Board Disparities
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THURSDAY3pt stroke AUGUST, 100% 19size, 2021for top VOL. of newspaper 186 No. 159= 8.9931 inches AMERICANBANKER.COM Follow us on Twitter @AmerBanker JPMorgan Chase warns 5 customers of possible data exposure Board disparities The incident, which may have exposed A survey of 44 large banks found that Blacks, Latinos and customers’ account information to other 2.5pt stroke = 6.75 inches customers, was caused by a technical glitch, Asians were less represented on the banks' boards than the company wrote in a notice posted on a in their workforces state attorney general’s website. Page 7 See story on page 2 Personal finance fintech Albert Boards Workforces 6 rolls out checking account The Los Angeles company is bundling a wide 2pt stroke = 5.75 inches range of services like Digit, Dave, Chime, 90% Wealthfront and Moneylion to compete with 80% 80% traditional banks on more fronts. Page 7 70% 60% 58% 50% Mexican fintech expanding into U.S. to 40% 1.5pt stroke = 4.6667 inches 7 30% finance cross-border trade 20% Credijusto, the first fintech in Mexico to 10% 11% 12% 11% 12% buy a bank, plans to cater to a market that 5% 7.5% 0% 3% 1% traditional banks often overlook: smaller 1pt strokeWhiteB = 3 inches lackLaǎno Asian Other businesses engaged in commerce between the two countries. Page 8 Source: Democratic staff report, House Financial Services Committee, February 2020 Fintechs found 8 to be much likelier to OK suspicious PPP loans Fintechs were almost five times more likely dailybriefing Will CFPB take cues than traditional lenders to be involved with 3 from Canada in writing suspicious loans issued through the U.S. data-sharing rules? government’s Paycheck Protection Program, Nasdaq rule adds to pressure The U.S. and its neighbor to the north according to a new study. Page 9 1 on banks to diversify boards are each developing frameworks to give The new standards give some 300 listed consumers control over financial data MUFG taps veteran banker to banks up to five years to meet targets for and allow companies to transfer account 9 lead risk in the Americas including women and minorities on their information. A recently issued Canadian Brian Gunn, who will join the Tokyo-based boards, or explain why they aren’t doing government report could influence efforts in bank on next month, previously served as so. State officials and investors had already both countries, analysts say. Page 4 chief risk officer at Santander Holdings pushed banks about the need to rethink their USA, Ally Financial and a GE Capital approaches to recruiting directors. NCR, Diebold Nixdorf join subsidiary. Page 10 (See chart above.) Page 2 4 the crypto bandwagon Most people aren’t spending bitcoin in Big credit unions extend Wells Fargo merges two stores, but major point-of-sale terminal 10 help to small peers — but 2 payments groups, hires makers are developing technology and there are trust issues BNY Mellon exec as leader business relationships on the belief that Many credit unions with less than $100 Paul Camp will join the company in demand will build fast. Page 5 million of assets struggle with marketing November to run its new Global Treasury and technology. Larger ones are willing to Management division. Wells Fargo says the lend support, and the Credit Union National goal in combining its treasury management Association is working to dispel fears that and global payments units is to improve prospective mentors are simply looking for service for clients doing business in multiple takeover targets. Page 10 countries. Page 4 THURSDAY AUGUST 19, 2021 AMERICANBANKER.COM PAGE 2 Two of the nation’s largest states have provision of the Nasdaq rule that requires DIVERSITY AND EQUALITY made related moves in recent years. companies to provide an explanation if they In 2020, California passed a law that do not have at least two diverse members. requires public companies headquartered Sen. Pat Toomey of Pennsylvania, the Nasdaq there to have two or three directors from top Republican on the Senate Banking underrepresented groups by the end of Committee, also slammed the SEC for rule adds 2022. approving the rule, saying in a press And last month, the New York State release this month that SEC Chairman Gary Department of Financial Services asked the Gensler is “turning a financial regulator to pressure companies it supervises to disclose data on into a laboratory for progressive social board diversity, which the agency intends engineering.” on banks to publish on an aggregate basis. Gensler said in a statement that the Critics of the Nasdaq rule argue that it rule will give investors the “consistent imposes illegal quotas and poses an undue and comparable data” they have sought, to diversify challenge for certain companies. They also while also giving companies the “flexibility