek to operate seamlessly from country to country, it is ridiculous to treat same-sex married couples differently in New York than in New Jersey."

This argument has been echoed by several senior bank executives in recent weeks, who say that the industry's need for smart and talented employees has helped them overcome the industry's onetime overt discrimination against lesbian and gay employees.

But that progress is far from complete. Donius, for example, says that he knows of three bankers in their 20's and 30's in Missouri who "are still not out at work, because they don't feel they can be out at work without potentially risking their upward mobility" at their companies.

Donius adds that he hopes the court's rulings will eventually change those sorts of conditions. For smaller companies operating in states where it is still legal to fire employees based on their sexual orientation, "individual banks are going to have to look at their individual policies," he says. "I think they're going to have reevaluate those policies and decide, 'Is this fair and just, or are we basically condoning discrimination?'"

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