[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
HOLDING FINANCIAL REGULATORS
ACCOUNTABLE FOR DIVERSITY
AND INCLUSION: PERSPECTIVES
FROM THE OFFICES OF MINORITY
AND WOMEN INCLUSION
=======================================================================
VIRTUAL HEARING
BEFORE THE
SUBCOMMITTEE ON DIVERSITY
AND INCLUSION
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 8, 2020
__________
Printed for the use of the Committee on Financial Services
Serial No. 116-107
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
__________
U.S. GOVERNMENT PUBLISHING OFFICE
43-500 PDF WASHINGTON : 2022
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California ANN WAGNER, Missouri
GREGORY W. MEEKS, New York FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut SCOTT TIPTON, Colorado
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
DENNY HECK, Washington TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
RASHIDA TLAIB, Michigan DAVID KUSTOFF, Tennessee
KATIE PORTER, California TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts BRYAN STEIL, Wisconsin
BEN McADAMS, Utah LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota
Charla Ouertatani, Staff Director
Subcommittee on Diversity and Inclusion
JOYCE BEATTY, Ohio, Chairwoman
WM. LACY CLAY, Missouri ANN WAGNER, Missouri, Ranking
AL GREEN, Texas Member
JOSH GOTTHEIMER, New Jersey FRANK D. LUCAS, Oklahoma
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida TED BUDD, North Carolina
AYANNA PRESSLEY, Massachusetts DAVID KUSTOFF, Tennessee
TULSI GABBARD, Hawaii TREY HOLLINGSWORTH, Indiana
ALMA ADAMS, North Carolina ANTHONY GONZALEZ, Ohio, Vice
MADELEINE DEAN, Pennsylvania Ranking Member
SYLVIA GARCIA, Texas BRYAN STEIL, Wisconsin
DEAN PHILLIPS, Minnesota LANCE GOODEN, Texas
C O N T E N T S
----------
Page
Hearing held on:
September 8, 2020............................................ 1
Appendix:
September 8, 2020............................................ 51
WITNESSES
Tuesday, September 8, 2020
Clark, Sheila, Director, Office of Minority and Women Inclusion
(OMWI), Board of Governors of the Federal Reserve System (Fed). 6
Cofield, Joyce, Executive Director, Office of Minority and Women
Inclusion (OMWI), Office of the Comptroller of the Currency
(OCC).......................................................... 5
Cole, Lorraine, Director, Office of Minority and Women Inclusion
(OMWI), U.S. Department of the Treasury (Treasury)............. 31
Davy, Monica, Director, Office of Minority and Women Inclusion
(OMWI), National Credit Union Administration (NCUA)............ 11
Dingman, Lacey, Director, Office of Minority and Women Inclusion
(OMWI), Federal Reserve Bank of New York (FRBNY)............... 8
Gibbs, Pamela, Director, Office of Minority and Women Inclusion
(OMWI), U.S. Securities and Exchange Commission (SEC).......... 34
Levine, Sharron, Director, Office of Minority and Women Inclusion
(OMWI), Federal Housing Finance Agency (FHFA).................. 33
McCray, Lora, Director, Office of Minority and Women Inclusion
(OMWI), Consumer Financial Protection Bureau (CFPB)............ 36
Pearson, Nikita, Acting Director, Office of Minority and Women
Inclusion (OMWI), Federal Deposit Insurance Corporation (FDIC). 10
APPENDIX
Prepared statements:
Clark, Sheila................................................ 52
Cofield, Joyce............................................... 58
Cole, Lorraine............................................... 68
Davy, Monica................................................. 75
Dingman, Lacey............................................... 79
Gibbs, Pamela................................................ 93
Levine, Sharron.............................................. 95
McCray, Lora................................................. 100
Pearson, Nikita.............................................. 102
Additional Material Submitted for the Record
Beatty, Hon. Joyce:
``What do the Data Reveal about (the Absence of Black)
Financial Regulators?'', by Chris Brummer, JD, PhD,
Georgetown University Law Center........................... 112
The Greenlining Institute Fact Sheet, ``Offices of Minority
and Women Inclusion: 2019 Snapshot of Financial Regulators'
Diversity and Inclusion, '' dated September 2020........... 133
National Credit Union Administration Diversity and Inclusion
Strategic Plan, 2018-2022.................................. 135
Executive Office of the President, Office of Management and
Budget, Memorandum for the Heads of Executive Departments
and Agencies, ``Training in the Federal Government,'' dated
September 4, 2020.......................................... 151
Cofield, Joyce:
Written responses to questions for the record from Chairwoman
Waters..................................................... 153
Written responses to questions for the record from Chairwoman
Beatty..................................................... 161
Davy, Monica:
Written responses to questions for the record from Chairwoman
Waters..................................................... 163
Written responses to questions for the record from Chairwoman
Beatty..................................................... 179
Dingman, Lacey:
Written responses to questions for the record from Chairwoman
Waters..................................................... 182
Written responses to questions for the record from Chairwoman
Beatty..................................................... 219
Gibbs, Pamela:
Written responses to questions for the record from Chairwoman
Waters..................................................... 222
Written responses to questions for the record from Chairwoman
Beatty..................................................... 233
Levine, Sharron:
Written responses to questions for the record from Chairwoman
Waters..................................................... 256
McCray, Lora:
Written responses to questions for the record from Chairwoman
Waters..................................................... 265
Written responses to questions for the record from Chairwoman
Beatty..................................................... 277
Pearson, Nikita:
Written responses to questions for the record from Chairwoman
Waters..................................................... 281
Written responses to questions for the record from Chairwoman
Beatty..................................................... 297
HOLDING FINANCIAL REGULATORS
ACCOUNTABLE FOR DIVERSITY
AND INCLUSION: PERSPECTIVES
FROM THE OFFICES OF MINORITY
AND WOMEN INCLUSION
----------
Tuesday, September 8, 2020
U.S. House of Representatives,
Subcommittee on Diversity
and Inclusion,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to notice, at 12:14 p.m.,
via Webex, Hon. Joyce Beatty [chairwoman of the subcommittee]
presiding.
Members present: Representatives Beatty, Clay, Green,
Lawson, Adams, Dean, Garcia of Texas, Phillips; Wagner, Lucas,
Kustoff, Gonzalez of Ohio, and Steil.
Ex officio present: Representative Waters.
Also present: Representative Maloney.
Chairwoman Beatty. The Subcommittee on Diversity and
Inclusion will come to order.
Without objection, the Chair is authorized to declare a
recess of the subcommittee at any time. Also, without
objection, members of the full Financial Services Committee who
are not members of this subcommittee are authorized to
participate in today's hearing.
Members are reminded to keep their video function on at all
times, even when they are not being recognized by the Chair.
Members are also reminded that they are responsible for muting
and unmuting themselves, and to mute themselves after they
finish speaking.
Consistent with the regulations accompanying House
Resolution 965, staff will only mute Members and witnesses as
appropriate, when not being recognized by the Chair, to avoid
inadvertent background noise. Members are reminded that all
House rules relating to order and decorum apply to this remote
hearing.
Today's hearing is entitled, ``Holding Financial Regulators
Accountable for Diversity and Inclusion: Perspectives From the
Offices of Minority and Women Inclusion.''
I now recognize myself for 4 minutes to give an opening
statement.
Today's hearing focus is on holding financial regulators
accountable for diversity and inclusion perspectives from the
Offices of Minority and Women Inclusion (OMWIs). Our country is
facing three pandemics: the COVID-19 pandemic; the economic
pandemic; and the fight for social justice pandemic. These
challenges have reshaped our work and our personal
relationships in unprecedented ways.
Today's hearing is totally virtual, and I appreciate all of
our witnesses and Members participating by Webex. I am hopeful
we will be able to strike a balance between OMWI's historical
context, and the demand for greater industry inclusiveness and
transparency, as well as to highlight the accomplishments of
OMWIs performance.
This year, 2020, marks the 10th anniversary of the
enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. Through the leadership of Chairwoman Maxine
Waters, members of the Democratic Caucus, and countless
diversity and inclusion stakeholders, Section 342 of Dodd-Frank
was devised to serve as a catalyst to enhance diversity and
inclusion performance at the financial regulatory agencies and
the entities they regulate.
Prior to the enactment of Dodd-Frank, policymakers and
financial services stakeholders lacked access to performance
data to transparently review diversity practices and policies
of regulated entities. And the financial crisis of 2008
disproportionately impacted low-income Americans and
communities of color.
Congress, recognizing the important role diverse
communities play in the U.S. economy, took action to diversify
the financial services sector to help prevent the abusive and
discriminatory practices that helped caused the crisis from
happening again.
Throughout the 116th Congress, I, along with my colleagues,
was reminded that all diversity and inclusion is a business
imperative, it improves the bottom line, and is essential, and
essential too, for closing the racial wealth gap.
Our diversity and inclusion work has breathed new life into
how financial institutions and the regulatory agencies
evaluate, access, and expand inclusiveness. Dr. Chris Brummer's
recent analysis highlights a persistent lack of racial
diversity in senior roles at the regulatory agencies. Our work
has pointed to systemic racism and the need for us to be
intentional in our inclusiveness, contrary to President Trump's
comments.
Systemic racism is a national crisis that impedes the full
inclusion of diverse communities in our economy. In June,
Federal Reserve Chairman Jerome Powell acknowledged that
structural discrimination exists in the United States economy
today, and impedes the economic success of communities of
color. Chair Powell also highlighted the Fed's requirement that
asset managers and broker-dealers who contract with the Fed in
the pandemic relief effort must meet diversity and inclusion
performance requirements.
Just as we have charged the banks and other financial
institutions to discuss and share data regarding how they have
improved the workplace and supplier diversity policies and
practices, we are eager to hear from you regarding your
agency's performance, because transparency and accountability
are critical to achieving effective and sustainable
performance.
We recognize your limited authority, and have informed each
of the agency directors that it is them that this committee
will be holding first in line for accountabilities on diversity
and inclusion performance.
In closing, we are resolute and determined to see your
agencies and regulated entities achieve both the letter and the
spirit of Dodd-Frank. The success of our economy depends on the
full inclusion of all communities.
The Chair now recognizes the ranking member of the
subcommittee, the gentlewoman from Missouri, and my friend,
Congresswoman Wagner, for 5 minutes.
Mrs. Wagner. Thank you, Madam Chairwoman. It is good to see
you and most of our committee here today. I appreciate your
holding this hearing, and I would like to thank all of the
witnesses for testifying today. We look forward to hearing from
each of you on the work that the Offices of Minority and Women
Inclusion have been doing to successfully diversify the
workforces of our financial regulators.
Over the past year, this subcommittee has held multiple
hearings on the benefits of a diverse workforce. Studies show
that companies with diverse workforces perform better compared
to their less-diverse competitors. Diverse firms prove to be
more innovative than companies with less diversity. It is in a
company's best interest to hire and develop a diverse workforce
and create an inclusive work environment.
Federal agencies, like the private sector, will realize
many benefits from a diverse workforce. Diversity and
inclusion, while related, are separate issues that must be
addressed. Although a company or a Federal agency may be able
to increase recruitment, it is equally as important to focus
efforts on making sure the environment is inclusive for
retention to fully realize the benefits of a diverse workforce.
Studies continue to show that minorities and women tend to
leave financial services firms at a higher rate than their
White male counterparts. To improve the rate of retention,
companies and Federal agencies must adjust their culture and
promote the development of diverse talent. This requires a
pronounced commitment from leadership and a specific action
plan to increase inclusion.
In order to be most effective, company policy changes
should be implemented from the top down and have buy-in at all
levels of management. When I speak of top-down policy changes
being implemented, a prime example is mentioned in Ms.
Cofield's testimony. She meets regularly with Acting
Comptroller Brooks and the agency's executive committee and the
senior management to ensure that the OCC fulfills its
commitment to diversity and inclusion.
It is buy-ins like this, at the senior level, that make a
big difference. Whether it is an OMWI Director meeting
regularly with an agency head and senior staff, or a chief
diversity officer having constant communication with the CEO,
that relationship fosters a strong commitment to successfully
recruit, retain, and promote minorities and women.
The benefits of a diverse workforce are well-established,
and the private sector has developed a set of best practices to
recruit and retain a diverse workforce and prioritize
inclusion. Federal agencies would also benefit from
implementing these strategies.
Some of the best practices we have learned about in
hearings this Congress, that increase retention rates and
improve the inclusivity of a workplace, include providing
financial literacy training, transparency regarding salaries,
promotion opportunities, mentoring and sponsorship programs,
employee resource groups, unconscious bias training, and
flexible work hours for working mothers.
Our goal today should be to identify the successful
strategies for recruiting and retaining minorities and women,
and explore how government agencies can better implement those
strategies within their own structures.
I look forward, Madam Chairwoman, to learning about the
work that all of the OMWIs have been doing today, and I am
proud of this committee for examining these important issues.
Thank you, and I yield back, Madam Chairwoman.
Chairwoman Beatty. Thank you very much, Ranking Member
Wagner. The Chair now recognizes the Chair of the full
Financial Services Committee, the gentlewoman from California,
the author of Dodd-Frank Section 342, Chairwoman Waters.
You are recognized for 5 minutes.
Chairwoman Waters. Thank you very much, Chairwoman Beatty.
Just as we held banks accountable at a February hearing, today
we have assembled the Directors of the Offices of Minority and
Women Inclusion, known as OMWIs, from the financial regulatory
agencies to discuss their progress and challenges in fulfilling
their diversity and inclusion oversight missions.
Ten years ago, I authored the language in the Dodd-Frank
Wall Street Reform and Consumer Protection Act that created the
OMWIs to be champions and watchdogs in our financial services
agencies for diversity and inclusion. On the 10th anniversary
of Dodd-Frank, and with growing protests across the country
calling for an end to systemic racism, this hearing is long
overdue. I want to thank you and Mrs. Wagner for the work that
you have been doing in giving oversight to the OMWIs.
Chairwoman Beatty, ever since you were elected to office,
you have been taking on this responsibility, and I am so
appreciative to you for it.
The financial services regulators play an important role in
removing systemic racial and gender barriers and biases to
ensure that the American economy is inclusive and accessible to
all.
I yield back the balance of my time.
Chairwoman Beatty. Thank you so much, Chairwoman Waters.
Today, we welcome the testimony of nine witnesses divided
into two panels. Our first panel of OMWI Directors will focus
on the banking regulators.
Joyce Cofield is the Executive Director of the Office of
Minority and Women Inclusion of the Office of the Comptroller
of the Currency.
Sheila Clark is the Director of the Office of Minority and
Women Inclusion of the Board of Governors of the Federal
Reserve System.
Lacey Dingman is the Director of the Office of Minority and
Women Inclusion of the Federal Reserve Bank of New York.
Nikita Pearson is the Acting Director of the Office of
Minority and Women Inclusion of the Federal Deposit Insurance
Corporation.
And Monica Davy is the Director of the Office of Minority
and Women Inclusion of the National Credit Union
Administration.
Witnesses are reminded that their oral testimony will be
limited to 5 minutes. A chime will go off at the end of your
time, and I would ask that you respect the Members' and other
witnesses' time by wrapping up your oral testimony. And without
objection, your written statements will be made a part of the
record.
Ms. Cofield, you are now recognized for 5 minutes to give
an oral presentation of your testimony.
STATEMENT OF JOYCE COFIELD, EXECUTIVE DIRECTOR, OFFICE OF
MINORITY AND WOMEN INCLUSION (OMWI), OFFICE OF THE COMPTROLLER
OF THE CURRENCY (OCC)
Ms. Cofield. Chairwoman Beatty, Ranking Member Wagner, and
members of the subcommittee, I am Joyce Cofield, and I serve as
the Executive Director of the Office of Minority and Women
Inclusion at the Office of the Comptroller of the Currency
(OCC). I am pleased to discuss OCC's commitment to diversity
and inclusion within our workplace, our suppliers, and the
Federal banking system.
