Federal Agencies Act to Advance Diversity and Inclusion

On January 21, 2022, Federal Deposit Insurance Corporation (“FDIC”) Chairman Jelena McWilliams issued remarks on diversity and inclusion at the FDIC and National Bankers Association Event. In her speech, McWilliams told the story of her immigration to the United States and the difficulties she faced at that time with less sophisticated technology and limited access to the financial industry.

Despite her first experiences with the United States financial sector, McWilliams notes “financial innovation has increased access to products and services, lowered their cost, and expanded the pool of creditworthy consumers.”

Additionally, McWilliams discussed the embrace of the regulatory responsibilities of the FDIC to promote and preserve the nation’s minority-depository institutions (MDIs), which she described as “the financial lifeblood of the communities they serve, enabling individuals and minority-owned small businesses to securely build savings and obtain credit.”

Although McWilliams provided a list of efforts made by the FDIC to bolster MDIs across the United States—including the creation of the Mission Driven Bank Fund to “drive capital investment and funding to these institutions”—she reminded her successors to ensure they do not assume “what is best” for these institutions and to instead continue her efforts to engage with them and let them tell you their needs.

She also reminded financial institutions of their role in ensuring that diversity and inclusion are promoted by their organizations. Notably, McWilliams encouraged organizations to conduct a self-assessment of their institution and share the results with the FDIC’s Office of Minority and Women Inclusion.

A recent Consumer Financial Protection Bureau (“CFPB”) Report on Diversity and Inclusion within Financial Services reported that “44% of the sample (119 entities) had no public information about diversity and inclusion efforts on their website or in annual reports.” According to the CFPB report, there is a deficiency of diversity and inclusion amongst smaller financial institutions, which also reportedly have “little to no information about diversity and inclusion.” 

 Although none of the issues discussed in McWilliam’s speech addressed specific forthcoming regulatory efforts, financial institutions should consider the evolving legislative scheme and should review their institution to ensure that they are acting in accordance with these recommendations.