WASHINGTON — While the Federal Home Loan Banks have taken steps to improve diversity among boards of directors, members are still largely male and nonminorities, according to a Government Accountability Office report released Wednesday.
The report — which was requested by House Financial Services Chair Maxine Waters, D-Calif., Rep. Carolyn Maloney, D-N.Y., and Rep. Joyce Beatty, D-Ohio, in 2018 — found that just 15% of directors on the banks' boards were of a racial or ethnic majority, an increase from 11% in 2015.
Additionally, 23% of directors were women as of 2018, a slight increase from 18% in 2015. However, in 2018 there were no board chairs who identified as female or as a minority, and just two female vice chairs and one minority vice chair.
The Home Loan banks have struggled with balancing the addition of new women or minority directors with the institutional knowledge that existing directors provide, and have had difficulty in competing with other companies for female and minority candidates, the government-sponsored banking cooperatives told the Government Accountability Office.
“Despite reported challenges, FHLBanks have taken measures to promote board diversity, such as establishing a task force to promote board diversity through information sharing and training,” the GAO report said. “Individually, the FHLBanks emphasized the importance of diversity in election materials, built pools of diverse candidates, and conducted outreach to industry and trade groups.”
In a statement, Waters called out several of the Home Loan banks for declining to add an additional director to their boards, which the Federal Housing Finance Agency allowed them to do more than two years ago in an effort to expand diversity.
“It is particularly concerning that zero FHLB boards have diverse chairs and that only two banks have women as vice chairs and only one bank has a racially or ethnically diverse vice chair,” Waters said. “As the chair and vice chair positions are especially powerful, the lack of diversity in these positions is especially troubling. The FHLBs can and must do better.”
Maloney echoed Waters, commending the Home Loan banks for steps taken to address the lack of diversity, but also saying that “more work remains to be done.”
“The GAO report shows that the collection of clear, consistent data on the demographics of the FHLB boards remains a significant obstacle to improving board diversity, and I look forward to working with my colleagues and the Federal Housing Finance Agency to clarify and streamline the disclosure of demographic information for boards of directors,” she said.
