Source: United States Senator for New Jersey Bob Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking Committee, in yesterday’s hearing “Fairness in Financial Services: Racism and Discrimination in Banking,” questioned witnesses on the underrepresentation of minority voices amongst financial regulators and also pressed them on the importance of protecting unbanked and underbanked communities that disproportionately rely on cash from being shut out of the financial system.
“Right now, there is a staggering lack of diversity in leadership positions at the institutions that set and enforce the rules of the financial system. As a result, Black and Latino communities lack representation at the table when these critical decisions are made,” said Sen. Menendez. “…Well, I can tell you from my own experience of 30 years in Congress between the House and the Senate, if I and others like me were not here [then] issues that are critically important to our communities would just not be either brought up or pressed…that doesn’t mean that others aren’t well intentioned, but they’re not doing it. They’re not putting political capital on the table to make it happen. One of my concerns has been the Federal Reserve. It has a well-documented diversity problem and in its 108-year history, the Federal Reserve has never had, for example, a Hispanic Regional Bank President and that is an institution that is making some of the most important decisions for our economy.”
Sen. Menendez has been a champion in the fight to address diversity problems amongst financial regulators and, in particular, the Federal Reserve. He has written multiple letters to the Fed on this subject, including recently when it was in the process of appointing a new president for the Boston and Dallas Federal Reserve Bank, and has asked about it at multiple committee hearings with Federal Reserve Chair Jerome Powell and Fed Vice Chair for Supervision Michael Barr during his nomination hearing. In addition, the Senator has suggested reforms to improve the transparency of the Federal Reserve Bank President and director selection processes.
[CLICK TO WATCH THE SENATOR’S FULL LINE OF QUESTIONING]
Sen. Menendez further asked witnesses about reports earlier this year that Wells Fargo conducted “Fake Interviews” with women and minority candidates for positions that have already been filled to artificially boost diversity statistics in an attempt to satisfy an internal goal to interview at least one woman and one person of color for each open position.
“[The] information uncovered by the New York Times is not only highly offensive, it’s suggestive of systemic bias and discrimination at the bank, but raises questions about whether this behavior is part of a broader pattern related to compliance with nondiscrimination laws,” said Sen. Menendez. “…[The practice of interviewing candidates, particularly women and minority candidates, for previously filled positions is deeply insulting to these applicants, and to the larger communities who the bank serves. The bank has yet to take any disciplinary actions against the hiring managers involved, and I believe Wells Fargo has a long way to go to restoring public confidence.]”
Janai Nelson, President and Director-Counsel of NAACP Legal Defense and Educational Fund echoed the Senator’s remarks, saying that Wells Fargo’s practices “speaks to the notion that there is already an idea as to who is worthy of working at a bank, who is pre-selected as a preferential candidate in that work place, and that candidates of color have already been ruled out of the equation.”
Sen. Menendez also asked witnesses about a 2021 study by the FDIC that found nearly 6 million households in the United States are unbanked, without access to checking accounts, debit cards, or credit cards while an additional 14.1 percent are underbanked, which means they rely on money orders and other alternative financial services to complete transactions. Sens. Menendez and Kevin Cramer (R-N.D.) reintroduced their Payment Choice Act in June, which would require retail businesses to accept cash as a form of payment and ensure that unbanked and underbanked consumers are always able to access retail services.
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