The OCC's OMWI was established in 2010 pursuant to Section
342 of the Dodd-Frank Act. I have served as the Executive
Director since its inception. Acting Comptroller Brooks, our
executive committee, and I share a commitment for promoting
diversity and inclusion. I meet regularly with the Acting
Comptroller, as I have with previous Comptrollers.
The OCC is dedicated to maintaining a diverse workforce
through a strategy that focuses on leadership commitment,
recruitment strategies that provide a diverse workplace,
building employee competency pipelines with retention
strategies sensitive to employee differences, and a culture
that respects, values, and seeks diversity.
As the subcommittee has explored in previous hearings,
successful diversity and inclusion begins with the tone at the
top. Acting Comptroller Brooks has vigorously championed his
commitment towards improving the impact of OCC's diversity
programs and has engaged the executive committee on how to
improve the diversity of candidates placed for hiring and
promotion decisions.
Additionally, we are excited about a recently-launched
initiative, Project REACh, that convenes leaders from banking,
civil rights, technology, and business organizations to execute
projects that will reduce barriers to full and fair economic
participation and expand access to credit and capital to
minorities and underserved communities.
To ensure that OCC hires and retains diverse management and
staff, OMWI provides each business unit with detailed analyses
of workforce trends twice a year to facilitate the integration
of diversity and inclusion into business unit plans. These
analyses include recruitment and hiring, promotions and
separations, and employee development and retention
information.
To expand the diversity of our applicant pools, the OCC
recruits at more than 200 colleges and universities, including
Hispanic-Serving Institutions HSIs), Historically Black
Colleges and Universities (HBCUs), and institutions with large
female student populations. We also participate in minority
professional organizations and actively support interns.
This summer, we hosted more than 100 minority students from
local high schools for a 6-week paid, virtual leadership
internship. Despite limitations from the coronavirus, the OCC
provided the interns with many positive, enriching experiences.
The OCC provides a variety of education and developmental
opportunities. OMWI supports these efforts by providing focused
diversity and inclusion training, including unconscious bias
courses for both managers and employees, and of course, on
women in leadership.
The agency recently added the Leadership Exploration and
Development (LEAD) Program to build leadership competencies for
aspiring leaders and managers. In the first cadre, completing
this fall, there were 53 percent females, 18 percent Blacks,
and 12 percent Hispanics.
The OCC is also committed to the inclusion of minority- and
women-owned businesses at all levels of our business activity.
I am proud that over the last 10 years, greater than 30 percent
of all OCC procurement contracts have gone to minority- and
women-owned businesses. Working closely with our procurement
colleagues, OMWI staff provide technical assistance, greater
awareness, and facilitate matchmaking with potential
contractors, and finally, OMWI's efforts including collecting
data from the diversity policies and practices of the banks we
supervise.
In 2015, we joined in the publication of a policy for joint
standards. This policy statement provides a framework for banks
to complete self-assessments, and encourages disclosure to the
OCC and to the public to increase awareness of the bank's
commitment to diversity.
To encourage banks to submit self-assessments, we have
collaborated with the other agencies to sponsor outreach
activity. This year, the banks will have until October to
return their 2020 self-assessments.
I thank you for the opportunity to appear before you today,
and I look forward to your questions.
[The prepared statement of Executive Director Cofield can
be found on page 58 of the appendix]
Chairwoman Beatty. Thank you.
Ms. Clark, you are now recognized for 5 minutes to give an
oral presentation on your testimony.
STATEMENT OF SHEILA CLARK, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM (FED)
Ms. Clark. Thank you. Chairwoman Beatty, Ranking Member
Wagner, members of the subcommittee, thank you for the
opportunity to testify today on the important role of the
Office of Minority and Women Inclusion at the Federal Reserve
Board. The Board is deeply committed to an inclusive workplace
and a diverse workforce, as well as to fostering diversity in
our own procurement practices and those at the institutions we
regulate. Diverse perspectives inspire the best ideas, lead to
the best decisions, and advance the Federal Reserve's mission
and service to the public.
The board established its Office of Diversity and Inclusion
(ODI) in January 2011 to promote diversity and inclusion
throughout the Board, the System, and in the financial services
industry. I work closely throughout the Board and the System
with the other OMWI Directors at the 12 Reserve Banks,
recognizing that the commitment of the Board on these important
issues is shared by the banks and their leadership.
ODI administers and directs the Board's equal employment
opportunity compliance policies and programs, which include the
Office of Minority and Women Inclusion (OMWI). The Board's
OMWI, created pursuant to Section 342 of the Dodd-Frank Act,
develops standards, procedures, and initiatives to ensure fair
inclusion of minorities, women, and minority-owned and women-
owned businesses in all activities of the Board, as well as
developing standards for assessing the diversity policies and
practices of regulated entities.
The Board's OMWI submits an annual report to the Congress
outlining its activities, successes, and challenges. I will
highlight key areas of this report.
The Board has made progress in increasing the level of
diversity in senior leadership. In 2019, there were 19
appointments of official staff, of whom five were minority and
six were women. Currently, there are six female Division
Directors, one of whom is African American. Eight Division
Directors are male, one of whom is Hispanic.
In addition, there are three African Americans, one
Hispanic, and three females who serve as Deputy Directors in
their prospective divisions. ODI staff engages with division
leaders to measure progress against the Board's diversity and
inclusion standards, objectives, and actions.
We will continue to address challenges with recruiting
diverse candidates for major job functions such as financial
analysts and economists, and strengthening the pipeline to
senior staff levels. The Federal Reserve System continues to
focus on increasing racial, ethnic, gender, and sectorial
diversity among Reserve Bank and Branch Directors.
These boards function more effectively when they are
constituted in a manner that encourages a variety of diverse
perspectives. In 2020, approximately 75 percent of Class C
Directors, those who are appointed by the Board to represent
the public, and 70 percent of Class B Directors, those elected
by member banks who represent the public, are diverse in terms
of race and ethnicity or gender.
The Board has made significant progress in the inclusion of
minority-owned and women-owned businesses in the Board's
acquisition process. For example, 2019 contracts awarded to
minority- and women-owned businesses increased 9 percent over
2018. This was due in part to outreach engagements that focused
on forging partnerships with minority- and women-owned
businesses and also creating a database of diverse suppliers
and ensuring their capabilities to offer goods and services
that meet the Board's needs.
In addition, with respect to the Board's capital projects,
we align minority- and women-owned businesses with prime
contractors for subcontracting opportunities.
The Board has engaged in a wide range of community outreach
events to increase financial literacy and help students explore
the field of economics. For example, we facilitate financial
literacy activities aimed at minorities and women through the
Board's Federal Reserve Education Outreach Program.
Board staff economists will also participate in the
American Economic Association Summer Program, which will be
hosted by Howard University from 2021 to 2025. Additional
details on the Board's outreach is discussed in our annual
report.
We continue to strongly encourage the institutions we
regulate to provide information on their diversity policy
practices and self-assessments. In the last 2 years, regulated
entities slightly increased their submissions. However, we are
not satisfied with the level of responsiveness from these
entities. We continue to explore ways to facilitate greater
participation, including through engagements with our agency
colleagues and the regulated entities.
We appreciate the subcommittee's interest in our work, and
we look forward to working with you to continue to advance our
shared objectives.
I will be glad to answer any questions.
[The prepared statement of Director Clark can be found on
page 52 of the appendix.]
Chairwoman Beatty. Thank you.
Ms. Dingman, you are now recognized for 5 minutes to give
an oral presentation on your testimony. Thank you.
STATEMENT OF LACEY DINGMAN, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), FEDERAL RESERVE BANK OF NEW YORK
(FRBNY)
Ms. Dingman. Chairwoman Beatty and Ranking Member Wagner, I
am Lacey Dingman, Chief Human Resources Officer and OMWI
Director at the New York Fed. My pronouns are she, her, and
hers. Thank you for holding this hearing that marks a crucial
anniversary of the OMWI provisions in the Dodd-Frank Act, and
thank you for including the Federal Reserve Bank of New York.
Systemic racism exists, persists, and continues to hinder
economic advancement for too many Americans. At the New York
Fed, we believe that economic equality is a critical component
for social justice and an inclusive and strong economy. I am
proud and empowered to be an OMWI Director at an institution
that is dedicated to understanding and finding solutions to the
inequality and inequity in our Federal Reserve district and in
the economy at large.
OMWI represents more than a corner of our organizational
chart. It is instead a commitment to advancing women and
minority communities by all employees that is infused
throughout the culture of inclusion at the New York Fed.
Where do we start? We start with our people, the more than
3,000 exemplary employees of the New York Fed. As of 2019, our
recruitment efforts provided us the opportunity to add 41
percent of new hires who were women, and 50 percent of whom
were minorities. We also recruited a diverse intern class, 58
percent of whom were minorities as well.
We strive for diversity in our board of directors, which,
as of 2019, consisted of 45 percent minorities and 33 percent
females. And our leadership team of executive vice presidents
currently includes 36 percent minorities and 45 percent
females.
We know that the needs of women and minorities are better
served when decision-making includes them at the table, and we
will continue our efforts to exemplify a leadership team that
is representative of the population we serve.
Beyond our talented employee base, we work to increase the
number of women- and minority-owned firms that conduct business
with the New York Fed. We have recently operationalized several
of the facilities established by the Federal Reserve Board to
support the U.S. economy in the wake of the COVID-19 pandemic.
Aided by trade groups like the National Association of
Securities Professionals, we are working to diversify our
business and vendor relationships under these facilities and
also in open-market operations that are unique to the New York
Fed.
I am excited to tell you that later this week, we will be
announcing new counterparty and agent relationships that will
include minority-, women-, and veteran-owned firms.
Finally, we deploy considerable resources at the New York
Fed when it comes to identifying economic inequities suffered
by women and communities of color, and just as important,
identifying opportunities to bridge these gaps.
I am so proud of the work that my research and community
outreach colleagues have brought to bear on the disparate
impact of COVID on minority communities. This work has only
increased in dedication and fervor since the pandemic struck.
We have helped identify and support the Federal Reserve
System's responses to workforce development needs and
challenges during this crisis. And we have convened community
development practitioners across a variety of issues to support
efforts to identify solutions for the most vulnerable
communities.
Reflecting and advancing our commitment to diversity and
inclusion, later this month the Congressional Black Caucus
Foundation will air a segment on equitable, economic recovery,
featuring our New York Fed President, John Williams, Atlanta
Fed President, Raphael Bostic, and your colleagues,
Representatives Alma Adams, Emanuel Cleaver, Gregory Meeks, and
David Scott.
What I have highlighted constitutes just a fraction of the
progress the New York Fed, because of and inspired by the OMWI
provisions in Dodd-Frank, has made in the area of women and
minority inclusion over the past 10 years.
While we can acknowledge our progress, we are not where we
need to be. There is a long way to go. We are steadfast in our
commitment to work for a more equitable economy and society for
all, and we will redouble our efforts in pursuit of this
essential mission.
I am confident and determined that we have been provided
with the impetus and tools to make a difference for those we
serve in the community and to enhance the experience for all
those who work at the New York Fed.
Thank you for the opportunity to meet with you today. I
welcome your questions.
[The prepared statement of Director Dingman can be found on
page 79 of the appendix.]
Chairwoman Beatty. Thank you very much.
Ms. Pearson, you are now recognized for 5 minutes to give
an oral presentation on your testimony.
STATEMENT OF NIKITA PEARSON, ACTING DIRECTOR, OFFICE OF
MINORITY AND WOMEN INCLUSION (OMWI), FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC)
Ms. Pearson. Chairwoman Beatty, Ranking Member Wagner, and
members of the subcommittee, thank you for the opportunity to
testify. My name is Nikita Pearson, and 2 weeks ago, I became
Acting Director of the Office of Minority and Women Inclusion
at the FDIC. Before I discuss the important work of this
office, I would like to explain why this is not just another
job for me.
As a young Black girl growing up in rural Georgia, I often
went with my great aunt and uncle to their night job--cleaning
banks. When I was older, I vividly remember going with my
mother to one of those same banks and watching tears roll down
her face as the loan officer disrespectfully denied her loan
application.
Even as a child, I knew what I was witnessing was wrong.
The same bank that trusted my family with the keys to their
bank would not lend to my mother, or at least deny the loan
with dignity. This is just one experience that came to mind
when FDIC recruiters came to Savannah State University, a
Historically Black University, and spoke to my accounting class
about the mission of the FDIC.
As an FDIC examiner, I would have the opportunity to
influence policies that will help people like my mom. Now, as a
22-year veteran of the agency, with 17 years in the examination
workforce, I understand the progress the FDIC has made on
diversity and inclusion as well as the challenges we still
face.
Upon Chairman McWilliams' arrival in 2018, she made her
values and expectations clear. We will not tolerate
discrimination. We will ensure the banking system we supervise
is safe and inclusive. And we will recruit, retain and advance
a diverse workforce that is a reflection of the communities we
serve.
With these goals in mind, we have implemented several
initiatives to advance diversity and inclusion in our
workforce, our business activities, and the banks we regulate.
While my written statement provides greater detail, there are
several initiatives that we have recently taken that I would
like to highlight.
We have placed special emphasis on our largest group of
employees--commission bank examiners--who make up about 50
percent of our workforce and occupy a significant number of
leadership positions across the agency. To promote diversity at
the FDIC, we must focus on our examiners. Our ability to
attract and retain a diverse examiner workforce is affected by
a number of factors: the amount of travel; our field office
structure; and the impact of low turnover on prospects for
career advancement. I have seen all of these challenges
firsthand.
The FDIC has taken steps to address all of these issues by
reforming our examiner hiring and creating an executive-level
task force to improve diversity and inclusion.
Mandatory examiner training is now more efficient and
incorporates virtual learning. We have targeted recruiting
outreach to Minority-Serving Institutions (MSIs), like HBCUs,
to build a more-diverse pipeline. We are using technology to
cut the amount of time examiners are on the road and away from
their families. We are expanding mentoring and career
development opportunities. We have improved workplace benefits
by adding paid parental leave and a pilot student loan
repayment program.
These initiatives have proven successful. During the
chairman's tenure, approximately 33 percent of our examiner
hires have been minorities, reversing a decades' long trend and
exceeding our current representation rate.
The agency has also increased diversity across management-
level positions, and Chairman McWilliams' senior leadership
team is diverse.
Beyond the workforce, we have also diversified our supply
chain, to provide opportunities for minority- and women-owned
businesses and law firms. In 2019, the FDIC awarded 31 percent
of all new awards to minority- and women-owned businesses, and
we paid nearly $11 million to minority- and women-owned law
firms.
We have also promoted diversity and inclusion across the
financial services industry. We are encouraging FDIC's
supervised banks to report on their diversity, and we have
taken numerous steps to make it easier for banks to file their
annual diversity reports. We are sharing our findings from the
self-assessment on our website, and we have promoted best
practices related to diversity and inclusion.
The FDIC has made good progress in fostering diversity and
inclusion in these and other areas, including support for
Minority Depository Institutions (MDIs) and efforts to promote
financial inclusion. We also know that our work is far from
complete.
Chair McWilliams is deeply committed to these efforts, and
I am honored to serve the FDIC as her OMWI Director at this
critical time in history.
Thank you again for the opportunity to testify. I look
forward to your questions.
[The prepared statement of Acting Director Pearson can be
found on page 102 of the appendix.]
Chairwoman Beatty. Thank you very much.
Ms. Davy, you are now recognized for 5 minutes to give an
oral presentation on your testimony.
