59–006 

110TH CONGRESS REPT. 110–278 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

FINANCIAL SERVICES DIVERSITY INITIATIVE 

JULY 30, 2007.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. FRANK of Massachusetts, from the Committee on Financial 

Services, submitted the following 

R E P O R T 

[To accompany H. Con Res. 140] 

The Committee on Financial Services, to whom was referred the 

concurrent resolution (H. Con. Res. 140) recognizing the low presence of minorities in the financial services industry and minorities 

and women in upper level positions of management, and expressing 

the sense of the Congress that active measures should be taken to 

increase the demographic diversity of the financial services industry, having considered the same, report favorably thereon with an 

amendment and recommend that the concurrent resolution be 

agreed to. 

CONTENTS 

Page 

Amendment .............................................................................................................. 2 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 3 

Hearings ................................................................................................................... 3 

Committee Consideration ........................................................................................ 4 

Committee Votes ...................................................................................................... 4 

Committee Oversight Findings ............................................................................... 4 

Performance Goals and Objectives ......................................................................... 5 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 5 

Committee Cost Estimate ....................................................................................... 5 

Congressional Budget Office Estimate ................................................................... 5 

Federal Mandates Statement ................................................................................. 5 

Advisory Committee Statement .............................................................................. 5 

Constitutional Authority Statement ...................................................................... 5 

Applicability to Legislative Branch ........................................................................ 5 

Earmark Identification ............................................................................................ 5 

Exchange of Committee Correspondence ............................................................... 6 

Section-by-Section Analysis of the Legislation ...................................................... 8 


hmoore on PRODPC68 with HMRPT
2 

AMENDMENT

The amendment is as follows: 

Amend the preamble to read as follows: 

Whereas the financial services industry is vitally important to the United States 

economy; 

Whereas in 2005, employment in the financial services industry was about 7 percent 

of total employment in the United States, with over 10,000,000 employees; 

Whereas since 1995, the average hourly earnings of non-supervisory workers in financial activities was above the private industry and increased from approximately $13 in 1997 to $18.80 in 2006; 

Whereas minorities and women face various challenges in obtaining and maintaining positions, especially upper-level positions, within the financial services industry; 

Whereas minorities and women often cite the lack of mentors and leadership training as barriers to their advancement; 

Whereas in 2005, about 14.9 percent of the board seats at the Fortune 100 companies were held by minorities, and women comprised about 16.9 percent of Fortune 100 company board seats in 2005; 

Whereas in the financial services industry, the percentage of black employees has 

slowly decreased from about 10.5 percent to 9.8 percent between 2000 to 2005; 

Whereas in 2005, blacks were approximately 9.8 percent of those employed in the 

financial services industry and about 7.4 percent of financial managers; 

Whereas from 2000 to 2005, Hispanics have been an increasing percentage of the 

United States workforce and the financial services industry; 

Whereas in 2005, Hispanics comprised about 9.7 percent of those employed in the 

financial services industry, just 6 percent of financial managers, and less than 

2 percent of the directors of Fortune 1,000 companies; 

Whereas in 2004, Asians represented about 5.5 percent of the employees in the financial services industry and about 6.3 percent of all financial managers; 

Whereas in 2004, the financial services industry ranked third in the percentage of 

women employed in the workforce behind healthcare and education; 

Whereas approximately half of financial managers are women and the percentage 

of women financial managers was approximately 51.7 in 2005; 

Whereas in a 2001 survey of 2,200 senior and pipeline level women and men representing approximately 60 securities firms, 65 percent of women reported that 

women have to work harder than men to get the same rewards, and 51 percent 

of women report that women are paid less than men for doing similar work; 

Whereas a minority of women (32 percent) and men (43 percent) believe that promotion decisions are made fairly in their firm; 

Whereas the House-approved Financial Services Regulatory Relief Act of 2005 directed each Federal banking agency to submit biennial reports to Congress on 

the status of the employment by the agency of women and minorities; 

Whereas the Government Accountability Office found in its report ‘‘Financial Services Industry: Overall Trends in Management-Level Diversity and Diversity Initiatives, 1993–2003’’, issued in June 2006, that overall diversity at the management level in the financial services industry did not change substantially from 

1993 to 2004; and 

Whereas, although the Government Accountability Office acknowledged that financial services firms have initiated programs to increase workforce diversity, the 

Office found that these initiatives face challenges: Now, therefore, be it 

PURPOSE AND SUMMARY

House Concurrent Resolution 140, the ‘‘Financial Services Diversity Initiative,’’ provides statistics on the low representation of 

women and minorities employed within the financial services industry, particularly in senior-level positions. The resolution also expresses the sense of Congress that active measures should be taken 

to increase the demographic diversity of the financial services industry and that a diverse workforce is important to be able to 

achieve a fair and just economy. 


