January 22nd, 2014
NAACP Releases New Report On Banking Industry
BALTIMORE, MD - Recently, the NAACP released findings from its Opportunities & Diversity Report Card: Consumer Banking Industry. Details in the report highlight key areas where the banking industry can improve to ensure their workforce, leadership and suppliers adequately reflect the demographics of the United States.
“Equal opportunity for people of color in the United States remains an unrealized goal,” stated Interim NAACP 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.”
The report card, which is based on 2011 data, reveals top management positions remain firmly dominated by white employees, despite the development of programs to increase diversity and inclusion and dramatic increases in the number of minority college graduates entering the workforce over the past 20 years. Information submitted by banks during the survey period indicates that they continue to struggle with diversification in their supplier purchasing. 1.6 percent of banks’ supplier budget is the most any bank spent on African American suppliers and 5.3 percent is the most any bank spent on firms owned by people of color.
“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,” stated Dedrick Asante - Muhammad, NAACP Senior Director of Economic Department.
Information submitted by banks during the survey period also indicates many banks continue to create products which feature high cost credit or fee-based services. These high-cost products hurt the grades of several banks in this report.
“This thorough and accurate report could apply to many other industries as it illustrates the nation’s slowly evolving progress on race,” states Gary Bledsoe, NAACP Board Member and Chair of Housing Committee. “However, we are pleased to acknowledge that 4 of the 5 institutions have adopted the NAACP’s Fair Lending Principles and have committed to work with us to ensure further progress.”
The NAACP’s Report Card graded the five largest banks (Bank of America, Citibank, JP Morgan Chase, Wells Fargo, and US Bank) on three main criteria: 1) workforce and job advancement, 2) contracting and procurement, and 3) small dollar products.
Bank of America and Citibank both received an overall C+ grade—the highest ratings out of all the banks.
The release of this report card comes months before a new federal rule requires banks to set “metrics” and “percentages” for diversifying their workforces and supplier pools. The federal rule will also advise banks on how to collect data detailing how much they spend on minority- and women-owned businesses.
“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, NAACP Board Member and Economic Development Chair. “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.”
The five banks surveyed and other leading banks will be invited to participate in an Opportunity & Diversity Summit in the next few months to discuss industry strategies for diversity and inclusion moving forward.
The Opportunity & 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 focus of the Opportunity and Diversity Report Card is to examine and grade the largest companies on their representation of African Americans and people of color as a whole with respect to workforce, supplier diversity and wealth building. In addition to grading corporations on their diversity, the report cards highlight opportunities in the industry and the specific programs designed to strengthen people of color’s full participation in the industry.