STATEMENT OF MONICA DAVY, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), NATIONAL CREDIT UNION ADMINISTRATION
(NCUA)
Ms. Davy. Good afternoon, Chairwoman Beatty, Ranking Member
Wagner, Chairwoman Waters, Ranking Member McHenry, and members
of the subcommittee. Thank you so much for this opportunity. I
am looking forward to sharing with you our efforts to ensure
that NCUA remains an agency where diversity, equity, and
inclusion, often referred to as DEI, are part of who we are and
how we do business.
The Federal Credit Union Act designates the NCUA Chairman
as the spokesperson for the NCUA board and as the agency's
representative in all official relations with other branches of
government. I am here today in my official capacity as the
NCUA's OMWI Director to testify on the agency's policy.
Section 342 of the Dodd-Frank Act has been a catalyst for
growth and change in the diversity, equity, and inclusion space
at the NCUA. We are proud of the progress we have made over the
last decade. However, this work takes long-term dedication and
commitment. The NCUA is fortunate to have a succession of
leaders who are passionate about DEI. Our current Chairman and
board members are not just individually committed to this work
but are collectively strong and unwavering in their support for
these principles.
Each of you have a copy of the 2019 OMWI report to
Congress. Today, I would like to highlight just three key
messages. First, the NCUA is committed to promoting diversity,
equity, and inclusion within the credit union system.
Second, the NCUA is taking concrete steps to improve key
indicators of DEI within the credit union system.
Third, the NCUA believes a diverse workforce and inclusive
work environment and a diverse supply chain make good business
sense, and we are equally committed to all three.
Now, on that first point about our commitment to promoting
DEI within the credit union system, let me highlight just a few
of the things that we have done. Last year, the NCUA hosted its
first annual DEI summit. It was the first event of its kind for
the industry and attracted more than 150 attendees.
The summit's goals were to promote the value of DEI in
credit unions, provide an opportunity for credit unions to
share best practices, and to offer attendees a forum to discuss
solutions to challenges.
Interest in DEI has significantly grown following the
summit. In fact, afterwards, industry leaders came together
with the NCUA to form the credit union DEI collective. This
collective now serves as a resource to the industry on all
things related to DEI.
On my second point, let me highlight some of the concrete
steps we are taking to improve DEI metrics. Following that 2019
summit, we saw a significant increase in voluntary self-
assessments submitted. Although we want those numbers to
improve, we have shown steady increases every year, which is
promising.
To help ensure even greater participation, our Board voted
unanimously in July of this year to explore ways to incentivize
participation. For example, the NCUA is considering the
viability of reducing the operating fees charged to credit
unions that submit their diversity self-assessments. We are
serving credit unions now on that idea, and we hope that
Congress will support the agency in this effort.
My final point is on diversity and inclusion within the
NCUA. Importantly, we are seeing improvements in diversity
within our leadership pipeline. For example, over the past 5
years, racial and ethnic diversity in our management-level
staff, those in Grades 13 through 15, has increased by more
than 5 percentage points. During the same period, racial and
ethnic diversity among our senior staff positions has increased
by almost 12 percentage points. At the end of 2019, 20 percent
of NCUA's workforce belonged to one of our six employee
resource groups, which support our diverse employees and create
a strong sense of belonging within the agency.
It is also worth noting that we are committed to continuous
improvement with respect to supplier diversity. The agency
awarded more than 40 percent of our total contract dollars to
minority- or women-owned businesses for the past 2 years. I
will also note that our awards to minority-owned businesses
have improved by 15.9 percentage points over the last 5 years.
In closing, the NCUA is committed to advancing diversity,
equity, and inclusion within the agency, the credit union
system, and the broader financial services sector.
I look forward to answering any questions you may have for
me. Thank you.
[The prepared statement of Director Davy can be found on
page 75 of the appendix.]
Chairwoman Beatty. Thank you, and thank you to all of our
witnesses. I now recognize myself for 5 minutes for questions.
The first questions will go to Ms. Clark and Ms. Pearson,
and then, Ms. Davy and Ms. Cofield. Ms. Clark and Ms. Pearson,
why do you believe your regulated entities have failed to
submit self-assessments?
Ms. Clark. As we have been really providing an opportunity
for the institutions to do just that, we find that in several
instances at first, institutions were not sure of what
information they needed to submit. But through the years, we
have been able to clarify and work with them on those types of
information that would be very helpful and productive in
addressing issues within the financial services industry.
It has been slow, but we have seen, even this year, that
out of the major financial institutions, more than 50 percent
of them have submitted assessments this year, which have been
significant in addressing some of the areas that we have been
focusing on, like workforce, and the supplier diversity
procurement processes.
Chairwoman Beatty. Okay, thank you. I am going to go to Ms.
Pearson. I have several questions, so I hate to cut people off,
but I really enjoyed your answer.
Ms. Pearson, and then Ms. Davy, and Ms. Cofield, you have
had the highest level of responses to the self-assessment
requests but fell short of the goal. Should these assessment
processes be mandatory for regulated entities?
Ms. Davy, Ms. Cofield, do you want to take that last, and
then we will come back to you, Ms. Pearson? We are on a timer.
Are you with me, Ms. Davy, Ms. Cofield?
Ms. Davy. Hi, thank you so much for the question. The NCUA
would be willing to consider and provide administrative
assistance to Congress if they, in fact, make the self-
assessments mandatory. Right now, our agency has taken the
position, our general counsel's office, that they are not
mandatory.
Chairwoman Beatty. Okay. Does anyone else want to comment
on that?
Okay. Let me go to the next question. Business diversity is
a top priority for me. Ms. Dingman, can you briefly provide an
update on your business diversity efforts?
Ms. Dingman. Yes. Thank you for that question, Chairwoman
Beatty. We have been working extensively to build more
relationships with the minority-, women-, and veteran-owned
businesses community, especially within the Second District.
As I mentioned in my oral statement, one of the things that
we are most proud of is the recent work that we have done with
the National Association of Securities Professionals, and later
this week, we will be announcing additional counterparty
relationships, as well as vendor relationships with minority-,
women-, and veteran-owned businesses. This is an ongoing effort
and one that we have to continue to go after because we realize
how important it is as a business imperative.
Chairwoman Beatty. Thank you.
To all of the witnesses, are you familiar with the letter
that came from the OMB Director, Russell Vought, where he made
reference to this letter? And I don't know if you can see it,
but I would like to enter it into the record.
And without objection, it is so ordered.
Do you believe in any way, through any of your training for
diversity and inclusion that you have stated, or believe, that
all White people contribute to racism or benefit from racism as
he has said in this letter, where they are asking for us to
stop all training? That can be a yes or a no, and we will just
go right down the panel.
Ms. Clark, Ms. Pearson, Ms. Davy, you know who you are. It
is yes or no, please.
Ms. Cofield. This is Joyce Cofield. We absolutely do not
have training that in any way contributes to divisive language
like that.
Chairwoman Beatty. Thank you, Ms. Cofield. Ms. Pearson, Ms.
Davy, Ms. Cofield--we heard from Joyce Cofield. I assume you do
it.
Ms. Clark. This is Ms. Clark. I would say at the Federal
Reserve, we in no way have any training that precludes that all
White people are--
Chairwoman Beatty. Thank you.
Ms. Dingman?
Ms. Dingman. At the Federal Reserve Board, no, we do not
have divisive language in our training.
Chairwoman Beatty. Okay. Anyone else, yes or no?
Ms. Pearson. This is Nikita Pearson with the FDIC. Our
training does not include that. Our purpose in our training is
to educate, and not to alienate anyone.
Chairwoman Beatty. Thank you so much. My time is up, and I
yield back. I will now go to our ranking member, Congresswoman
Wagner, for 5 minutes of questions.
Mrs. Wagner. Thank you, Madam Chairwoman.
Ms. Cofield, you have served as Executive Director of the
OCC's OMWI since the office was established in 2010. I would
love to hear from you what have been the most significant
challenges that you and your office have faced with respect to
recruiting and retaining women and minorities?
Ms. Cofield. Thank you. Similar to the FDIC statements
earlier, examiners are our largest population at OCC, and
maintaining a firm pipeline of diverse candidates and diverse
employees within our examiner ranks is our biggest challenge.
From the standpoint of examination, it really is a very
long training time period, and, I think, distracting to new
people as they think about a career. So, we spend a lot of time
in terms of marketing the examiner role at the OCC and the
kinds of work that gets involved in it. But it becomes
difficult, I think, based on travel and based on the amount of
time that needs to be invested into doing their job, that
others can see themselves in that role.
In addition, the training time period is very long. It
takes 5 years at the OCC to get to commissionship. So, you have
to really build an incentive around what is possible in this
career, and that has been our most challenging--
Mrs. Wagner. And let me just ask you--wow, 5 years--how do
you address those challenges, and are there any new challenges
that you are facing right now?
Ms. Cofield. We have been trying to pay attention to this a
lot over the years. One of the areas that helps us a lot is our
employee network group that offers up opportunities for their
constituents to not only get support relative to being
knowledgeable of where opportunities exist in both promotions
and new job opportunities, but basic developmental
opportunities within the organization as well.
But the active support structures relative to mentoring and
coaching each other and keeping each other informed in terms of
activities in the agency that would be important to them in
their careers. They do mock interviews, for example, with each
other, to support each other.
Mrs. Wagner. Let me ask you this. Ms. Cofield, I know that
in July, Acting Comptroller Brooks announced Project REACh with
the goal of expanding financial access by reducing the number
of people excluded from the mainstream banking system due to
their credit score. Access to America's Main Street banking
system is very, very important to me, with millions of
Americans still unbanked and underbanked. How will Project
REACh specifically help them?
Ms. Cofield. We are focusing on convening players here
relative to the banking world, leadership relative to civil
rights, and our community activist groups, technology
organizations, businesses sort of generally, in terms of
looking at and trying to identify the barriers that get in
play, relative to fair, full participation in our economy. And
again, the major piece here is focusing around resolution. It
is looking at 3 months' to 6 months' of activity that can be
organized to make a difference relative to that process. So
again, the main issue is, it is not philanthropic; it is really
resolution-oriented.
Mrs. Wagner. Thank you.
And Ms. Dingman, in your testimony you mentioned the New
York Fed's ten resource networks. Are these similar to an
employee resource group, and could you explain the differences
in these ten resource networks and how they are proving to be
effective at increasing the rate of retention for women and
minorities within the New York Fed, please?
Ms. Dingman. Thank you so much for that question,
Representative Wagner. The employee research networks are, yes,
very much the same as what you would expect in the Federal
space. We have ten of them, as you highlight. They have been
active so much so that we have 1,500 employees who participate.
That is over half of our organization.
They help bring about a variety of programs, and last year
alone, we had over 50 programs that helped with building
inclusion within the organization and also spotlighted a series
of issues that were affecting those particular communities. So,
we see them as integral to our business.
Mrs. Wagner. That is terrific. I have to tell you that I
think these ten resource networks are something that we are
seeing both in the private and certainly in our Federal
financial regulator system, and it is something that is very
positive.
I have run out of time, and I thank you all again for your
interest and testimony today.
Madam Chairwoman, I yield back.
Chairwoman Beatty. Thank you, Madam Ranking Member. The
Chair now recognizes the distinguished Chair of the full
Financial Services Committee, the gentlewoman from California,
Chairwoman Maxine Waters.
Chairwoman Waters. Thank you very much, Chairwoman Beatty.
I would like to direct my first question to Ms. Pearson,
with the FDIC. When you give us the stats on your improvement,
for example in the hiring of minorities and women, I would like
to know, can you break that down to tell us how many African
Americans, how many Asians, how many Latinx? Do you break that
down, and could you tell us that if we sought that information
from you?
Ms. Pearson. The short answer is, yes, we do break that
down, and we can get that information. I do not have all of the
details here with me as far as the new hiring. I do have that
33 percent have been minorities. And if you look at our total
workforce today, 30 percent of our workforce are minorities,
and that is about a--we have increased that representation
rate--
Chairwoman Waters. Excuse me. I am interested in knowing
exactly how many African Americans, how many Asians, all of
those in the protected classes. I would like a breakdown. Do
you have that information?
Ms. Pearson. I have some of that here with me, and I would
be happy to get the rest to you. Our workforceis 17 percent
Black, 4 percent Latinx, and 45 percent women, and some of the
other groups--I would be happy to make sure that we get that
information to you, Chairwoman.
Chairwoman Waters. Thank you. And when you speak about
women, do you have a breakdown of the protected classes among
that group--women?
Ms. Pearson. I do not have that with me, but I will be
happy to make sure we get that to you.
Chairwoman Waters. Thank you very much.
I want to ask you about another aspect of OMWIs. I am very
appreciative for the information on hiring, but I haven't heard
a lot of information about contracting. Perhaps, I will go to
the Fed.
Ms. Clark, can you give me an example of the kind of
contracts that have gone to minorities and women?
Ms. Clark. Thank you, Chairwoman Waters.
Various contracts have gone to minority- and women-owned
businesses. Right now, the majority of our contracts are in
capital projects, and so we have done a robust outreach to
encourage minority-owned businesses particularly to have
meetings and connect with prime contractors around the capital
projects that we currently have.
We have major contracts on the professional side of
services that we are acquiring, and in that regard, most of the
contractors are minority- and women-owned businesses--
Chairwoman Waters. I would like to get a breakdown and
identification of the kinds of contracts that you have been
able to assist at the Fed. I just have no idea whether, again,
you are referring to your capital possibilities or contracts
there, but I would like to know all of the areas in which you
have minorities who are getting contracts. And you can get that
information to us later on.
Ms. Clark. I would be happy to provide that.
Chairwoman Waters. Has my time expired? No? Okay.
Chairwoman Beatty. You are good, Madam Chairwoman.
Chairwoman Waters. Okay, thank you.
Back to the FDIC, I have always been concerned about what
happens with small banks in particular. It seems to me that
there have been increasingly, over the years, a number of small
banks that have failed, and they have been taken over by the
FDIC. Have any of those banks been acquired by minorities at
the FDIC? Ms. Pearson?
Ms. Pearson. I do not have the breakdown of the specific
acquisition information, but what I can tell you is that if
there is a small institution, particularly if it is a Minority
Depository Institution, that we first, based on our policy
statement, seek to find bidders who are also Minority
Depository Institutions before we open it up to the bigger
process.
Chairwoman Waters. Have you been successful in any
acquisitions by minorities of failed banks, when you are
putting them back on the market?
Ms. Pearson. Yes, we have been successful, and I will be
happy to get you the details if you would like them.
Chairwoman Waters. Thank you very much. I would appreciate
that.
And if I still have time, to Ms. Cofield, at the
Comptroller of the Currency, can you give me some information
about contracting? What kind of contracts have you been able to
assist minorities with?
Ms. Cofield. Across-the-board generally, but very high
relative to IT, relative--60 percent of our contracting
business is in the IT arena, and we have been very successful
with minority contractors in the NACE code.
Chairwoman Waters. Thank you very much, and I would like to
get that information from you to help understand exactly what
businesses have been successful, and what we can do to do
outreach to other businesses who perhaps would be eligible for
other kinds of contracts, who may not be responding to requests
for proposal in any way.
With that, I yield back the balance of my time, Madam
Chairwoman. Thank you very much.
Chairwoman Beatty. Thank you very much.
The Chair now recognizes the distinguished gentleman from
Oklahoma, Congressman Lucas, for 5 minutes.
Mr. Lucas. Thank you, Madam Chairwoman, for holding this
hearing today on how we can achieve a more diverse workforce in
the banking and financial services sector.
One of the big challenges, if not the most major challenge,
in the financial services industry is finding diverse,
qualified applicants. So, I would like to put this question to
the entire panel: What financial literacy and education
initiatives are your respective organizations involved in to
illustrate to students the potential careers in the financial
sector so that they can prepare themselves for the
opportunities that exist?