hmoore on PRODPC68 with HMRPT
3 

BACKGROUND AND NEED FOR LEGISLATION

On July 15, 2004, the Oversight and Investigations (O&I) Subcommittee of the Financial Services Committee (Committee) held a 

hearing entitled, ‘‘Diversity in the Financial Services Industry and 

Access to Capital for Minority-Owned Businesses: Challenges and 

Opportunities,’’ on diversifying the senior corporate ranks of the financial services industry, and improving access to capital for 

women- and minority-owned businesses. During this hearing, Ana 

Marı ́a Fernandez Haar, who testified on behalf of the New America 

Alliance, recommended in response to a question from Representative David Scott (GA) that the Committee request a Government 

Accountability Office (GAO) report to review the extent of workforce diversity within the financial services industry. After the 

hearing, Committee Chairman Oxley, Ranking Member Frank, 

O&I Chair Kelly, O&I Ranking Member Gutierrez, and Representative Scott (GA) sent a joint letter to GAO requesting a report. 

GAO completed the report entitled, ‘‘FINANCIAL SERVICES INDUSTRY: Overall Trends in Management-Level Diversity and Diversity Initiatives, 1993–2004,’’ in June 2006. The O&I Subcommittee held a hearing entitled, ‘‘Diversity: The GAO Perspective,’’ to review this report on July 12, 2006. 

In the report, GAO concluded that overall diversity at the management level in the financial services industry did not change substantially from 1993 through 2004. GAO also found that workforce 

diversity varied among the different sectors of the financial services industry. Commercial banks and insurance companies, for example, were generally more diverse at the management level than 

securities firms. Diversity at the management level within the accounting industry was lower than in other sectors of the financial 

services industry. 

In completing the report, GAO relied on the Equal Employment 

Opportunity Commission (EEOC) Employer Information Report 

(EEO-1) data for financial services industry for employers with 100 

or more employees for the years 1993, 1998, 2000, and 2004. The 

EEO-1 data provide information on the racial, ethnic, and gender 

composition of various job categories within a broad range of industries, including financial services. While EEO-1 data are important, 

because of the broad scope of the job categories, GAO noted that 

EEO-1 data may be slightly misleading as an accurate measurement of the representation of women and minorities in senior management and board positions within the financial services industry. 

GAO stated that ‘‘existing EEO-1 data may actually overstate representation levels for minorities and white women in the most senior-level positions because the ‘officials and managers’ category includes lower- and mid-level management positions that may have 

higher representations of minorities and white women.’’ (GAO Report, page 9). The ‘‘officials and managers’’ category could, for example, cover a wide range of job positions within the industry, capturing both a chief executive officer of a large commercial bank and 

an assistant branch manager at a small bank branch. 

HEARINGS

In the 109th Congress, the O&I Subcommittee held a hearing on 

July 12, 2006, entitled, ‘‘Diversity: The GAO Perspective,’’ to review 


hmoore on PRODPC68 with HMRPT
4 

a report issued by GAO in June 2006 entitled, ‘‘FINANCIAL SERVICES INDUSTRY: Overall Trends in Management-Level Diversity 

and Diversity Initiatives, 1993–2004.’’ The following witnesses testified at the hearing: Ms. Orice Williams, Director of the Financial 

Markets and Community Investment of the U.S. Government Accountability Office; Mr. Marc Lackritz, President of the Securities 

Industry Association; Ms. Donna Sims Wilson, Member of the 

Board of Directors and Chair of the National Legislative Committee of the National Association of Securities Professionals; Mr. 

Carlos Loumiet, Co-Chair of the Capital Advocacy Committee of 

the New America Alliance; and Mr. Manuel ‘‘Manny’’ Fernandez, 

National Managing Partner-Campus Recruiting of KPMG, LLP. 

In the 108th Congress, the O&I Subcommittee also held a hearing on July 15, 2004, entitled, ‘‘Diversity in the Financial Services 

Industry and Access to Capital for Minority-Owned Businesses: 

Challenges and Opportunities.’’ This hearing focused on two topics: 

diversifying the senior corporate ranks of the financial services industry and improving access to capital for women- and minorityowned businesses. The following witnesses testified at the hearing: 

Ms. Ana Mar ́ıa Fernandez Haar, Chair of the Board of New America Alliance; Dr. Theresa Hammond, Associate Professor of Accounting at Boston College; Mr. Michael Kennedy, Manager of Diversity Program and Financial Services Sector Executive with 

Korn/Ferry International; Mr. Marc Lackritz, President of Securities Industry Association; Ms. Joanne Hanley, President of Women 

in Housing and Finance, Inc.; and The Honorable Lorenzo Padro ́n, 

State of Illinois Commissioner of the Office of Banks and Real Estate. The National Gay & Lesbian Chamber of Commerce submitted a written statement for the record. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

June 26, 2007, and ordered reported House Concurrent Resolution 

140, the Financial Services Diversity Initiative, as amended, with 

a favorable recommendation by a voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. No record votes were 

taken with in conjunction with the consideration of this legislation. 

