House lawmakers at odds over requiring banks to report diversity data
WASHINGTON — A House Financial Services Committee report on the diversity efforts at banks with over $50 billion of assets has sparked a dispute between Democrats and Republicans over whether the industry should be required to report diversity data.
The staff report found that only 29% of banks' senior and executive level positions are held by women. Racial and ethnic minorities represented only 19% of the senior- and executive-level workforce at banks. However, the committee did not provide equivalent data on management diversity for the rest of the labor force for comparison, and some of the data in the report bolstered the industry's case that its diversity efforts are getting stronger.
But lawmakers who met Wednesday to discuss the report focused most heavily on how transparent banks are about their diversity levels.
The committee reported that 27 of the 44 banks examined in the report said they conduct internal reviews of gender pay equity, but only 15 report such information publicly. And 29 out of the 44 banks did not provide sufficient information on their investment with minority-owned suppliers.
“This report confirms that America’s largest banks must be more transparent so that regulators, Congress and the American people can hold them accountable for real and intentional diversity and inclusion outcomes,” Rep. Joyce Beatty, D-Ohio., the chairwoman of the subcommittee on diversity and inclusion, said at the hearing.
The report recommended legislation to require banks to share their diversity data with their regulators and the public, require banks to track their efforts at increasing the diversity of partner firms, and require banks to publicly disclose the diversity of their boards.
“What we have learned is that discrimination and other kinds of reasons have caused a lack of opportunity for talented people who would like to be in the financial services space,” House Financial Services Committee Chairwoman Maxine Waters, D-Calif., said at the hearing. “We intend to do everything that we can for transparency in all of the industries.”
But as the banking industry says it is making progress in improving diversity, Republicans on the committee said it wouldn’t be appropriate for the government to step in and mandate diversity reporting requirements.
“It’s encouraging to see that large banks and financial institutions, they are really taking this mission more seriously,” said Rep. Ted Budd, R-N.C. “However, I am concerned that we can’t see the forest through the trees here and that we are starting to mandate the private sector of one particular industry to self-report and it may not meaningfully lead to a more diverse and inclusive workforce. … It seems like the financial services industry is making progress without government intervention.”
Industry representatives at the hearing highlighted banks’ efforts to improve diversity.
“The industry has made progress in recent years to diversify its talent pool and leadership to meet the needs of customers from all walks of life,” said Naomi Mercer, senior vice president of diversity, equity and inclusion at the American Bankers Association. “Many banks have robust [diversity, equity and inclusion] programs and have implemented leading practices such as employee resource groups, leadership and formal mentoring programs to advance women, people of color, and other underrepresented groups, and supplier diversity programs.”
But others suggested that banks aren’t sharing their diversity data with the public because they need to make improvements.
“I believe that the banks are challenged by that data because the data doesn’t look good and when it doesn’t look good they are not willing to share their data,” said Subha Barry, president of Working Mother Media.