Ms. Cofield. This is Joyce Cofield at the OCC.
It became very clear that preparing students even at the
college level was difficult in terms of starting to advance
financial literacy information. So, 2 years ago, we began an
internship program in our local high schools here in the City
of Washington. That program is in the second year. This year,
we had 100 students who participated in that, and part of that
experience is specifically oriented around financial literacy.
Mr. Lucas. Anyone else?
Ms. Clark. This is Sheila Clark from the Federal Reserve
Board.
We have several programs that are devoted to encouraging
and educating and providing information on the kind of jobs
that we have had. We work very closely with a lot of the HBCUs
and the HSIs. We also participate in an initiative that was
started in Chicago, which is called the Pipeline Initiative,
which is done with major banking and financial services
companies, to basically establish relationships through
mentoring and coaching for college students who are interested
in finance and bringing them into the organizations to do
rotation assignments, and to also do some internships. And we
monitor that very closely and we stay engaged with those
students.
We participate in the American Economics Association summer
program, which I mentioned previously, in order to not only
encourage students to stay in the economic field, but also to
provide them support in advancing their education.
Ms. Davy. This is Monica Davy with the National Credit
Union Administration.
Like the other agencies have mentioned, we have three
different types of intern programs. One is the high school
program that we participated in with OCC this year. We also
have a Pathways Intern Program, as well as a Contract Intern
Program that focuses on bringing minorities into the agency.
With all of those interns who come in, we make sure that we
provide financial inclusion as part of their education.
We also have on our website, My Credit Union. It provides a
ton of financial inclusion education geared specifically to
children.
Also, we participate with the African American Credit Union
Coalition at their conference every year, where they actually
have a financial inclusion fair where students are brought
through, given jobs, given a budget, and they actually learn
how to spend money on different things like paying bills.
Thank you.
Ms. Dingman. Representative Lucas, this is Lacey Dingman
from the Federal Reserve Bank of New York.
In addition to the internship programs that many of my
colleagues have mentioned, we also have a robust financial
literacy program that our communications and outreach team
does. And last year, we reached thousands of students, as well
as educators, through our economic pedagogy program, as well as
through our comic book series. And we find financial literacy
is very important to the Second District here in New York.
Ms. Pearson. Congressman Lucas, I want to thank you very
much for tying those two together, recruitment and financial
literacy. I remember when I started at Savannah State
University, walking down the commons area, and the first thing
I saw was a bunch of different credit card companies trying to
reel me in. So, when our recruiters go to the different
universities, the one thing we do in a purposeful and
intentional effort is we don't just tell them about the jobs we
have, we talk about our services. We have resume writing. We
talk about financial literacy. And we really make sure that we
prepare--we do mock interviews--we prepare the students so they
can be successful when they compete.
Mr. Lucas. The reason I bring that up is, of course, as we
create opportunities for people to live up to their potential,
they have to know that those opportunities exist, and that is
why these programs are so critical.
And with that, Madam Chairwoman, my time has expired, and I
yield back.
Chairwoman Beatty. Thank you very much.
Now, it is my honor to go to the distinguished gentleman
from Missouri, Congressman Clay.
Mr. Clay. Thank you so much, Madam Chairwoman. Let me also
thank you and my friend and neighbor, Ranking Member Wagner,
for conducting this hearing today. I think it is so important
that we examine this subject.
Dr. Chris Brummer's recent report entitled, ``What do the
data reveal about (the absence of Black) financial
regulators,'' found a critical lack of Black people among
appointees and senior policy staff at the financial regulatory
agencies. According to the analysis, only 10 of 375--79
appointees have been Black. Only 5 of 120 total senior policy
staff positions are currently held by African Americans at the
agency.
The report concluded that when Black people are excluded
from these higher posts in the financial regulatory agency, our
Black voices are muted and do not have a say in the outcomes
that affect their ability to be fully included in the economy.
These two questions are to all of the panelists. With a
lack of diversity in these senior levels, what else do OMWIs do
to ensure that minority communities are not overlooked when
their agencies consider new rules and regulations? And what
measures do your offices take to review diversity within
promoting and hiring senior staff?
So, two questions. What else do you all do, and then, how
do you all impact hiring and the promoting of senior staff?
We can start with Ms. Davy, and go down the line.
Ms. Davy. Sure. Thank you so much for that question. Let me
first say that we are proud at the NCUA to have Chairman Hood,
who is the first African-American head of a banking regulatory
agency. And he is extremely committed to making sure that we
examine our processes, our policies, and our systems to remove
any barriers that exist for African Americans to proceed
through the career pipeline.
We are extremely committed to making sure that we have
mentoring. Any employee at NCUA who asks for a mentor, no
matter what their grade is, we make sure that employee has a
mentor.
We are looking at our examiner series, because, again, 67
percent of our workforce are examiners. So if African Americans
or any other minority group or women are not proceeding through
that career pipeline, then we are not going to achieve the
diversity results that we want.
Within the past 2 years, we have worked with the Office of
Personnel Management (OPM) to really look at our examiner
series and look at how employees are able to process through.
We have looked at the exam that examiners have to take to go
from grade 11 to grade 12, to make sure that if there are any
barriers there that are not completely visible to us, that we
remove them and address them. And I am proud of that work that
we have done. We are also just making sure--
Mr. Clay. Okay. Ms. Davy, let thank you now, so I can get
to the rest of the panelists.
Ms. Davy. Thank you.
Mr. Clay. Thank you.
Ms. Pearson, how do we overcome the challenges of hiring
and promoting?
Ms. Pearson. At the FDIC, we first engaged a hiring
manager, and we have frank conversations about what the needs
are, and then OMWI, along with our HR office--we also partner
with how we advertise. When we go out for recruiting events, we
don't just talk about marketing entry level positions; we also
now talk about our higher-level positions that will be
available.
In addition to that, we are in the process of editing our
merit promotion process, and so with that policy, OMWI is
involved in looking in that--with that policy to make sure we
don't put any unintended barriers into place.
We also have some new corporate-wide succession planning
that we are working on. We have a new leadership development
program where we identify our higher-performing people to pull
them into that program. We also have a special assistant
program where individuals who may not have had an opportunity
to work with chairman office level folks, that they have that
exposure and that awareness.
And then, we are also taking the time to look at our
processes, evaluate them, and identify and eliminate any
barriers that we have, and that way we can make sure that our
senior leadership team is diverse and inclusive and represents
the communities that we serve.
Mr. Clay. Thank you, Ms. Pearson.
Ms. Dingman, can you weigh in on the question?
Ms. Dingman. Like my colleagues, we also have very similar
processes in place. We also utilize seven different search
firms through our diversity outreach efforts, and many of them
are minority-, and women-, and veteran-owned businesses.
In addition, we also ensure that, through our recruitment
efforts, we make sure that throughout each part of the process
we remove as much unconscious bias as possible through a
rigorous set of processes and programs that we have. And,
overall, I feel like we are very much doing our part to try and
raise the awareness so that hiring managers are thinking about
diverse candidates throughout the entire process.
Mr. Clay. Thank you for your response.
Chairwoman Beatty. Thank you. The gentleman's time is up.
Mr. Clay. My time is up. Thank you, Madam Chairwoman.
Chairwoman Beatty. Thank you.
The Chair now recognizes the distinguished gentleman from
Ohio, Congressman Gonzalez, for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Chairwoman Beatty. It's
good to see you, as always. And thank you everybody for being
here today for this important hearing.
Ms. Pearson, I want to start with you for a couple of
questions. I was struck by your personal stories.
A little bit of background on me, before I did this job, I
was a professional football player in a prior life, and you
sort of described growing up poor in the South, as a Black
woman, and how difficult that journey can be. But you talk
about how your work experience has really helped you sort of,
not just professionally, but in terms of sort of overcoming
many of these barriers.
When you described that, it resonates with me, because you
sort of describe a lot of my teammates. Now, they were men, but
similar, growing up poor, Black, and in the South.
My question is--and maybe this is beyond the scope of this
committee even, but how do we get more people to travel the
distance that you did, the professional distance to go from
very difficult circumstances to where we can overcome barriers
and really just power through some of these incredibly
difficult obstacles that we have in our society today? I would
love to just hear your perspective on that.
Ms. Pearson. Thank you. The first thing is to be purposeful
and intentional. There are more Nikitas out there in the world,
probably a lot better than I am, so, be purposeful and
intentioned. Go to Historically Black Colleges. Go to other
Minority-Serving Institutions and recruit them and let them be
prepared to be successful.
Once you get these individuals on board, like myself, make
us feel included. And, when I say make us feel included, that
we have opportunities, that we have opportunities to engage, as
far as like with employee resource groups, no matter where you
are particularly located.
At the FDIC, I have been in our mentoring program. I was in
our Executive Potential Program. The FDIC paid for graduate
school for banking. I went to Harvard for the senior managers
of governors. So really, having that career development, I had
both formal and informal mentors at the FDIC.
And then there were a number of different career paths for
where I wanted to go. So not only was there recruitment where--
my recruiters who recruited me from Savannah State didn't just
stop once I came on board. They called me regularly. They
checked in on me to see how I was doing. When I got on the job,
I had a coach assigned to me who helped me with my
commissioning process. I had career development opportunities.
And then, they gave me the opportunity to do the work that I am
doing now.
I go back to Savannah State University when I can to do
recruiting and to identify others and share my different
perspective that may be valuable in saying, this may look like
that to you, but that is a rising star right there, and I can
see it because I was that person.
Mr. Gonzalez of Ohio. That is really powerful. Thank you
for sharing that.
One of the issues we encountered throughout the pandemic,
and continue to encounter is getting capital into the hands of
small businesses, in particular, minority-owned small
businesses.
Can you just share your perspective on how minority-owned
businesses were able to access capital from financial
institutions, and, also, what we could have done better? I am
just trying to understand. We made some progress, but what did
the stars do, and how can we sort of pass those learnings on to
the rest of the financial community?
Ms. Pearson. Congressman, I just want to make sure that I
understand your question. Your question is focused on getting
capital into the hands of small businesses, minority-owned
businesses?
Mr. Gonzalez of Ohio. Yes. Minority-owned small businesses,
yes, ma'am.
Ms. Pearson. Yes. Okay. One of the first things is
developing a relationship, going in, getting to know your
bank--at the FDIC, we not only have a Community Bank Advisory
Committee, we established a Minority Depository Institution
Subcommittee.
And the reason that I bring that up is because Minority
Depository Institutions serve their communities, not just with
the big loans, but they are probably the biggest lender, or one
of the big lenders for small business loans and minority-owned
communities. They know their communities.
And so, our support has been: How can we work more closely
with institutions like Minority Depository Institutions to help
serve their communities?
Mr. Gonzalez of Ohio. Great. And I see I only have 20
seconds left, so I will yield back. But thank you, Madam
Chairwoman, and thank you, Ms. Pearson, for your responses.
Chairwoman Beatty. Thank you very much.
The Chair now recognizes the distinguished gentleman from
Texas, Congressman Green, who is also the Chair of our
Oversight and Investigations Subcommittee.
Mr. Green. Chairwoman Beatty, thank you for hosting the
hearing today, and I thank the ranking member as well. And I
especially want to thank Chairwoman Waters of the Full
Committee. And I do this because, without question,
reservation, hesitation, I have to say this hearing is long
overdue, but it is timely.
It is timely in the sense that on September 5th, I have
intelligence indicating that President Trump has banned
diversity training, and he seems to be calling it anti-
American. He seems to be saying that such training only fosters
resentment in the workplace.
This is pretty strong language, given that we know the role
of the OMWIs is to create forums where employees can have
honest, candid, courageous, and safe conversations about the
impacts of invidious discrimination in their personal and their
work experiences.
This causes me a good deal of concern, so let me just ask
you, Ms. Pearson, to quickly tell me, do you provide such
training at your agency? And can you just give me some
indication as to what the benefits of this training are as it
relates to your staff?
Ms. Pearson. We do provide training on diversity and
inclusion, and like I said earlier, our purpose in our training
is to educate and not to alienate. We have to meet people where
they are. People bring different views and perspectives, and
when we meet together where we are, then we move forward, and
we move forward together. That means that sometimes the
conversations are a little uncomfortable, but we learn and we
grow and we move forward.
And the feedback that we have received from employees is
that they appreciate the training that we have. They appreciate
the opportunity to share their stories. Other folks appreciate
the opportunity to hear different perspectives, and we all feel
that this is a good thing for us.
Mr. Green. Now, let me just quickly talk to all of the
members of the panel, because, ordinarily, I would simply have
you raise your hands, but given the environment we are in, let
me ask you, Ms. Cofield, quickly, do you believe that this is
the American thing to do, that this kind of training is
appropriate for your workplace? And can you give me a simple
yes or no?
Ms. Cofield. I think it is quite appropriate, yes.
Mr. Green. Okay. Ms. Clark?
Ms. Clark. Yes. I also feel that it is quite appropriate.
Mr. Green. Ms. Dingman?
Ms. Dingman. Yes. I agree as well.
Mr. Green. Ms. Davy?
Ms. Davy. Yes. I agree as well.
Mr. Green. Okay. I also would want to call this to the
attention of my colleagues.
This is evidence of why we need H.R. 8160, the bill that is
styled, ``Promoting Diversity and Inclusion in Banking.'' This
is important because we have evidence now that a President will
do what he can to thwart the efforts of the OMWIs, something
that has been the law for many years now. Dodd-Frank brought it
into being under the leadership of the Honorable Maxine Waters.
This kind of effort to thwart what we are trying to do,
which is Constitutional, which is American, should not be
allowed, and this bill would actually require the regulators to
examine financial diversity and inclusion.
I am actually saddened by what the President has done, but
it is evidence of what must be done. So, I am going to beg my
colleagues to please examine this bill, H.R. 8160, because,
clearly, if we don't have this enacted into law, this notion
that we can at least do what the Constitution says we should do
by virtue of many sections of it--I won't go into them right
now--but that is to try to become an America where everybody is
treated equally--equality under the law. I am very much
disturbed by what the President has done.
Now, let me ask one additional question. I have, in the
past, talked about how some 70 percent of the executive level
senior positions at certain banks are held by men, some 70
percent, which means that obviously, about 30 percent of the
positions are held by women. In a country where more than 50
percent of the people are women, it just seems to me that this
is further evidence of the need for the OMWIs.
Let me just ask each of you again to tell me quickly, with
the few seconds that I have left, about your belief in terms of
what women bring to the workplace. Do women bring value to the
workplace such that we ought to have them give us their
opinions by way of being a part of the workforce?
Ms. Cofield?
Ms. Cofield. Yes.
Mr. Green. Ms. Clark?
Ms. Clark. Most definitely.
Mr. Green. Ms. Dingman?
Ms. Dingman. Definitely.
Mr. Green. Ms. Pearson?
Ms. Pearson. Absolutely.
Mr. Green. Ms. Davy?
Ms. Davy. Yes.
Mr. Green. Thank you. I yield back.
Chairwoman Beatty. Thank you, Congressman Green.
The Chair now recognizes the distinguished gentleman from
Wisconsin, Congressman Steil.
Mr. Steil. Thank you very much, Madam Chairwoman. I
appreciate you holding today's hearing, and I appreciate all of
our panelists for being on to discuss what is a really
important topic, how do we create a more perfect union and get
the inclusion and make sure that everyone has a seat at the
table.
I had the opportunity to read some of the written
testimony, and I wanted to ask you, Ms. Pearson, in particular,
we hear a lot about the difficulty on the recruiting side of
getting underrepresented minorities at the table, and I wanted
to just dive in with you on some of the things that your
organization is doing, in particular as it relates to the
mentorship side of this.
We talk a lot about the need to make sure underrepresented
minorities, women, have that network that they can rely on to
able to get that seat at the table, and what have you been
doing in particular as it relates to the internal process of
the mentorship program of some of these groups?
