Mother Jones
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It’s not unusual for the banking industry to challenge a new government rule. Ever since Congress passed the Dodd-Frank Act in 2010, the banks have sent forth their army of lobbyists any time federal regulators try to enforce a new restriction, often resorting to the courts if they don’t get their way. But their latest objection is particularly galling: they don’t want the government or public to know about the diversity—or lack thereof—within their industry.
When Congress went about reforming the banking industry in 2010, Democrats made a specific point to encourage the financial industry to diversify its workforce. It has long needed a fix. The financial trade is controlled by old, rich white dudes, a cohort that doesn’t accurately reflect the country’s shifting demographics. The problem only gets worse when you look higher up the chain of command. Overall management in the financial services industry is 81 percent white as of 2011. African-Americans only account for 2.7 percent of senior-level staff in the financial industry, while women hold just 28.4 percent of upper management jobs.
Dodd-Frank, the Democrats’ bill to reform Wall Street following the crash, included a provision that creates Offices of Minority and Women Inclusion in each branch of the federal regulatory regime, such as the Department of Treasury and the Securities and Exchange Commission. (The provision doesn’t touch sexual orientation.) These new offices are tasked with boosting diversity within their own ranks and analyzing hiring practices of the businesses in their purview. Late last year, regulators from six of these offices wrote a rule, still in the proposal stage, to enforce the second half of that mandate. It’s a modest measure—a simple request that the banks conduct self-assessments based on a few best-practice guidelines, but it was enough to rile up the banks.
Complaint letters sent from the main lobbying arms of the financial industry to regulators show a concerted effort to avoid changing their hiring practices and to dissuade regulators from revealing the lack of diversity in the banking sector. “In an otherwise good-faith effort to utilize the joint standards and meet certain standards or metrics relating to ‘diversity,’” the Chamber of Commerce wrote in its letter, “regulated entities may inadvertently run afoul of federal workplace requirements by, for example, engaging in ‘reverse’ discrimination.” Smaller regional banks shared those concerns. The Missouri Bankers Association likened the agencies’ proposal to a “government mandated affirmative action program.”
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The Financial Industry Doesn’t Want You To Know About Its Lack of Diversity
