Chair Beatty Holds Financial Firms’ Feet to Fire on Floyd Pledges
WASHINGTON, D.C.—The House Financial Services Subcommittee on Diversity and Inclusion, chaired by U.S. Congresswoman Joyce Beatty (OH-03), conducted a hearing today entitled, “The Legacy of George Floyd: An Examination of Financial Services Industry Commitments to Economic and Racial Justice.” The Subcommittee’s hearing focused on the extent to which banks, publicly traded companies, executives, and various stakeholders in the financial services industry have made good on their promises to Black communities and businesses, as well as steps these institutions have taken to achieve sustainable racial equity within their organizations.
“Following George Floyd’s murder, Americans of all races were united and took to the streets to demand justice and an end to systemic racism that permeates many of our institutions and corporations,” Beatty said to open the hearing. “The voices of the many resonated in boardrooms and C-Suites as corporate leaders used the moment to empathize with the frustrations of protestors, their employees and even stakeholders. In response, leading financial institutions pledged to serve as allies and apply their power, influence, and resources to support the fight for social justice, and to invest in economic opportunities for Black communities that have been redlined and shut out.” She continued, “Today, I urge my colleagues to join me in calling upon corporations to live up to their commitments and implement sustainable practices that will permanently address the economic inequities that divide our nation.”
The Subcommittee’s hearing comes on the heels of analysis by Creative Investment Research that found that American companies pledged $50 billion, including $33 billion from financial firms, toward racial equity after Floyd’s murder, but to date only $250 million has been spent or committed to a specific initiative.
“While pledges and platitudes that affirm values are important, we stand at a crossroads that demands tangible and transparent action,” Beatty added. “Transparency and accountability must be at the heart of the financial industry’s promises, and I call upon them to fully embrace the spirit of my transformative piece of legislation: the Diversity and Inclusion Data and Accountability Transparency Act.”
Recent research by the Government Accountability Office on diversity performance trends in senior leadership roles, from 2007 to 2015, found that the hiring and promotion of African Americans declined and the rate for women remained unchanged. To address that poor performance, Congress authored Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203). Section 342 requires financial regulators to create diversity standards for their regulated entities, including the collection of diversity data. Yet, an overwhelming majority of entities have declined to participate in the annual diversity self-assessment requests. Similarly, many public companies generally have not shared metrics of diversity performance, leaving shareholders and the general public uninformed about the risks associated with investing in a company.
Beatty’s bill, also known as D&I DATA, would amend Section 342 of Dodd-Frank to mandate regulated entities disclose their diversity data, enhancing transparency, accountability, and creating a more inclusive economy for all Americans.