Grygo is the chief content officer for FTF & FTF News.
Linda A. Lacewell, superintendent of financial services for the New York State Department of Financial Services (NYSDFS), is acting to “promote diversity, equity and inclusion” by making financial services firms provide data about the diversity of their corporate boards and managers.
NYSDFS officials say the data “will be collected in the fall of 2021 and published on an aggregate basis in the first quarter of 2022,” according to an official statement from the regulator. This step was “based on its research and outreach to the banking and financial services industry and trade groups.”
The goal is to counter “the limited availability of banking and non-depository financial institution-specific diversity data,” according to the NYSDFS. By sharing the data, firms can “assess where they stand compared to their peers and raise the bar for the entire industry.”
For its first step, NYSDFS officials “will collect data from all New York-regulated banking institutions with more than $100 million in assets, and all regulated non-depository financial institutions with more than $100 million in gross revenue,” according to the statement.
Crypto-currency firms are not off the hook, by the way.
Firms that are “authorized to engage in virtual currency business activity, including virtual currency licensees (BitLicensees) and virtual currency trust companies,” will have to provide data about the “gender, racial and ethnic composition of their boards or equivalent body and senior management as of December 31, 2019, and 2020, including information about board tenure and key board and senior management roles,” say NYDFS officials.
Linda A. Lacewell
The reasoning behind the diversity data collection is that the industry has “a long way to go to increase diversity. Statistics show that minority employees are underrepresented in the finance/insurance industry in general and are overrepresented in lower employment levels when compared to their white peers,” according to the NYSDFS. “Females make up less than one-third of executive and senior-level workforce, and the numbers of minorities on boards are consistently lower than their representative share of the population.”
The regulator also cites the U.S. House Committee on Financial Services and its analysis of bank diversity data in 2019. The committee reports that “among banks reporting demographic information, females made up less than one-third of their executive and senior-level workforce. The report also found that bank boards were 11 percent Black, 5 percent Latino, and 3 percent Asian; in contrast, these groups comprise 13 percent, 18.5 percent, and 6 percent of the U.S. population,” NYSDFS officials say.
In addition to the new data requirement, NYSDFS officials have been reaching out to regulated banks and non-depository financial instructions “to assess where they stand, where they want to go and how they will get there, taking into consideration their size and other relevant factors, with a focus on improvement over time,” officials say. “In response to feedback from industry participants, DFS will organize a webinar focused on diversity, equity and inclusion best practices and addressing specific issues that the industry has encountered in its diversity efforts.”
The regulator offers more details via a long letter found here: https://on.ny.gov/3jqZSYX
Need a Reprint?