The House on Wednesday passed a package of bills aimed at promoting racial and economic justice throughout the financial services sector, including a bill requiring regulated financial firms with more than 100 employees to disclose diversity data.
The Financial Services Racial Equity, Inclusion and Economic Justice Act was approved in a 215-207 vote largely along party lines with all Republicans and three Democrats voting no.
Among the bills included in the package was the Diversity and Inclusion Data Accountability and Transparency Act, which was introduced in March 2021 by Rep. Joyce Beatty, D-Ohio, chairwoman of the House Financial Services Subcommittee on Diversity and Inclusion.
Ms. Beatty's bill amends section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which requires financial regulators to create diversity standards for their regulated entities, including the collection of diversity data. In introducing the bill last year, Ms. Beatty noted that a majority of entities have declined to participate in annual diversity self-assessment requests.
In response to Dodd-Frank, the Securities and Exchange Commission in 2018 and 2020 asked its regulated entities, including money managers, to voluntarily disclose their diversity policies, practices and workforce data. And although more firms responded to the "diversity assessment report" in 2020 in the wake of George Floyd's murder, the SEC still only garnered a 13.5% response rate from the roughly 1,300 regulated entities that received the survey, up from 5% in 2018, according to SEC data. Ms. Beatty's bill would require companies to provide that data.
Regulated entities include those reporting as investment advisers, broker-dealers and private fund advisers to the SEC, as well as self-regulatory organizations, such as the Financial Industry Regulatory Authority.
The Financial Services Racial Equity, Inclusion and Economic Justice Act includes 13 previously introduced bills. Of note, it also directs the Federal Reserve to conduct monetary policy "in a manner that fosters the elimination of disparities across racial and ethnic groups."
With no Republican support, the package faces an uphill climb in the Senate.