A motion by Mr. Frank to report the concurrent resolution, as 

amended, to the House with a favorable recommendation was 

agreed to by a voice vote. 

During the consideration of the concurrent resolution, the following amendment was considered: 

An amendment by Mr. Meeks, No. 1, a substitute for the preamble, was agreed to, as modified, by a voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in this report. 


hmoore on PRODPC68 with HMRPT
5 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee advises the concurrent resolution does not authorize funding, so a statement of general performance goals and objectives is not required. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that this concurrent 

resolution expresses the sense of the Congress and therefore does 

not have the force of law. As such, it would not result in new budget authority, entitlement authority, or tax expenditures or revenues. 

COMMITTEE COST ESTIMATE

The Committee finds that this concurrent resolution expresses 

the sense of the Congress and therefore does not have the force of 

law. As such, there is no cost associated with this legislation for 

the current fiscal year or for any fiscal year thereafter. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Being a concurrent resolution and without the force of law, the 

cost estimate provided by the Congressional Budget Office pursuant to section 402 of the Congressional Budget Act of 1974 is not 

required. 

FEDERAL MANDATES STATEMENT

The concurrent resolution contains no Federal mandates. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Consistent with clause 3(d)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that the Constitutional Authority of Congress to adopt this legislation is provided by 

Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

EARMARK IDENTIFICATION

House Concurrent Resolution 140 does not contain any congressional earmarks, limited tax benefits, or limited tariff benefits as 

defined in clause 9 of rule XXI. 


hmoore on PRODPC68 with HMRPT
6 


hmoore on PRODPC68 with HMRPTInsert offset folio 10 here HR278.001
7 


hmoore on PRODPC68 with HMRPTInsert offset folio 11 here HR278.002
8 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Preamble 

The resolution notes the importance of the financial services industry, which comprised about 7 percent of the total employment 

in the United States in 2005, to the American economy. The resolution also notes that women and minorities face various challenges 

in obtaining and maintaining positions within the financial services 

industry, particularly in upper-level positions. The resolution provides data on workforce diversity among different sectors of the industry, including findings from a June 2006 GAO report entitled, 

‘‘FINANCIAL SERVICES INDUSTRY: Overall Trends in Management-Level Diversity and Diversity Initiatives, 1993–2004,’’ using 

EEO–1 data that overall diversity within the financial services industry did not change substantially from 1993 to 2004. 

Section 1. Short title 

This section establishes the short title of the resolution as the 

‘‘Financial Services Diversity Initiative.’’

Section 2. Financial services diversity initiative 

This section recognizes that women and minorities still face 

unique challenges entering into and obtaining upper level positions 

within the financial services industry and expresses a sense of Congress about the importance of workforce diversity. The resolution 

encourages financial institutions to engage in a number of activities to try to promote workforce diversity, including partnering 

with organizations that focus on developing opportunities for minorities and women to place talented youth in internships, summer 

jobs, and full-time positions within the industry and partnering 

with inner-city high schools and girls’ high schools to establish financial literacy programs and provide mentoring. The resolution 

also encourages financial institutions and federal and state financial institution regulatory agencies to attract and retain a diverse 

workforce by providing financial support for women and minorities 

undergraduate and graduate business programs; recruiting at 

women’s colleges, historically Black colleges and universities, and 

Hispanic serving institutions; sponsoring and recruiting at job fairs 

in urban communities; and placing employment ads in media outlets oriented to people of color. The resolution also encourages financial institutions and public and private pension funds to seek 

qualified women- and minority-owned firms as investment managers, underwriters, and other business relationships and to appoint more women and minorities as Board members. 

This section also expresses the sense of Congress that active 

measures should be taken by employers and educational institutions to increase the demographic diversity of the financial services 

industry. In addition, the section expresses the sense of Congress 

that diversity within the financial services industry is vitally important to promoting innovation and creativity in the industry and 

to developing a more inclusive workforce to achieve a fair and just 

economy. 

Æ 


hmoore on PRODPC68 with HMRPT