In-Depth: Diversity and Inclusion Subcommittee Chair Rep. Joyce Beatty (D-OH) reintroduced this bill from the 115th Congress to require the Fed to interview diverse candidates when president positions open up at the Reserve:
“It is hard to believe that in 2018, in the Federal Reserve’s 105-year history, only one African-American has ever served as a Reserve Bank president and seven women have held the position. To build a stronger economy, we need the talents, skills and expertise that diversity offers—and the Ensuring Diverse Leadership Act will do just that. I am proud to lead the charge in the House on this all-too important bill and am honored to have Senator Harris spearhead the companion piece of legislation in the U.S. Senate.”
Sen. Kamala Harris (D-CA), sponsor of this bill’s Senate companion and a candidate for the 2020 Democratic presidential nomination, says:
“Bringing greater diversity to the Federal Reserve will ensure that more perspectives are heard as major decisions are being made about our nation’s economic future and will produce better outcomes for the American people. We must do more to ensure that this country’s leadership reflects the people they serve—not just at the Federal Reserve, but across all levels of government.”
This legislation passed the House Financial Services Committee by a 56-2 vote with the support of 38 bipartisan House cosponsors, including 36 Democrats and two Republicans. Its Senate companion, sponsored by Sen. Kamala Harris (D-CA), has four Democratic Senate cosponsors and hasn’t received a committee vote.
Last Congress, this bill had 13 Democratic House cosponsors. Its Senate companion, sponsored by Sen. Harris, had four Democratic Senate cosponsors. Neither bill received a committee vote last Congress.
Of Note: Since its establishment in 1913, the Federal Reserve has had more than 130 different Regional Bank presidents. Of those presidents, Atlanta Federal Reserve President Raphael Bostic is the first and only African-American to serve in that capacity. Moreover, eight of the twelve Federal Reserve Banks have never had a woman president, and the first woman to served as a Regional Bank President wasn’t selected until 1982.
This legislation is modeled after the National Football League’s (NFL) “Rooney Rule,” which was instituted in 2003 to increase diversity among top positions in the League. Under the Rooney Rule, at least one minority must be considered for any head coach or general manager vacancy. In the 12 years before the Rule went into effect, the NFL had only six non-white head coaches; under the Rule, the League has since had 18 total head coaches of color.
In January 2019, former Fed economist Nellie Liang withdrew her nomination for a seat on the Fed’s Board of Governors. She would have been the first Asian-American to serve on the Fed’s board, and only the 10th woman.
Former Chairwoman Janet Yellen and current Chairman Jerome Powell have made great progress in diversifying the Federal Reserve, but Rep. Beatty argues that more needs to be done. In the House Financial Services Committee markup of this legislation, Rep. Ann Wagner (R-MO) spoke in favor of this legislation and said that an equal playing field is an “imperative component” in building a successful workforce and attracting talent.
Summary by Lorelei Yang(Photo Credit: iStockphoto.com / YinYang)