Ms. Pearson. Yes. Thank you for that question. At the FDIC,
we have a variety of different ways, both formal and informal,
for those mentoring opportunities, so I will first start with
the informal.
I talked about how my recruiter who recruited me out of
college still served as an informal mentor, calling me,
checking in on me, and making sure I was progressing.
On the formal side, the FDIC also has a variety of
different ways. If you are a staff level employee, you can be
involved in our mentoring program, where you are assigned to a
more senior leader, and you develop a leadership plan.
In addition to that, we also have a specific plan for
leaders. We have our leadership mentoring plan where our
managers can be partnered with more senior managers for their
development. If you have an interest in becoming a leader, we
also have a program for emerging leaders, where you can receive
coaching.
In addition to that, we are now focused on some of our more
senior leadership opportunities, where we can take individuals
that we identify who are high-performing and partner them with
specific assignments and higher levels that they may not
normally get an opportunity to be exposed to, because that
awareness, having representation, all of those things help
contribute to the success factors, and it did for me.
Mr. Steil. Thank you very much, Ms. Pearson.
In the limited time I have here, I am going to ask Ms.
Cofield and Ms. Clark, in that order, we have heard a lot about
some of the, what I will call a little bit, 50,000 feet,
discussing some of the strategies. I would love for each of
you, if you can, just to take a moment to talk about a specific
story where this has been impactful.
I think sometimes when we personalize this and we talk
about this as an individual, it helps some of us on the
committee and those watching better understand the work that is
being done. So if you have a story on that, Ms. Cofield, I
would love to hear how that has played out in a practical way
for an individual who has benefited by some of the strategies
that you have employed at the OCC.
Ms. Cofield. Okay. I can think of many cases, but we
particularly, in the last year-and-a-half actually dived down
into our Hispanic barrier analysis, because what we were seeing
was a low participation rate of Hispanics in our organization.
Even though we were hiring at the civilian labor force,
what we noticed was that they did not stay on board. They did
not stay with us from a retention standpoint, and so we have
done what we called an Hispanic barrier analysis. And out of
that, we had an opportunity to gain information through focus
group activities.
And what we learned is, there is so much involved in terms
of what the employee experience is like. So not only were we
able to get the numbers and get looking at the movement from
one job to another, promotion opportunities, but we actually
got to hear the stories from Hispanics themselves in terms of
how life at the OCC and the kinds of things that were
supportive to them and the kinds of things that actually ended
up being barriers to them.
Mr. Steil. Thank you very much.
Ms. Cofield. So, that is what we decided to do.
Mr. Steil. Thank you very much. With my limited time, I am
going to try to jump to Ms. Clark. If you have a story where
you can kind of personify this, that would be terrific, I
think, for all of us.
Ms. Clark. Thank you very much.
I will use myself. I have been working since I was 16-
years-old, so, there are a couple of decades in there that I
have been playing business. I came to the Federal Reserve Board
from the private sector, and I immediately received a mentor,
who basically helped guide me through the culture of the
organization, which I think is critical, and also enabled me to
have an opportunity to understand what it was I needed to do as
an individual to be successful within the organization.
And having had that experience, I am more than willing to
support anyone who has an interest, and also provide them with
resources to achieve their goal. And the Board continues to do
that today.
Mr. Steil. Thank you. Thank you very much, Ms. Clark.
Looking at the time, I will yield back. Thank you very
much.
Chairwoman Beatty. Thank you.
The Chair now recognizes the distinguished gentleman from
Florida, Congressman Lawson, for 5 minutes.
Mr. Lawson. Thank you, Chairwoman Beatty and Ranking Member
Wagner, for hosting this hearing today.
We are now on the 10th anniversary of Dodd-Frank, and one
of the things that was found across the financial regulatory
agencies was that African-American employees generally received
lower performance management review scores than White
employees. And this is to all of the panelists. Since this has
been very prevalent and we are very well aware of it, what
policies and practices--and I heard you all talk about mentors
and so forth that have been implemented to relieve some of the
barriers and problems in your performance review process that
may have caused those performance rating disparities. To what
extent has your agency corrected those rating disparities since
the committee review in 2015?
I can just go down the line, and maybe you all can let me
know exactly, one after the other. I'll start with you, Ms.
Clark.
Ms. Clark. Thank you, Congressman Lawson. One of the things
that the Federal Reserve Board has done is, on an annual basis,
we review all of our performance ratings. I am involved in that
process. We look to see if there are any outliers in the way in
which people are being evaluated based on the criteria that we
have established around the competencies and the performance
that is needed.
Once we review those performance ratings, we have
discussions about where there are issues. We have discussions
with the divisions at which those issues persisted, and we work
to find out exactly what is being done to make sure that
everyone is treated on an equal plane and that the evaluations
are done fairly and equitably, and we do this annually. We
identify barriers to success. And then, we also are engaged in
making sure that people understand what the level of
expectations are and that discrimination or any allegation that
is prohibitive to one advancing themselves within the
organization is removed.
Mr. Lawson. Okay. Next?
Ms. Davy. This is Monica Davy from NCUA. Thank you so much.
One of the things we do, besides reviewing our performance
evaluations to make sure that there is consistency, is we also
make sure that, in our mentoring program--we call it mentoring
across differences. We try to make sure that when people get
mentors, they get someone outside of their group, to make sure
that people have exposure to other people. That is one of the
really good ways that you can break down unconscious biases. We
make sure that our employee resource groups--that their
executive sponsors are people who are not part of those groups.
We do very focused training on unconscious bias, because we
know that unconscious bias can come into play when doing
performance evaluations.
So, those are three things that I would say we do that
would help deal with that issue.
Ms. Cofield. This is Joyce Cofield from the OCC.
Not dissimilar at all to what my colleagues have already
offered up, we also, at our unconscious bias trainings,
specifically with managers, dive down into the consequences of
bias within our processes, and our performance process is one
of those that we highlight. So, we are consciously not only
making sure that they are trained in this, but actually show
them how they use this in their everyday process in and of
itself.
In addition, we provide past performance ratings to our
managers prior to an upcoming performance rating so that they
can see what their trends and performances looked at in the
past, and then they can do their own self-reflections in terms
of whether or not there are things that they need to consider
differently.
Mr. Lawson. Ms. Pearson?
Ms. Pearson. Yes. At the FDIC, like my colleagues, we also
provide training to our rating managers, and we have a robust
review process.
The part that I would like to add that I don't think I have
heard yet is that we also train our employees and our managers
on their rating process, and we provide opportunities for our
employees to know how to put their best foot forward.
So, when they are providing information and feedback to
their managers, how can they explain information in a way to
make sure that their best foot is forward? In addition to the
training that we do, and in addition to the robust process, we
also make sure that our employees are prepared, and all of
those things work together to make sure we reach our goal of
fair and equitable process.
Mr. Lawson. Okay. And I think we have one--
Ms. Dingman. This is Lacey Dingman from the New York Fed.
And like my colleagues, we do a very similar process. I
know that we are out of time, but I would say that, like
Nikita, we also focus extensively on training, as well as, how
do we ensure that the process has carried itself through in
evaluating those ratings every year to make sure that there is
no unconscious bias or we mitigate unconscious bias in the
process?
Thank you.
Mr. Lawson. Okay. Thank you, Madam Chairwoman. I know I
have run out of time, and, with that, I yield back.
Chairwoman Beatty. Thank you.
The Chair now recognizes the distinguished gentlelady from
Texas, Congresswoman Garcia, for 5 minutes.
Ms. Garcia of Texas. Okay. I am doing it from a cell phone.
Can you all hear me?
Chairwoman Beatty. We can hear you and see you.
Ms. Garcia of Texas. Okay. Great.
Thank you so much, Madam Chairwoman, for choosing this
topic, as it is so important.
I want to start with Ms. Dingman from New York. You
mentioned a lot of the outreach and a lot of the programs that
New York is doing. What is, in your judgment, the best tool
that you all have that others should use as the best practice
to ensure that there is full participation from all the
protected classes?
I know I heard someone mention that they had an issue with
retention of Latinos. Since you are from New York, which has a
very robust Latino population, what is it that you may be
doing, that you might be able to share, that would help recruit
and retain Latinos in your organization?
Ms. Dingman. Thank you, Representative Garcia, for that
question. In regards to the Second District, you are very
correct, we have a strong Hispanic population, and we work very
hard to try and recruit Hispanics. Unfortunately, we have not
had the level of success that we would like to see, but we
continue to work to have in our recruitment processes diverse
slates, trying to make sure that there is a variety of
different thoughts and beliefs that are coming to the table for
each position that we consider.
And so, I would say that is the key, to continue to go
after that, as well as building robust relationships with
outside organizations that can help build that pipeline with
us. And I think, like many of my colleagues, we have a robust
relationship management that we do with a variety of different
Hispanic and African-American associations that help us build
our pipeline.
Ms. Garcia of Texas. Okay. Ms. Davy, for you, are there any
particular challenges in your organization with not only
outreach programs for all of the protected groups, but also
perhaps for any of the language barriers or different cultures,
for example, for our seniors to make sure that they feel that
they are included, and that when they use one of your
institutions, there are not only people who look like them, but
also speak like them?
Ms. Davy. Sure. Let me just do it in two parts.
First, internally, we make sure that we are recruiting from
Hispanic-serving organizations and schools. I think one of the
biggest impacts that has had in our organization is the
creation of our Hispanic resource group, CULTURA. That group is
involved with us in recruiting, coming out with recruiting
strategies. They also involve themselves in translation needs
that we may have as an agency.
Within the credit union system, it is extremely important
that our credit unions are inclusive, that they can look at
their products and services to make sure that they are offering
products and services in different languages. And I think that
has had a huge impact on our Minority Depository Institutions
in the credit union space, and making sure that they have
representation so that their teller lines, their boards, and
their management teams reflect the communities that they serve.
Ms. Garcia of Texas. Great.
And, Ms. Clark, I wanted to ask you--you talked about a lot
of your numbers, your mentoring, and all of the programs that
you might have. The biggest issue that I see with all these
programs--and I have been telling them for a long time, I used
to be the city comptroller in Houston and dealt with all kinds
of financial services groups, particularly investment banking
firms. The biggest, toughest thing is compliance.
We can write all these rules. You can make it mandatory.
You can decide to do it as voluntary. It can be self-assessment
or it can be imposed. But the real, real question of the matter
is: How do we make your industries comply? What would be your
recommendation to Congress on what we could do for better
compliance?
Ms. Clark. Congresswoman Garcia, are you addressing
compliance for the entities that we regulate? Are you speaking
compliance in that regard?
Ms. Garcia of Texas. Yes, ma'am.
Ms. Clark. I think that it will be up to the Members of
Congress to put forth what they feel is necessary in order to
have the institutions be compliant.
Ms. Garcia of Texas. What I am asking you is, what do you
recommend that would make it easier for you to help with
compliance? Again, we can switch from voluntary to mandatory,
but we still have to make people do it.
Ms. Clark. I think what would be helpful is, I think the
more information that we are able to receive and know what the
practices are of the institutions that we regulate, the better
we are able to serve the intention of the legislation that was
issued. I believe that continued dialogue and meeting and
conversing with each other and being intentional on the things
that we do would make it much more successful.
Ms. Garcia of Texas. Thank you.
Thank you, Chairwoman Beatty. I believe I have run out of
time.
Chairwoman Beatty. Thank you very much.
The Chair now recognizes the distinguished gentlewoman from
Pennsylvania, Congresswoman Dean, for 5 minutes.
Ms. Dean. Thank you, Chairwoman Beatty. Thank you for
holding this hearing. I am delighted to be here with you.
I wanted to first quickly ask a follow-up to the question
that Representative Green asked about the news reporting of
September 5th, that the Trump Administration had instructed
Federal agencies to end racial sensitivity trainings, and that
was followed by an OMB mailing to Federal agencies. So, I
wanted to ask just a yes-or-no question. We will go right down
the line.
Prior to the OMB notice, or after, has the Trump
Administration asked your agencies to stop diversity and
sensitivity training? If I could start with Ms. Cofield?
Ms. Cofield. I am not aware of that, no.
Ms. Dean. Okay. Thank you.
Ms. Clark?
Ms. Clark. I am not aware also that they have.
Ms. Dean. Thank you.
Ms. Dingman?
Ms. Dingman. No. Not that I am aware of.
Ms. Dean. Okay. And Ms. Pearson?
Ms. Pearson. Not that I am aware of.
Ms. Dean. And Ms. Davy?
Ms. Davy. No. Not that I am aware of.
Ms. Dean. Thank you very much. I appreciate that.
So much of the information that you are talking about and
the good work that you are doing revolves around who we hire.
And one of the things that we know, that we have learned of the
importance of diverse hiring panels, to ensure that a large
range of perspectives are offered when evaluating potential
employees. We know that hiring committees and panels with
little to no diversity can bring bias, even unintended bias. If
everybody looks the same, everybody has a similar background
and experience, there will be necessarily some built-in bias in
the review of applicants.
To that end--and I will go through each of you again--in
terms of diverse hiring panels, what is your agency doing to
ensure that? Ms. Cofield, please?
Ms. Cofield. We have a general rule that our panels are
diverse, and, in fact, in our executive committee, we actually
check in with each other on a regular basis as decisions are
made relative to selections as to what the diversity of the
panel is, and give each other feedback as to whether or not the
intent of that diversity is, in fact, real. So, the diversity
of the panels is a very important critical issue relative to
the selection process at OCC.
Ms. Dean. That is great. And it must be intentional. You
are absolutely right.
Ms. Clark?
Ms. Clark. At the Federal Reserve Board, we also have a
process by which the recruitment process enables people to
attend training on bias in the recruiting process.
We have diverse panels for all of our positions,
particularly on official staffs. I am involved in that process,
and I am in the process so that I can determine whether or not
we are being inclusive, not only from those who are being--the
interviewers, but also the candidate groups who are put forth.
And that is a regular part of our process overall. Diversity is
key.
Ms. Dean. Thank you very much.
And, Ms. Dingman, for the Fed of New York?
Ms. Dingman. We also have a diverse paneling process very
similar to my colleagues. We ensure that we have several panels
that participate in each of our hiring selections, and then we
review those metrics after the process is concluded to make
sure that we have maintained that process in its entirety. And
we feel like that has helped us in mitigating unconscious bias.
Ms. Dean. And is that a newer practice?
Ms. Dingman. That has been a practice since my time here at
the bank, but, admittedly, that has only been in the last year,
but I would say that it has been long before my time.
Ms. Dean. Terrific.
And Ms. Pearson?
Ms. Pearson. At the FDIC, we do recommend the best practice
of having diverse panels. In addition to that, we provide
unconscious bias training to our hiring managers. And the third
thing that we do is there is a selecting official, but there is
also a review process where there is an approving official who
reviews that particular selection for our job opportunities.
Ms. Dean. Thank you very much.
Ms. Davy?
Ms. Davy. Yes. At the NCUA, we have a policy that, whenever
possible, there be the inclusion of minority or women
representation on all interviewing panels.
Ms. Dean. That is fantastic. I am glad to hear all of that.
We do know that in order to be successful at recognizing
and prizing and hiring in diverse ways, we have to be
intentional. We have to critically examine who are our
applicants, who is in the pipeline, but also who is reviewing
them. So, I thank you all for your leadership there.
And I yield back the remainder of my time, Madam
Chairwoman.
Chairwoman Beatty. Thank you very much.
I would like to thank all of our witnesses for their
testimony today.
The subcommittee will now stand in recess for no longer
than 5 minutes as we transition to our second panel of
witnesses.
Thank you.
[brief recess]
Chairwoman Beatty. The subcommittee will return to order.
