NY Department of Financial Services announces initiative to collect and publish diversity data

Ballard Spahr LLP
Contact

Ballard Spahr LLP

To further its ongoing diversity, equity, and inclusion (DEI) efforts, the New York State Department of Financial Services (DFS) announced an initiative to collect and publish diversity data on the demographic makeup of NY-regulated financial institution’s boards and senior management teams.  In its July 29th business industry letter, DFS emphasized that transparency around this data will help measure progress toward DEI goals, allow firms to assess where they stand relative to their peers, and increase transparency and accountability.

Relying on its authority under New York Banking Law §37(3) to require banking organizations to make special reports, DFS will collect data on the gender, racial, and ethnic composition of boards of all New York-regulated (i) banking institutions with over $100 million in assets, (ii) non-depository financial institutions with over $100 million in assets, (iii) and entities authorized to engage in virtual currency business activity.  DFS will collect demographic data from 2019 and 2020 starting in late summer 2021, and will publish aggregate data in the first quarter of 2022.

In the industry letter, DFS made plain that it expects financial institutions to make DEI at the leadership level strategic business and corporate governance priorities, emphasizing the importance of developing a pipeline of diverse leaders.  DFS underscored data reflecting existing gaps in gender and racial diversity across industry leadership, based in part on the U.S. House Financial Services Committee’s 2019 analysis of bank diversity data.

DFS laid out both business and social rationales for its data reporting initiative. From a business standpoint, DFS highlighted increasing industry-wide investor and government actions to advance diversity in senior management because doing so improves profitability, enhances risk management, and increases employee satisfaction.  DFS further asserted that with the challenges posed by the COVID-19 pandemic, racial injustice, and climate change, it is now “paramount that the banking and financial industries have strong boards and executive teams comprised of people with diverse experiences, skills and perspectives in order to better confront evolving risks and find new opportunities.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.