NAACP: Diversity at Financial Institutions Remains Elusive

Diversity and inclusion remain elusive goals within the consumer banking industry, which presents great potential for job creation and wealth building within communities of color, a new NAACP report concluded.

Released Jan. 14, the “Opportunity and Diversity Report Card: The Consumer Banking Industry” is the second in a series of NAACP’s economic report cards on corporate diversity and inclusion. The assessment was necessary given the potential of the industry to be a source of well-paying jobs in the near future, and its ability to play an active role in “bridging our nation’s gap in racial economic equality and in closing the employment divide that still exists for people of color,” the report stated.

“During this period of high unemployment and declining wealth, which is even more pronounced for African Americans and other people of color, Americans need living wage jobs with long-term career tracks,” said Dedrick Asante-Muhammad, senior director of the NAACP’s Economic Department, in a statement.

The study used 2011 data submitted by the nation’s five largest banks to assess their record on increasing racial and ethnic diversity in their workforces, management and suppliers. It also analyzed the institutions’ policies and practices that impact Black and Brown communities including microloans and bank branch locations.

According to the survey, semi-skilled work, dominated by tellers, is the only sector where minorities were equitably represented, and even there opportunities are shrinking due to a shift toward a more automated banking experience.

Top management positions remain dominated by Whites (64 percent White males in 2008), despite diversity-boosting programs and an increasing number of qualified minorities entering the workforce. Only about 3 percent Blacks and about 2 percent Hispanics are employed at this level, the survey showed.

The banks’ record on diversifying their supplier chain was equally dismal. A mere 1.6 percent of the institutions’ supplier budget was spent on African-American suppliers, for example, and 5.3 percent on firms owned by people of color.

NAACP officials said they plan to invite the participating banks and others to a summit to discuss ways to increase their levels of inclusion.

“Equal opportunity for people of color in the United States remains an unrealized goal,” stated NAACP interim President and CEO Lorraine Miller. “The banking industry will add nearly 1 million jobs with a living wage and wealth generating opportunities over the next decade and more people of color are graduating with degrees in accounting, finance, IT, MBAs than ever before.

“We look forward to working with leading banks in strengthening their diversity and inclusion efforts and connecting more members of our communities to these opportunities,” she added.

Overall, Bank of America and Citibank got a “C+” rating; JPMorgan Chase and Wells Fargo got “Cs;” and US Bank received a “D” grade.

Several of the banks continued to peddle products which feature high cost credit or fee-based services, which hurt their grades.

The NAACP report card comes months before a new federal law is established under the Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010, which would require banks and other financial institutions to develop metrics to assess diversity in their workforces and supplier pools.

“Both this report card and the federal rule are major steps in encouraging the banking industry to strengthen job creation and wealth building opportunities for minorities,” stated Leonard James, economic development chair of the NAACP.

“The NAACP views the Opportunity & Diversity Report Card as a vehicle to provide baseline data in each industry surveyed and looks forwards to collaborating with these corporate leaders and diversity advocates over the next several years to advance industry diversity and inclusion, at all levels.”

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NAACP: Diversity at Financial Institutions Remains Elusive


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