We now welcome the testimony of our second panel of
witnesses: Lorraine Cole, the Director of the Office of
Minority and Women Inclusion of the United States Department of
the Treasury; Pamela Gibbs, the Director of the Office of
Minority and Women Inclusion of the Securities & Exchange
Commission; Sharron Levine, the Director of the Office of
Minority and Women Inclusion of the Federal Housing Finance
Agency; and Lora McCray, the Director of the Office of Minority
and Women Inclusion of the Consumer Financial Protection
Bureau.
Witnesses are reminded that your oral testimony will be
limited to 5 minutes. A chime will go off at the end of your
time, and I would ask that you respect the Members' and other
witnesses' time by wrapping up your oral testimony. And without
objection, your written statements will be made a part of the
record.
Ms. Cole, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF LORRAINE COLE, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), U.S. DEPARTMENT OF THE TREASURY
(TREASURY)
Ms. Cole. Chairwoman Beatty, Ranking Member Wagner, and
distinguished members of the subcommittee, thank you for this
opportunity to testify and share the diversity and inclusion
efforts of Treasury's headquarters.
Diversity and inclusion emerged as a discipline over the
past 50 years or so, but I prefer to trace these values to the
words of the Great Seal of the United States, ``E Pluribus
Unum, out of many, one.''
Of course, hundreds of thousands of people were enslaved
when that motto came to be in 1776, so our nation's practices
did not exactly align with its founding principles. But we can
celebrate that this has been our long-standing ideal and our
continuing quest to this day.
I am pleased to have this opportunity to share Treasury's
ongoing work toward this end, including topics from our most
recent annual report, and activities undertaken in response to
the coronavirus pandemic.
Treasury has continued to increase utilization of minority-
owned and women-owned businesses. For example, in Fiscal Year
2019, more than one-third of the contracts for Treasury
Departmental offices, amounting to $112 million, were awarded
to minority- and women-owned businesses. These were among the
highest levels since OMWI began tracking such contracting.
Treasury has also worked to strengthen and sustain small
and minority-owned banks. Two years ago, Treasury launched a
program to engage large commercial banks with small and
minority-owned banks in mentor-protege relationships. Last
year, Secretary Mnuchin personally championed the expansion of
this program by writing to the CEOs of 26 of the largest banks
to invite their participation.
Treasury supported participation of Minority Depository
Institutions (MDIs) as lenders in the Paycheck Protection
Program (PPP). On March 3rd of this year, when Treasury
commemorated the 155th anniversary of Freedman's Bank, we never
could have envisioned that MDIs would be called upon weeks
later to address the economic fallout of the COVID-19 pandemic.
When the Paycheck Protection Program closed, 175 MDIs had
approved over 123,000 PPP loans, providing more than $10
billion to small businesses. In addition, 27 percent of all PPP
funds were distributed to low- and moderate-income communities,
which is proportionate to their percentage as a population.
Treasury strives to increase workforce diversity at all
levels of the agency. Thirty-six percent of employees across
all grade levels in Treasury's headquarters are racial or
ethnic minorities, and 44 percent of all employees are women.
We strive to promote a workplace culture where diversity
and inclusion is accepted as the responsibility of every
employee. For instance, all senior executives have a diversity
and inclusion element written into their performance plan. And
when the eight OMWI Directors jointly hosted a discussion on
race and racism following the George Floyd killing, one-third
of the 9,000 people who voluntarily participated were Treasury
employees.
Treasury works to inspire tomorrow's leaders. We conduct
the Treasury Scholars Program, hosting talented minority
students as interns from leading colleges and universities,
including HBCUs and HSIs. These experiences provide them with
marketable skills, inspire them to consider public service
careers, and even position them for future employment at
Treasury.
So in the spirit of E Pluribus Unum, we take seriously our
obligation to ensure that those who do the work of Treasury as
employees, contractors, or financial agents are representative
of the beneficiaries of our work: the American people.
I look forward to answering any questions you may have for
me.
[The prepared statement of Director Cole can be found on
page 68 of the appendix.]
Chairwoman Beatty. Thank you very much.
Ms. Levine, you are now recognized for 5 minutes.
STATEMENT OF SHARRON LEVINE, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), FEDERAL HOUSING FINANCE AGENCY (FHFA)
Ms. Levine. Good afternoon, Chairwoman Beatty, Ranking
Member Wagner, and the distinguished members of the
subcommittee. Thank you for the invitation to appear at today's
hearing.
Since October 2014, I have had the honor of serving as
Director of the Office of Minority and Women Inclusion of the
Federal Housing Finance Agency (FHFA). As this is my first
opportunity to testify before you, let me express FHFA's
appreciation for the work of the Subcommittee on Diversity and
Inclusion.
Central to FHFA's success is our commitment to diversity
and inclusion in both the Agency and our regulated entities.
This has been true for as long as I have worked at FHFA, and as
I will discuss in a moment, it has been a top priority of
Director Calabria's since he joined the Agency 17 months ago.
Our daily efforts to build and sustain a work environment
where everyone feels safe, respected, and valued for our
differences are always important and the prerequisite for FHFA
to be a world-class regulator as Congress intended. But today,
this work has taken on added significance and urgency.
The tragic loss of life and civil unrest that have roiled
our nation in recent months, as well as inequities that have
plagued too many communities for far too long, have left many
of our colleagues feeling vulnerable and distressed. These
events have also strengthened our resolve to ensure that racism
and hate are never tolerated at FHFA.
I am proud of FHFA's OMWI for stepping up this year with
Director Calabria's strong encouragement to support our
colleagues and help our entire Agency grow during this time. As
the Director has said many times in recent months, we must do
better. And I am grateful for his steadfast support of OMWI as
we have endeavored to answer that call within our Agency.
FHFA's commitment to diversity and inclusion extends far
beyond our recent efforts to respond to external events,
because it is both the core value and a statutory
responsibility. The Housing and Economic Recovery Act of 2008
(HERA) requires the FHFA to take affirmative steps to seek
diversity in its workforce at all levels of the Agency,
consistent with the demographic diversity of the United States.
To lead that effort, FHFA established its OMWI in January 2011,
pursuant to Section 342 of the Dodd-Frank Act. And unlike other
federally-regulated financial institutions, our regulated
entities are required by law to establish an OMWI, or its
functioning equivalent, to promote diversity and ensure
inclusion in all business activities.
Today, I will provide an overview of our work to fulfill
those statutory responsibilities. This work is described in
more detail in my written testimony, as well as in our 2019
OMWI Annual Report to Congress, which FHFA released in March
2020, and which is attached to my written testimony.
FHFA has a strong track record of promoting diversity at
every level of the Agency's workforce, including management and
executives. In fact, I am proud to say that FHFA has one of the
most-diverse workforces amongst Federal financial regulatory
agencies. But that does not mean that our work is complete.
Indeed, from his very first day in office, Director
Calabria has taken steps to raise the profile and strengthen
the impact of FHFA's OMWI. On his arrival to the Agency, the
Director ensured that the OMWI Director's position on FHFA's
executive committee was strengthened.
The Director has provided leadership necessary for the
Agency to take concrete steps and undertake pioneering new
initiatives to uphold fairness, diversity, and inclusion as
foundation values of all that we do.
These steps include elevating the new Office of Equal
Opportunity and Fairness into its own division level office
under the Director; conducting FHFA's second diversity and
inclusion climate assessment; instituting a mandatory
unconscious bias training for all employees; commissioning and
conducting barrier analyses to ensure fair and equitable wages,
merit promotion procedures, and opportunities across the
Agency; launching the Agency's first diversity advisory council
that would help elevate and support Agency diversity and
inclusion initiatives; utilizing the Agency's internship
program to foster a diverse employee pipeline; and prioritizing
OMWI's special emphasis program events, the second-most recent
of which hosted historian Richard Rothstein to discuss his
book, ``The Color of Law: A Forgotten History of How Our
Government Segregated America.''
In the interest of time, I will conclude by noting that my
written testimony contains more details about these initiatives
and FHFA's work to direct and supervise the diversity and
inclusion programs at the regulated entities.
Thank you again for the opportunity to testify today. I
look forward to answering your questions.
[The prepared statement of Director Levine can be found on
page 95 of the appendix.]
Chairwoman Beatty. Thank you very much.
Ms. Gibbs, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF PAMELA GIBBS, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), U.S. SECURITIES AND EXCHANGE COMMISSION
(SEC)
Ms. Gibbs. Thank you.
Chairwoman Beatty, Ranking Member Wagner, and members of
the subcommittee, thank you for the opportunity to testify
today to highlight the SEC's efforts to enhance diversity,
inclusion, and opportunity.
I commend this committee for its role in passing Section
342, and for your vision and commitment to equality and access
to opportunity. Section 342 has had a significant impact on the
Federal financial regulatory agencies and the entities that we
regulate. It is largely responsible for the advances made by
women and minorities over the years.
Since its inception, the SEC's OMWI has focused its
critical mandate under Section 342 of the Dodd-Frank with the
goal of developing and implementing programs that would lead to
enhanced diversity, inclusion, and opportunity for women and
minorities at the SEC, the industry we regulate, and
underrepresented communities.
The outcomes achieved over the years with regards to
hiring, promotions, business supplier diversity, training,
outreach efforts, and interaction with our regulating entities
demonstrates that the SEC's OMWI has been effective at
promoting change.
During my tenure, the diversity and inclusion efforts have
moved from a place of theoretical discussions about
programmatic activities to the implementation of significant
strategies and actions that have resulted in tangible outcomes
with regards to workforce, supplier diversity, and assessment
of our regulating agencies, particularly under the leadership
of Chairman Jay Clayton.
At the SEC, the 4,500 talented men and women are our most
important assets. Their expertise is essential to the effective
oversight and regulation of our vast, complex, and ever-
changing capital markets. Promoting diversity and inclusion in
our workforce is not only a shared agency commitment; it is
also value-enhancing.
At the SEC, I believe that our efforts have provided
tangible proof of this value proposition. Increased diversity
and inclusion has enhanced the SEC's performance and, as a
result, benefited investors, issuers, and other market
participants.
In addition to the efforts at SEC, OMWI also provides
leadership and guidance on diversity and inclusion on matters
that affect market participants and the entities that we
regulate.
First, OMWI has engaged with each of the SEC's external
advisory committees and has provided direct input to these
committees to ensure that all have embraced the need for
hearing diverse perspectives of members critical to the success
of the committees. Recent candidate selections and public
meetings evidence this understanding.
We are also looking to the industry we regulate to be
leaders in promoting opportunities for historically
underrepresented populations within their workforces. We have
conducted significant outreach in this regard.
Earlier this year, the SEC again issued its Diversity
Assessment Report to our regulated entities, and we have
continued to look for creative ways to incentivize
participation in this initiative. We continue to remain
encouraged with the progress of our regulated entities, and
OMWI will continue to take steps to encourage engagement and
collaboration for our entities.
Finally, OMWI has implemented an outreach and technical
assistance strategy that has increased minority- and women-
owned businesses' awareness of the SEC's requirements and
participation in agency contracting, resulting in sustained
improvements over the 8 years during my tenure as OMWI
Director.
Thank you again for the opportunity to testify with my
fellow OMWI Directors today on this important topic. While I
believe that the SEC has come a long way in its efforts to
promote diversity and inclusion, there is still much work that
needs to be done. We will continue to emphasize its commitment
to respect diversity, inclusion, and opportunity for all, and I
look forward to your questions.
Thank you.
[The prepared statement of Director Gibbs can be found on
page 93 of the appendix.]
Chairwoman Beatty. Thank you very much, and now, Ms.
McCray, you will be recognized for 5 minutes.
STATEMENT OF LORA MCCRAY, DIRECTOR, OFFICE OF MINORITY AND
WOMEN INCLUSION (OMWI), CONSUMER FINANCIAL PROTECTION BUREAU
(CFPB)
Ms. McCray. Thank you. Good afternoon, Chairwoman Beatty,
Ranking Member Wagner, and members of the subcommittee. Thank
you for the opportunity to update you on our initiatives at the
Consumer Financial Protection Bureau. I am Lora McCray, the
Bureau's OMWI Director. I am pleased to share with you some of
the Bureau's proactive efforts to integrate diversity and
inclusion (D&I) across the Bureau and in our businesses.
As noted in the most recent Office of Minority and Women
Inclusion report, in Fiscal Year 2019, with the support of
Bureau leadership, we saw increases in gender and ethnic and
racial diversity in our workforce. We expanded our recruitment
and outreach efforts to attract diverse staff. We conducted
extensive outreach to entities we regulate to understand their
D&I practices and developed an online system to collect and
analyze that information.
We continued cultural programming to foster a more-
inclusive workplace. And finally, we expanded our strategies to
include minority- and women-owned businesses in Bureau
contracting opportunities.
I actively work to fulfill the statutory mandate in Section
342 of the Dodd-Frank Act to ensure that regulations, policies,
and financial solutions developed by the Bureau are relevant
for all consumers, and definitely integrate D&I into our
organization.
Given the challenges our country is facing as we struggle
to deal with the continued incidents of racial violence and
inequity, advancing D&I is more important than ever. Under the
leadership of Director Kraninger, I implemented a forward-
leaning action plan shortly after the tragic death of George
Floyd on May 25th, to assist staff and management with tools
and resources in dealing with these events.
I collaborated with my peers to deliver a Federal, multi-
financial agency OMWI webcast on race on June 24th. And in
addition, OMWI created racial equity learning resources for all
Bureau employees that address specific racial issues such as
anti-racism, bias, and White privilege, as well as management-
focused guidelines for addressing racial bias--racial issues in
the workplace.
My team is continuing to work with and support staff as
they deal with these ongoing issues. The Bureau's mission is
best accomplished with a qualified, diverse, and inclusive
workforce that reflects the nation's diversity. The Bureau has
developed robust outreach and recruiting efforts at colleges
and universities, trade associations, and professional
organizations, including minority- and women-focused
organizations.
And as a result of that, we have built a diverse,
competitive workforce. As of July 2020, women make up 50
percent of the Bureau's workforce, and minority employees make
up 41 percent of the workforce. And with respect to leadership,
49 percent are women, compared to 34 percent government-wide,
and 36 percent are minorities, compared to 21 percent
government-wide.
In January 2020, the Bureau launched an online data
collection tool called Inclusivity, to collect and manage
submitted diversity self-assessment data from our regulated
entities. We reached out to over a thousand institutions to
encourage them to submit their D&I assessments.
Although the response rate has been impacted by the
pandemic, we continue to conduct direct outreach to the
entities and to work with trade organizations to educate
financial institutions on the benefits of D&I and to encourage
them to adopt best practices.
The Bureau also engages in an array of initiatives to
promote an inclusive work environment, and foster equity,
collaboration, and greater productivity. Each month, I issue a
message to all employees, sharing information, resources, and
perspectives on D&I topics.
In January, the Bureau launched the Mentoring for Success
Program to enhance professional development. It includes 35
matched mentor-protege pairs that meet regularly, a leadership
speakers series, and group discussions on career development.
And the Bureau continues to prioritize business
opportunities for minority- and women-owned businesses (MWOBs).
We conduct targeted outreach to encourage MWOBs to seek
business opportunities with the Bureau, and provide technical
assistance, including our quarterly, ``How to Do Business With
the Bureau,'' series.
Our efforts have resulted in positive trends, going from
9.2 percent spend with MWOBs in Fiscal Year 2017, to 28.9
percent in Fiscal Year 2019. And in the current fiscal year, we
are on track to see further increases in this area.
In conclusion, while we made significant progress on our
D&I strategies in 2020, there is more that the Bureau can
accomplish. In our commitment to serve the interests of all
consumers, it is critical that we reflect the ways that
consumers from different backgrounds, cultures, and
perspectives interact in the financial marketplace.
