Federal financial services agencies have yet to reflect the racial and ethnic diversity of the American population in their workforces – this according to a Democratic Financial Services Committee staff report released during a press conference today led by Rep. Maxine Waters (D-CA), Ranking Member of the Financial Services Committee.
Senior Democratic Members in attendance included the Chairs of the Congressional Black Caucus, Rep. G.K. Butterfield (D-NC) and Congressional Asian Pacific American Caucus, Rep. Judy Chu (D-CA), as well as Rep. Norma Torres (D-CA), representing the Congressional Hispanic Caucus, Rep. Al Green (D-TX), Ranking Member of the Financial Services Subcommittee on Oversight and Investigations and Rep. Joyce Beatty (D-OH), one of the primary Democrats monitoring implementation of the diversity provisions in the HERA and the Dodd-Frank Act.
Democratic staff found that minorities and women are underrepresented at the nation’s Federal financial services agencies. According to the staff report, racial and ethnic minorities and women are also very underrepresented in senior-management positions when compared to overall representation within the agencies’ workforces. Moreover, staff found that African-American employees across the agencies generally received lower performance management review scores than white employees.
“I am disappointed to find that, more than five years after the enactment of the Housing and Economic Recovery Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act that included provisions intended to promote workforce and supplier diversity and inclusion, the Federal financial services agencies have largely failed to improve on these critical matters,” said Ranking Member Waters. “As communities of color continue to face an insurmountable wealth gap, and as African-American unemployment remains stagnant at 9.2 percent, our nation cannot afford to have a Federal government that is out of touch with the needs of racial and ethnic minorities and women and their daily financial challenges. As this country’s population is increasingly becoming more racially and ethnically diverse, it is well past time for these agencies to move beyond paying lip service to diversity efforts and instead fully embrace diversity and inclusion policies and practices as vital to achieving their missions by adopting the sensible recommendations included in the staff report.”
“Diversity in the workplace is one of the CBC’s cornerstone issues,” said CBC Chairman G. K. Butterfield. “We have focused on a number of American corporations and government agencies to determine whether they are making a serious effort to increase diversity and invest in underserved communities. As revealed in the Committee on Financial Services staff report, many of these agencies have thus far failed in making a concerted effort to grow the diversity of their workforces. The gross underrepresentation of minorities, women, and African Americans in their workforces and senior management positions is alarming. The CBC encourages each of the agencies audited as part of this committee report to address our concerns expeditiously to ensure diverse representation and equal opportunity for all eligible employees and qualified applications.”
“What this Diversity Report reveals is just what we’ve feared and have already known: people of color and women are underrepresented in our federal government. This is particularly concerning given that the U.S. is expected to become a majority minority nation within our lifetime. Today, Asian Americans and Pacific Islanders, APIs, are the fastest growing racial group in the country, but only account for about 5% of the total federal workforce, and only about 4% of those in SES levels,” continued CAPAC Chair Judy Chu. “It’s clear we are at risk of neglecting an increasingly important segment of our population. We need to level the playing field for minorities and women that have been historically underrepresented and underserved. We need to ensure that our government is providing a pipeline for APIs and other communities of color to enter and advance up the ranks. We need to make sure that all Americans have an equal opportunity to serve our country through federal employment.”
Rep. Norma Torres added, “I thank Ranking Member Waters and the Democratic staff for undertaking this important effort. The agencies examined in this report have a direct impact on the lives of many people in our communities, and employing a diverse workforce will only help them better understand the needs of the people they serve. It is our responsibility as Members of Congress to get to the bottom of the diversity gap and work with our federal agencies to address it.”
“As the Ranking Member of the Financial Services Oversight and Investigations Subcommittee, I was honored to work under the leadership of the Honorable Maxine Waters to advocate for the auditing of workforce diversity within the federal financial regulatory agencies. The findings in the report indicate that there are challenges to achieving success for women and minorities that must be addressed by these regulatory agencies. As a nation, we have witnessed the effects of these challenges, as African-American unemployment remains approximately twice that of the national average. Clearly, it is evident that more proactive remedies to diversity deficiencies are needed within the federal government—the largest employer in the United States,” Ranking Member Al Green said. “I trust that all of the audited federal financial regulatory agencies will move to quickly address the diversity deficiencies highlighted in this report and redouble their efforts to improve the inward and upward inclusion of minorities and women.”
“As Members of Congress we have a responsibility to ensure that the agencies are following the law with respect to non-discriminatory personnel practices. The seven federal agencies with thousands of staff that oversee the financial services industry currently employ 18% Blacks, 7% Hispanics, 6% Asians, and 2% other, while employing 67% whites. I, along with Ranking Member Waters, have pushed for standards to address the diversity and inclusion shortcomings highlighted in this report. We will keep a watchful eye and provide ongoing oversight as these agencies improve their inclusion of minorities and women,” remarked Rep. Joyce Beatty.
The report noted the following:
- Hispanics make up only 2 percent of senior management at the FDIC and, Asians comprise just 6 percent of the same group.
- At the Federal Reserve, Hispanics, African Americans and Asians all received drastically lower performance management review scores than their white counterparts.
- The CFPB’s senior management is 77 percent white, while Hispanics make up 5 percent and Blacks make up 8 percent.
- The OCC and the FDIC had the lowest numbers of women in senior management, at 31 percent and 32 percent, respectively.
- Hispanics made up only 3 percent of FHFA’s general workforce.
- Asians comprised just 5 percent of the National Credit Union Administration’s general workforce.
- And at the SEC – our Wall Street cop on the beat – minorities also faced significant obstacles to advancement, as African Americans, Hispanics, and Asians make up just 12 percent of senior management, combined.
Democratic Committee staff recommended that agencies improve on deficiencies identified in the report by, among other things, formally investigating the root causes of diversity shortcomings, enhancing interactions between agency diversity officers and agency heads, and establishing periodic reviews for Congress on the representation of minorities and women within the workforce.
Read the executive summary here.
Read the full report here.