point to industry-led efforts that are already to make decisions that best serve their boards under way. shareholders.” In recent years, certain banks have Nasdaq said in a statement that it is By Polo Rocha and Laura Alix diversified the membership of their boards pleased the SEC approved the “market-led August 16, 2021 and assigned executives responsibility solution” and looks forward to working with A new diversity rule for companies listed for diversity efforts. Some companies companies on implementation. Nasdaq on the Nasdaq stock exchange represents are experimenting with tying executive is hosting several webinars for companies the latest push to convince banks to add bonuses to diversity, equity and inclusion and partnering with three firms that will more women and minorities to their boards goals. offer free board recruiting services. of directors. If it makes sense for a company to Data on corporate boards’ diversity is While the standards are facing some diversify its board, then a government sparse, an issue that the Nasdaq rule aims pushback, their recent approval by the mandate should not be necessary, said Paul to address by requiring annual disclosures. Securities and Exchange Commission puts Kamenar, general counsel of the National The aggregate data that does exist pressure on Nasdaq-listed banks to rethink Legal and Policy Center, a right-leaning suggests that bank directors are long-standing approaches to recruiting nonprofit organization that monitors predominantly white men. On average, board members, if they have not already public officials. about 70% of directors at some of the done so amid insistence from investors and The group, which filed a comment letter country’s largest banks are men, while 80% state officials. opposing Nasdaq’s board diversity rule, of directors are white, according to a report Advocates for greater board diversity is now considering legal action. It argues last year from the Democratic staff of the argue that directors exercise influence over that the rule violates the Constitution House Financial Services Committee. The a bank’s culture and strategic direction, and by imposing arbitrary racial and gender findings were based on a survey of 44 large say that diverse leadership is often linked to quotas. and regional banks. better performance or higher credit ratings. Kamenar criticized as “disingenuous” the Those banks’ boards did not reflect the One analysis also suggested that companies with diverse boards outperformed their peers during the pandemic. Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 “Leadership and senior management Phone 212-803-8200 AmericanBanker.com should reflect the communities that they 3pt stroke, 100% size for top of newspaper = 8.9931 inches serve in order to create more inclusive Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 decision making and to ensure equitable 2.5pt stroke = 6.75 inches access,” said Rawan Elhalaby, senior Managing Editor Dean Anason 770.621.9935 Reporters/Producers economic equity program manager at the 2pt stroke = 5.75 inches Greenlining Institute. Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 The Nasdaq rule requires companies Miriam Cross 571.403.3834 1.5ptWashington stroke = 4.6667 inches Bureau Chief Joe Adler 571.403.3832 traded on the exchange, a group that Jim Dobbs 605.310.7780 includes more than 300 banks, to disclose 1ptExecutive stroke = 3 inches Editor, Technology the diversity of their boards of directors Penny Crosman 212.803.8673 John Heltman 571.403.3847, Allissa Kline 716.243.2679 each year. And by giving firms the option Hannah Lang 571.403.3855 either to appoint at least two diverse Community Banking Editor Paul Davis 336.852.9496 John Reosti 571.403.3864, Gary Siegel 212.803.1560 directors or explain why they are not Contributing Editor Daniel Wolfe 212.803.8397 meeting that threshold, the rule is intended Kevin Wack 626.486.2341 to gradually make boards more diverse. For up to date and complete coverage go to AmericanBanker.com THURSDAY AUGUST 19, 2021 AMERICANBANKER.COM PAGE 3 full diversity of their employee bases, with that have pressured banks to diversify their or able to accept the time commitment that Latino workers making up 11% of the banks’ boards. comes with a board seat. workforces but only 5% of their board The bank directors’ trade group is “To satisfy the gender diversity members, and Asian employees making up updating its advice for members, given requirement, IBC would likely have to 12% of their workforces but 3% of directors. that its past guidance “not to discriminate recruit an independent director from Data on the sexual orientation or gender based on race, gender, etc., but to choose outside its headquartered community identity of corporate directors are even directors solely based on merit” may no which would place an undue burden of rarer.