I look forward to working with the subcommittee to achieve
the goals of Section 342, and I am happy to answer any
questions that you may have.
Thank you.
[The prepared statement of Director McCray can be found on
page 100 of the appendix.
Chairwoman Beatty. Thank you very much. I now recognize
myself for 5 minutes for questions.
Ms. Gibbs, in 2018, the SEC invited nearly 1,400 regulated
entities to submit self-assessments, yet only about 38
responded. I certainly appreciate your enthusiasm and hope. Can
you tell me, is there anything we can do, or why do you think
that you had so few submit their assessments?
Ms. Gibbs. Thank you for that question.
Thinking back to 2018, one of the biggest reasons why I
think we have had such low response rates is primarily because
of lack of understanding. I think at that particular time, the
entities that we regulate did not quite understand what we were
doing. I am pleased to say that the SEC has gone out with a
second round of diversity assessment reports, and the numbers
are much more pleasing, and have drastically improved, I would
say, and that is because we have done a lot more outreach. We
have engaged our regulated entities, we have talked about the
diversity assessment report, Chairman Clayton talks about
diversity--
Chairwoman Beatty. I don't want to cut you off, but I have
to ask these questions. So, you are hopeful that the numbers
will go up?
Ms. Gibbs. Yes. The more our entities understand it.
Chairwoman Beatty. Thank you. Ms. McCray, can you tell us
why the Consumer Financial Protection Bureau only began
collecting data this year?
Ms. McCray. Certainly. I joined the Bureau in January of
2019, so I am speaking based on information that I learned as I
came into the Bureau. My understanding was that under the
previous leadership, they had been looking to do outreach and
engagement with the entities to get a more robust understanding
of what barriers might exist and understand where the different
institutions were in terms of diversity and inclusion in the
marketplace.
Chairwoman Beatty. Okay. Thank you very much.
Ms. Levine, as you know, FHFA is subject to Section 1116 of
the Housing and Economic Recovery Act (HERA). Can you share how
you have leveraged your authority to collect data from
regulated entities?
Ms. Levine. Yes. We developed and implemented an
examination program in 2017, so we have almost completed 4
years of examining our regulated entities. And we have
collected very detailed data that conforms to our minority and
women inclusion rules. We collect quarterly data, and that
leads to annual data. That way, we are able to analyze that
data and determine the performance of the regulated entities,
as well as trends.
Chairwoman Beatty. Okay, thank you. As systemic racism
continues to impede full economic inclusion of diverse
communities, OMWIs were created in part, as you all know, to
prevent abusive practices. This is a yes-or-no question for
everyone. Do you believe systemic racism exists? Ms. Cole, yes
or no?
Ms. Cole. Yes, absolutely.
Chairwoman Beatty. Ms. Gibbs?
Ms. Gibbs. Yes.
Chairwoman Beatty. Ms. Levine?
Ms. Levine. Yes, I do.
Chairwoman Beatty. Ms. McCray?
Ms. McCray. Yes.
Chairwoman Beatty. Thank you very much.
Without objection, I would like to enter into the record a
letter that came from the Executive Office of the President of
the Office of Management and Budget, that makes a statement. I
won't read it, but I will enter it in the record, so without
objection, it is so ordered.
I don't know if you are familiar with this letter, but
basically it made a statement that we should cease and desist
training for diversity and inclusion. Do you think any of your
trainers or training perpetuates a view that all White people
contribute to racism or benefit from it? This is from their
letter. And that is a yes or a no, and we will go Ms. Cole, Ms.
Gibbs, Ms. Levine, and Ms. McCray.
Ms. Cole. No, that does not characterize any of our
training.
Chairwoman Beatty. Thank you.
Ms. Gibbs?
Ms. Gibbs. No, it does not characterize any of the training
at the SEC.
Chairwoman Beatty. Ms. Levine and Ms. McCray?
Ms. Levine. Not at all at the FHFA.
Chairwoman Beatty. Would you also say that your training
and the work that you do with OMWI has been value-enhancing,
yes or no?
Ms. Cole. Yes, it has.
Chairwoman Beatty. Thank you.
Ms. Levine. Yes.
Ms. Gibbs. Yes.
Chairwoman Beatty. Okay. Thank you. I yield back. My time
is up.
Now, I recognize the distinguished gentleman from Ohio,
Congressman Gonzalez, for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Chairwoman Beatty, and
thank you to the second panel for being a part of today's
hearing. I have a series of questions I am just trying to run
through quickly because I know our time is short.
I am going to start with Ms. Cole. As there are so many
challenges each day throughout the past 6 months, how has the
Treasury Department maintained a focus on promoting diversity
and inclusion throughout the pandemic?
Ms. Cole. Initially, certainly after the killing of George
Floyd, we knew that there was a lot of trauma within the nation
and among our employees. We know that individuals don't leave
that pain, that confusion, and that anger at the door when they
come to work. So, we knew that it was important for us to
address these issues, not only as a compassionate activity, but
also as an important business decision, because we know that
this can affect productivity.
So, one of the things we did as a group, as an OMWI group,
was to put on a program to address the feelings, the issues,
and some of the solutions and actions that could be taken by
employees relative to the upheaval that was precipitated by the
George Floyd incident.
Mr. Gonzalez of Ohio. Thank you. And was that just amongst
the OMWI staff, or did the OMWI staff sort of spearhead the
initiative and all of Treasury participated?
Ms. Cole. It was the OMWI staff, and actually it was an
interagency activity with all of the OMWI, the eight OMWIs, and
it was open to all Treasury employees.
Mr. Gonzalez of Ohio. Very good. Thank you.
My next question will be for Ms. Gibbs. One thing that we
have talked about a lot in this subcommittee, and I hear it
often, is, there are not enough opportunities for minority
businesses to manage assets for pensions, the opportunity to
participate as asset managers, which is, of course, an
incredibly lucrative field and a wonderful opportunity for
those fortunate to be in that field.
My question is, in your role, I would just be curious to
hear your perspective on the steps that need to be taken to
make sure that we have more diverse fund managers and more
opportunities for those in the asset management field?
Ms. Gibbs. Thank you, Congressman, for that question. It is
a very important question to the SEC. The SEC has four advisory
committees, and one of our advisory committees is the Asset
Management Advisory Committee. And in my partnership
relationships over the years, I have had an outstanding
relationship with the National Association of Securities
Professionals.
This issue has come up a number of times over the years,
and what I would say is, I am pleased to say that the SEC has
started to look at this issue around diverse asset managers and
what the SEC's rules can do, if we can do anything additional,
to help minorities [inaudible] We held a wonderful panel in
July that explored and outlined the issue--what is the issue
that diverse asset managers face?
We are having a second panel on September 16th that will
continue to explore this issue and hopefully help develop
solutions that can address the underlying cause of lack of
utilization of diverse asset managers.
Mr. Gonzalez of Ohio. Thank you. And I would like to urge
you to continue on with that initiative.
My final question is for Ms. McCray. In your view, how have
minority communities, in particular, been impacted by fraud
during the pandemic? I know that has been a major issue. I
would love to just hear how they have been targeted, and any
steps, anything that we should be aware of in our position.
Ms. McCray. Thank you. I will start off by saying I am
probably not the best person at the Bureau to give information
on that. We have a whole team of people who focus very
specifically on it.
What I will say is, in terms of my understanding of
minority communities and how they are affected by things that
are going on, we have seen historically--and this time is no
different--that when you have these kinds of situations coming
down, minority communities tend to be more impacted and more
negatively impacted. They tend to have more of a lack of
information. They tend to have less access to resources. So,
they will feel the brunt of something that is going on, more so
than the majority community will.
One of the things the Bureau has been doing over the course
of the pandemic is really issuing a lot of information so that
we can help inform minority communities, to make them aware of
their rights, to make them aware of what to be on the lookout
for, to make them aware to be on the lookout for scams and how
to deal with those. We have an excellent complaint system at
the Bureau where people can file a complaint if they fall
victim to something like that, or believe they have been--
Mr. Gonzalez of Ohio. I think my time is up.
Ms. McCray. Oh, I'm sorry.
Mr. Gonzalez of Ohio. Thank you. I yield back.
Ms. McCray. You are welcome.
Chairwoman Beatty. Thank you. It is my honor now to go to
the distinguished gentleman from Missouri, Congressman Clay,
who is also the Chair of our Housing and Insurance
Subcommittee, for 5 minutes.
Mr. Clay. Thank you so much, Madam Chairwoman, and I find
this hearing to be quite productive, and I appreciate you
holding it.
And this is for the entire panel. In 2015, a House
Financial Services Committee staff report on the fifth
anniversary of Dodd-Frank found that across the financial
regulatory agencies, African-American employees generally
received lower performance management review scores than White
employees.
And to all the panelists, what policies and practices have
your offices implemented to help eliminate bias and other
problems in your performance review process that may have
caused those performance ratings disparity, and to what extent
have your agencies corrected those ratings disparities since
the committee's 2015 review? Whomever wants to start can jump
in, please proceed.
Ms. McCray. Okay. This is Ms. McCray. I will start. What I
will say is at the CFPB, we did an assessment and really looked
at the performance rating system. We ended up changing our
system into a two-party--a two-level rating system.
We also did a review of all of our personnel standards to
really make sure that they were accurate. And we have added to
our performance management process training for everyone,
training for the managers who are going to be doing the review
process, as well as training for the people who are filling out
self-assessments and are being reviewed.
In addition, in our process, we have included more of a
feedback loop. There is an opportunity for people to do a self-
assessment and provide that to their manager who is going to be
doing their rating. So, they are having the opportunity to
bring things to the manager's attention.
We also have included check-in meetings and coaching as
well, again, to try to make sure that employees are able to
communicate what they are doing and that managers are giving an
accurate assessment. And as I said, with the standards, making
sure the standards that are being used to do the measurement
are accurate.
Mr. Clay. Just follow up, Ms. McCray, you are confident in
the metrics being used to hold management accountable for these
evaluations?
Ms. McCray. Yes, I am. And actually, the one thing I would
add is that--and this actually goes to the earlier question
about training, we include in our training for supervisors,
training on unconscious bias to make sure that people are aware
not to bring their biases into the performance management
process. And it is a mandatory training that everyone who
becomes a supervisor at the Bureau has to take.
Mr. Clay. Thank you.
Ms. Levine, how do you hold management accountable for
these evaluations?
Ms. Levine. FHFA has done several things. To begin with,
the Director recently established an Office of Equal
Opportunity and Fairness, which he did in January when he
restructured the agency's divisions, and that would be one of
the topics that--and issues that the [inaudible] particular
division.
In addition to that, FHFA has elevated diversity and
inclusion as a competency, and that is included in the Job
Performance Plan (JPP) of every manager and supervisor.
Moreover, we have an annual managers conference where the
managers and supervisors are actually trained in a number of
areas, including spotting and recognizing unconscious bias in
all aspects of the employment lifecycle--so recruiting, hiring,
interviewing, any number of those areas.
Mr. Clay. Thank you.
And Ms. Gibbs, can you share with us what happens at your
agency?
Ms. Gibbs. Since 2015, I would say that we put in a number
of increased protocols, training and guidance around
performance management. Also, our performance management system
has changed a little bit over the years, meaning that we are
going through a five-tier process to a three-tier process, some
of the many things that Director McCray from the CFPB has
highlighted.
Also, on phone calls, calibration processes are put in
place to make sure that, how you calibrate the system, and are
there any biases that are part of the system. We have an EEO
office at the SEC that is separate from the OMWI office, and
that office looks at, and continues to look at on a continuing
basis, not just when asked, whether or not there are particular
parts of our system that have bias or barriers in them that
impedes full utilization of our workforce.
So, the bottom line is that we have come a long way since
2015, and we have added protocols in place to avoid any bias in
our system.
Mr. Clay. Thank you, Ms. Gibbs.
Madam Chairwoman, was that a buzzer for me?
Chairwoman Beatty. Yes. The gentleman's time is up.
Mr. Clay. Okay.
Chairwoman Beatty. Thank you very much.
Mr. Clay. Thank you so much. I yield back.
Chairwoman Beatty. Thank you. The Chair now recognizes the
gentleman from Texas, Congressman Green, who is also the Chair
of our Oversight and Investigations Subcommittee, for 5
minutes.
Mr. Green. Thank you, Madam Chairwoman. It is an honor to
have the opportunity to speak again. I want to go back to H.R.
8160, the bill that would require the regulators to examine
whether or not diversity and inclusion is being met in the
various agencies that they regulate. And I am going back to it
because as I understand it, there are some people who would say
that this is not enough, and to those persons, I would simply
want to contend that this may not be enough, but it is my
belief that even when you can't do enough, you should at least
do all that you can, and I think that this is something that
can be done.
This bill does not in any way encroach upon anything other
than the invidious discrimination that takes place, the
inability of minorities to achieve status among the upper
management in these corporations. And to those who would say,
well, this bill will force people to do what they can do
voluntarily, the retort to this is, of course, if this could be
done voluntarily, it would have been done already. We have had
10 years of Dodd-Frank, and it has not been done.
I would believe that over the 10-year period, if we could
have accomplished this without legislation, we would have. So,
H.R. 8160 is a means by which we can have regulators examine
whether or not this diversity and inclusion is actually taking
place.
Are we really eliminating the systemic racism that exists
in the country? There is something called a CAMELS Rating
System, and this rating system is a means by which
international organizations are rated, and I see no reason why
we can't have the same rating system that is accepted
internationally, be used for what we are doing currently.
The CAMELS Rating System tests the capital adequacy, the
assets, the management capability, the earnings, the liquidity,
and the sensitivity of various corporations. We are just asking
that diversity and inclusion be examined as well, and to
require that there be diversity officers within these
organizations, and that meetings take place, contrary to, of
course, what the President would have. In the President's
America, it is anti-American to have diversity and inclusion as
an agenda item.
Unfortunately, he has an America that is shrinking. Most
people, I believe, in this country, want to see everybody
treated fairly and equally, and to do this, we can simply wait
for it to happen, or we can have legislation comparable to what
we are presenting to this body. So, I am asking my colleagues
to please take a look at this legislation and give me your
thoughts on it.
It is anti-American to do what the President is doing,
which is to ban diversity training and call it anti-American.
The President is doing the country a disservice with this kind
of behavior, and my hope is that we will have legislation in
place such that future Presidents will honor the will of the
country and the Constitution.
Now, let me just ask quickly Ms. Cole, do you find
diversity and inclusion to be something that is beneficial not
only for the people who are the centerpiece of the diversity
and inclusion, but also for people in general within the
corporate structure? Could you give me a yes or a no, please,
ma'am?
Ms. Cole. Oh, that is a definite yes.
Mr. Green. Okay. And Ms. Gibbs, similar question to you.
Diversity and inclusion, does it benefit the entirety of the
corporation as opposed to just the people who are the focus of
the diversity and the inclusion, meaning the women and the
minorities? Is that a yes or a no?
Ms. Gibbs. Yes, to both.
Mr. Green. Okay. And Ms. Levine?
Ms. Levine. Yes. And that has been validated by the
responses from our workforce.
Mr. Green. Ms. McCray?
Ms. McCray. Yes, it benefits everyone.
Mr. Green. Finally, just a closing comment, I think that
Madam Chairwoman is truly to be commended for this hearing.
This hearing really brings into focus this need for the
diversity and inclusion training as well as for legislation
that will require this kind of training in various entities
that are regulated by the Federal Government. So, I thank you
again for what you are doing, and I yield back.
Chairwoman Beatty. Thank you very much, Congressman Green.
I now have the distinguished honor to recognize the
gentleman from Florida, Congressman Lawson, for 5 minutes.
Mr. Lawson. Thank you very much, Madam Chairwoman. And this
question can start off with Ms. Cole, and then we can go down
the line. During the global pandemic, Community Development
Financial Institutions (CDFIs) have stepped up to provide
mortgage forbearance, loan deferments, and modification to help
address our needs.
Ms. Cole, with respect to the ongoing pandemic, to what
extent has your OMWI been eager, and engaged in proposals to
enhance the work of the Minority Depository Institutions
(MDIs)--I am tired of all these acronyms, but anyway--MDIs
during the pandemic response? For example, ensuring that MDIs
and minority CDFIs are able to fully participate in the PPP
Main Street lending programs.
Ms. Cole. First of all, the Treasury put a lot of energy
into ensuring that MDIs participated in the PPP program as
lenders. During the second round, guidance was issued to the
lenders to redouble their efforts to support small businesses.
A set-aside was established, so that loan funds would be
designated for MDIs, for small business lending.
The Deputy Secretary and the SBA Administrator held a
roundtable with MDI lenders to gain insight for policy
improvements to the lending program. And there was close
monitoring throughout the PPP program to ensure that we
understood the lending patterns throughout and that there was
transparency to identify gaps in funding.
You had mentioned the CDFI Fund. In Fiscal Year 2019, the
CDFI Fund awarded nearly $16 million to MDI banks and credit
unions that support predominantly minority communities.
And earlier this year, when we were commemorating the 155th
anniversary of the Freedman's Bank, we convened about 200
professionals to discuss MDI programs within the Federal
Government, and to highlight the things that they are doing and
to get feedback on things that we could do better.
Mr. Lawson. Okay. According to what you just said, thats
mean that you implemented policies to ensure that agency
contracts are making a good-faith effort to promote workplace
diversity?
Ms. Cole. I beg your pardon. In terms of workforce
diversity, we do--first of all, Treasury is not a regulator. We
are the only OMWI agency that is not a regulatory agency, so we
don't have regulated entities that fall under the mandate to
ensure workforce diversity of regulated entities.
However, we do an analysis of contractors to ensure
contractor workforce diversity as part of the good-faith effort
mandate that is part of Section 342. And we do that annually.
We do a good-faith effort analysis of a random sampling of
Treasury contractors, Treasury Departmental office contractors.
Mr. Lawson. Okay. I have less than a minute. Is this true
with the rest of the panel in terms of contractors, making a
good-faith effort? Does everyone look at that the same way?
Ms. Levine. Yes. FHFA, on an annual basis, does a review
with our contractors to ensure they are making a good-faith
effort to provide--
Mr. Lawson. Okay. I have about 20 seconds left.
Ms. McCray. CFPB includes in our contract, a clause about
the GSE requirement to make contractors aware, and we do an
analysis and also request them to submit information to us so
we can verify that they are making that good-faith effort.
Mr. Lawson. Okay. Thank you. Is that the bell for me to
continue or to yield back?
I yield back.
Chairwoman Beatty. Thank you, Congressman Lawson.
The Chair now recognizes the distinguished gentlewoman from
Pennsylvania, Congresswoman Dean.
Ms. Dean. Thank you, Madam Chairwoman, and I thank you and
all of our panelists for coming together today to discuss this
important topic. I am delighted to be on this subcommittee to
examine diversity and inclusion as closely as we can in order
to move us forward.
We know that diversity is our strength. I would like to ask
each of the panelists, rather quickly, in a follow-up to what
Representative Green talked about, which is the reporting of
September the 5th, that the Trump Administration had instructed
Federal agencies to end racial sensitivity trainings.
I want to ask each of the Directors from these very
important agencies, what direction, either before or after the
OMB letter, had you received? What directions or suggestions
had you received from the Administration in terms of diversity
training and possibly suspending or ending some of it? I will
start first with Treasury Director Cole.
Ms. Cole. Yes. To date, we have not received any
instructions in terms of our diversity training. That came out,
I guess late Friday, and as of this point, we don't have any
definitive instructions about how to move forward.
Ms. Dean. Thank you.
Director Gibbs, for the SEC?
Ms. Gibbs. Prior to September 5th, we had received no
guidance as it relates to diversity training.
Ms. Dean. And beyond that? Since that time?
Ms. Gibbs. We are still waiting for guidance. I believe the
OMB memorandum said that further guidance would be offered to
the agencies.
Ms. Dean. And Director Levine, for the FHFA?
Ms. Levine. To my knowledge, we have received nothing.
Ms. Dean. Thank you.
Director McCray, for the CFPB?
Ms. McCray. We haven't received any direction on that
either before or after.
Ms. Dean. Thank you very much. I also wanted to talk about
hiring panels. We know that in order to break down the barriers
for a more diverse population in our hiring, we need to make
sure that the hiring panels are diverse themselves, because
when evaluating potential employees, we know that panels that
have very little diversity can bring bias, even if it is
unintended, just a bias of a common background.
For reviewing applicants, what are your agencies, under
your OMWI direction, doing regarding hiring diverse--or using
diverse hiring panels? And I will just go in the same order.
Director Cole, for Treasury?
Ms. Cole. Yes. It is a policy within Treasury that the
executive review boards that are formed, particularly to
evaluate and to recommend executive-level candidates for
positions, it is a requirement that those panels are diverse.
Ms. Dean. Thank you.
And Director Gibbs, SEC?
Ms. Gibbs. The SEC has a very robust hiring process that
incorporates objective questions and also diverse hiring panels
at all levels.
Ms. Dean. So, you always use diverse hiring panels?
Ms. Gibbs. Yes, to the extent that we can.
Ms. Dean. Okay.
Director Levine?
Ms. Levine. FHFA's practice is to use diverse hiring panels
as we go up. And so at the executive level and the supervisory
levels, we do have diverse panels.
Ms. Dean. How about at the entry level?
Ms. Levine. Not as much. It is not a policy, but we are
trying to make that a broader practice across the agency.
Ms. Dean. Yes, of course, because those who come in first,
we hope will become upper-level members of your agency.
And Director McCray, for the CFPB, what is your practice in
terms of diverse hiring panels?
Ms. McCray. We recommend the use of diverse hiring panels
for selections. Also, for some positions that require subject
matter expertise, we have subject matter expert panels, and for
those, the applicant is really blinded to them, so they know
nothing personally about the person other than the information
related to their skill set.
And in addition to that, we include, as I mentioned
earlier, unconscious bias training, and we use structured
interviews as well.
Ms. Dean. Of course, it is one thing to recommend it, and
it is another to be very intentional. And I am talking about
the panelists, not the applicant, being blinded, but that the
panelists should be diverse. So, I would hope that CFPB would
be very intentional with that.
And with that, Madam Chairwoman, I thank you for the time,
and I yield back.
Chairwoman Beatty. Thank you very much.
The Chair now recognizes the distinguished gentlewoman from
Texas, Congresswoman Garcia, for 5 minutes.
Ms. Garcia of Texas. Thank you, Madam Chairwoman, and
again, thank you so much for bringing attention to this very
important matter. And it may be that it is because I have only
been here for a year-and-a-half, almost at the end of my first
term, and maybe I didn't hear where we were, to figure out what
progress we have made up to today. But unlike some of my
colleagues, I am not sensing that we are making a lot of
progress here, and to hear, not just in this panel, but even
from panel one, excuses like, well, they don't understand what
they are supposed to be doing, or, well, they are confused, or
this, it is like, it has been 10 years, and this is not a new
ball game in town. This is just about doing the right thing.
Ms. Gibbs, I wanted to start with you. You mentioned the
number of advisory committees that you all have put together at
the SEC. Just know that the Asset Management Advisory Committee
has a dear friend of mine--I am from Houston--Gilbert Garcia is
on one of those. And while I am very happy for Gilbert, I am
not happy that when you look at all of the other committees and
the number of members on the committee, and I think that
Chairwoman Waters and Chairwoman Beatty sent a letter back in
January that said that of the 79 advisory committee members,
only three of them were Black, zero were Latina, and only one
was a Black woman. Surely, in 2020, we can do better than that.
So did your office have a role in that, in giving names to
the chairman and developing the committees and developing its
membership?
Ms. Gibbs. Thank you for that question. My office is
actively involved in most of--maybe, I can say that we are
actively involved in all of the committees. So, we do thank you
for the letter that came in--
Ms. Garcia of Texas. Were you involved in the formation of
the committees and naming the people to serve on the
committees?
Ms. Gibbs. I am involved in making recommendations to some
of the committees, but not in how they are formulated.
Ms. Garcia of Texas. Right. So, don't you think that we can
do better?
Ms. Gibbs. Yes, we can do better with the representation,
and OMWI is actively involved with the committees in terms of
developing a slate. So just like we work with workforce
diversity, it is developing a pipeline, who would want to serve
on these committees, who are they, and what is their expertise,
and that is what OMWI is actively involved in.
We also made a decision to bring on board a good colleague,
Robert Marchman, who is now the Chair of the Investor Advisory
Committee. So, we have taken a number of steps this year in
particular, to make sure that OMWI is embedded into, actively,
the selection and the topics of these advisory committees.
Ms. Garcia of Texas. Are you committed to making sure that
those committee assignments are more reflective of the
population in our country?
Ms. Gibbs. Absolutely.
Ms. Garcia of Texas. So, when can we expect to see some new
faces at the table?
Ms. Gibbs. I believe when vacancies occur, usually there is
a set number, and so when a vacancy occurs, we are hopeful.
That is what I would say, is that we are hopeful. I believe
selections have been made positively in terms of African
Americans for two of the subcommittees already, and that is the
Small Business Advocate Advisory Committee and the Investor
Advisory Committee.
At the time, I am not sure that we are currently--I am not
sure about vacancies on the Asset Management Advisory Committee
(AMAC), but we are working with them if vacancies do come up,
and we have a slate of African Americans, in particular, who
may be interested in serving on the committee.
Ms. Garcia of Texas. As a Latina, I would also encourage
you to recruit and name a Latina. Obviously, women at the table
also makes a difference, and they need to be women of color, in
addition to other women. So, I would appreciate that.
Quickly, I want to go to Ms. McCray. I know my colleague,
Mr. Gonzalez, asked about fraud, and I particularly wanted to
ask about what you all are doing in terms of outreach for fraud
perpetrated against people with language barriers or with
seniors.
Ms. McCray. Thank you for that question. We actually have
been recently focused, particularly during the time of the
pandemic, on reaching out to people who have limited English
proficiency.
And I am going through my notes because I actually have
some notes here, that I wanted to make sure I got that
information correct. But I know that we did a symposium--not a
symposium, but a shareholder meeting to really engage with
people to find out, we are working to make sure that people are
getting access to the information and also what additional
information is needed in what kinds of languages. Let's see.
And I am just looking at my notes for a second.
Ms. Garcia of Texas. If you could send that to the
committee in writing, I think that would be appropriate, and
also, what outreach you are doing with regard to seniors.
I know that I got initially, even after that first stimulus
check, a lot of calls from people in my district who were being
told that they had to go through consultants to get their
stimulus, and we all knew that was bull corn, but--
Chairwoman Beatty. Thank you so much.
Ms. Garcia of Texas. --kind of fraud-- so if I can have the
answer to both of those questions, I would appreciate it.
Ms. McCray. Yes, I would be happy to provide that.
Chairwoman Beatty. Thank you. The gentlelady's time is up.
Ms. Garcia of Texas. Yes, ma'am. Thank you.
Chairwoman Beatty. Thank you.
The Chair now recognizes the distinguished gentlelady from
New York, Congresswoman Maloney.
Mrs. Maloney. Chairwoman Beatty, thank you for allowing me
to participate, and for holding this very important hearing.
This is an issue that is deeply personal to me. Back in
2015, I asked the GAO to look at the gender makeup of corporate
boards, and despite the fact that women make up 47 percent of
the workforce, at that time, they held only 16 percent of the
board seats at the S&P 500. Today it is 21 percent; it is still
very, very low.
The most startling finding in this report was how long they
projected it would take to achieve gender parity on corporate
boards. And GAO found that even if we assume that equal
proportions of women and men started joining boards, starting
right now, it would take more than 40 years for there to be an
equal number of women and men on corporate boards.
And we are here today to make sure that all of you as
Directors of the Offices of Minority and Women Inclusion are
holding your mission to ensuring diversity and inclusion.
If we ever hope to see real change in private sector firms,
we must make sure that our financial regulators are taking this
seriously and doing everything possible to ensure they don't
find themselves digging out of the same hole.
The GAO report that was released today--and I want to ask
this of Ms. Levine from the Office of Minority and Women
Inclusion at the FHFA--the GAO report that was released today
showed that Fannie Mae and Freddie Mac have failed to increase
the number of women and minorities in their workforce. In 2018,
women employees represented 45 percent at Fannie, and 46
percent at Freddie, compared to 58 percent across firms in the
private sector.
And to make matters worse, the report showed that the share
of female employees at both Government-Sponsored Enterprises
(GSEs) declined from 2011 to 2018. So my question is, how are
you holding managers accountable for implementation of your
diversity and inclusion policies to promote the hiring of more
women and minorities in your workforce? For example, does your
agency utilize performance metrics pay incentives or other
metrics to increase accountability for your management teams?
Ms. Levine?
Ms. Levine. Thank you.
Our regulated entities, Fannie Mae and Freddie Mac, are
subject to the Housing and Economic Recovery Act, which means
they have an affirmative statutory obligation to promote
diversity and ensure inclusion. That also gives FHFA very
specific authority to examine those regulated entities for
diversity and inclusion.
And so in 2016, FHFA developed a diversity and inclusion
examination program, which we implemented in 2017, and we are
just about finishing up the 4th year of that examination.
In addition to that, we amended our minority and women
inclusion regulation to require that each regulated entity
develop a strategic plan for diversity and inclusion.
And we do examine them to ensure that they are, in fact,
reaching the goals and objectives that they have set forth in
their 3-year strategic plan, and that is on an annual basis.
Mrs. Maloney. Clearly, they haven't been effective, and
more work needs to be done. It is key for the GSEs to recruit
more women and minorities in those lower-level positions as
they are then better-positioned--just get them through the
door--to be promoted and considered for future senior
management positions, like board membership.
I want to know, do you reach out and get private entities
to try to find diverse people? Do you get people to reach out
and encourage people to apply? Do you take that proactive step
with hiring firms to help or reaching out strategically to make
sure you have more minorities and women in the workplace?
Ms. Levine. Are you speaking about FHFA itself, or are you
referring to our regulated entities? I am not quite sure.
Mrs. Maloney. I am talking about getting people to apply in
the first place. It is hard to hire women and minorities if
they are not applying for the job. So, do you have outreach to
make sure that more women and minorities are hired in the first
place, so that they are in the queue, so when an opening comes
up, they can be promoted?
Ms. Levine. Absolutely. Our diverse workforce is 43.9
percent. So, I am not quite sure what you are referring to in
terms of not being very diverse.
Mrs. Maloney. We would like to get it to 50 percent at
least, but anyway, moving along, as a result of that GAO
report, I introduced the Diversity in Corporate Leadership Act,
and my bill will require public companies to report the gender,
racial, and ethnic composition of their boards in their annual
proxy statements. And I would like to ask this to Ms. Gibbs
from the SEC--
Chairwoman Beatty. Your time is up. Can we get a short
answer?
Mrs. Maloney. I will submit it in writing, Madam
Chairwoman. Thank you for this very important hearing, and we
need to work together to get those numbers up.
Thank you.
Chairwoman Beatty. No, thank you very much.
Let me now say thank you to all of our witnesses for your
testimony.
The Chair notes that some Members may have additional
questions for today's panels, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to these witnesses and to place their responses in the record.
Also, without objection, Members will have 5 legislative days
to submit extraneous materials to the Chair for inclusion in
the record.
The hearing is now adjourned.
[Whereupon, at 3:16 p.m., the hearing was adjourned.]
A P P E N D I X
September 8, 2020
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